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Emerging companies - Mid caps that can become large cap
 The Equity Desk Forum :Investment Ideas - Creating winning portfolios! :Emerging companies - Mid caps that can become large cap
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basant
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Quote basant Replybullet Posted: 17/Aug/2006 at 9:47am
Thanks. I would put Peter Lynch above all the others. his style is very simple no discounted cash flows, no risk analysis. I mean the triggers that you can get by simply following Lynch's style is  amazing. Once you have identified a business it becomes a lot easier for you to analyse the financials.
 
I must have read One up on Wall Street over 15 times. I have underlined the important lines and prefer reading them again and again. My advise is that biographies of the best guys in business should be read like a text book not like a novel.
 
CLearly I am too obsessed with Lynch but I like it that way since it has helped me pick some outstanding investments.
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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Ajith
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Quote Ajith Replybullet Posted: 17/Aug/2006 at 10:06am
 No doubt Peter Lynch is best suited for our markets.But it is important for a small cap investor to read Ralph Wagner's book on investments.
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basant
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Quote basant Replybullet Posted: 17/Aug/2006 at 10:21am
Thanks. Ralph Wagner - DO you know the name of the Book?
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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Ajith
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Quote Ajith Replybullet Posted: 18/Aug/2006 at 2:43pm
 A Zebra in lion country.I think Ralph Wagners book on investments can give superb insights into picking and holding  stocks.

Edited by Ajith - 18/Aug/2006 at 2:57pm
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basant
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Quote basant Replybullet Posted: 18/Aug/2006 at 4:38pm

Never read his book but I did read about him somewhere. WIll try and put in a write up on him. He has compared zebras to institutional fund managers. He says  Both seek profits without takinng any risks and both prefer moving in herds.

Phenomenal concept!!!
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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prashantmohta
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Quote prashantmohta Replybullet Posted: 18/Aug/2006 at 4:50pm
this book is not available at amazon,pl. tell me where i could find it.
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Vivek Sukhani
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Quote Vivek Sukhani Replybullet Posted: 18/Aug/2006 at 4:57pm
well, I would like to ask just 1 thing...Dont you think the suitability of style depends a lot on the market conditions? I agree fully that first you need to make money than to protect money... however, as you make money dont you think we should get across more conservative bets. Colgate was a wonderful play in the mid-eighties, lever in the mid-nineties but for the last 5 years they have not been very kind to their investors.I beleive, one has to constantly revolve with one's trading strategies. At the beginning of a bull market, one should have Peter Lynch as his/her guru but if you become a bit concerned, you should have Buffett-like or Benjamin Graham-like investment guru.people tend to think of business when the going is very good but they start worry about finacials when the going gets a little bit uncomfortable.I am not trying to sound pessimistic, but I am getting not so good signals on the charts.
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Quote basant Replybullet Posted: 18/Aug/2006 at 5:34pm
Vivek it is very tough to change strategies. I am not aware of anyone  who has been successful changing styles. Once you make money in a particular style it kind of gets into your blood.That is because you develop conviction in that style nothing else. Finally the style that suits the mind is the best. Also either you are value or growth or blended does not matter as long as you stick to your strategy. For instance value investors may not significant lose money in any stock but their ability to make 10 and 20 baggers is limited, Growth investors may be wiped out in cretain companies but they hope to make that up some where else.
 
The icing on the cake with growth is if you have 90% of your bets going with you. It is not difficult as long as you have a plan - written or oral does not matter.
 
I have developed an excel spreadsheet model that tells me the fair market price of ANY stock The parameters that I use are
 
1) Market Price
2) Number of shares
3) EPS forward (if it can be projected)
4) PE forward
4) Market Cap/Sales
5) Dividend yield
6) price to Book
7) Management - I assign subjective marks here for instance Infy would get 10 out of 10 and an RPG co. may get 4 Tata 8 etc etc
8) Growth
9) Industry leader or not - Subjective marking is assigned here
10) Bank rate of interest
11) RoE
12) Ability to be around for 10 years - Again subjective marking.
13) Market cap
 
The weightages differ for each of the parameter. Now this is as much math as you can do. But inspte of all this I use this model as a second line of analysis. This model told me Bharti as a sell when it was Rs Rs 25 and I made a 4 bagger from thereon.That was because there was no EPS for Bharti.It told me a target price of Rs 75 for Pantaloon when it was at Rs 50. But I just saw it but never listened. this is because this model could not think 3 years ahead which we as humans can.
 
As for your question of wealth protection. Ships are most protected at the harbour but still they are made to take on the high seas.
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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