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subu76
Senior Member
Joined: 25/Feb/2008
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Posts: 5709
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   Posted: 07/Nov/2008 at 11:19pm |
Some masala from Lynch: (courtesy The warren buffett way by Hagstorm)
Peter Lynch
"One weekday evening early in 1989 I was home and when the telephone rang. Our middle daughter, Annie, then 11, was first to the phone. She told that Warren Buffett was calling. I was convinced this had to be a prank. The caller started by saying "This is Warren Buffett from Omaha (as if I might confuse him with some other Warren Buffett). I just finished your book and loved it.and would like to quote one of your sentences in the Bershire annual report. I have always wanted to do a book, but i never have gotten around to it" He spoke very rapidly and with lots of enthusiasm and must have said forty words in fifteen to twenty seconds, including a couple of laughs and chucles"
Here's what WB put in his 1988 annual report:
We are just the opposite of those who hurry to sell and book profits when companies perform well but who tenaciously hang on to businesses that disappoint. Peter Lynch aptly likens such behavior to cutting the flowers and watering the weeds.
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shankar
Groupie
Joined: 29/Jul/2007
Location: India
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Posts: 64
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Posted: 08/Nov/2008 at 6:33pm |
I am guilty of pulling flowers and watering weeds many times Subu, but thankfully all those happened in the bull market, and the bull market like a kind goddess, forgives all mistakes. It is the bear market that makes qualitative selection and proper entry and exit such interesting concepts.
That said, I really must bow my head to Peter Lynch for lighting up the way for me in one of my picks. It was his glorious analysis and exhortation in his book Beating the Street that finally convinced me to invest in regional bank stocks. Believe me, what he says about regional banks in that book is applicable to India too. Some of them have given returns of fast-growing companies but trade at PE ratios fit for utility stocks. 
Edited by shankar - 08/Nov/2008 at 6:38pm
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When the tide runs out, you can see who has been swimming naked - Warren Buffett
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9StockPortfolio
Senior Member
Joined: 10/Sep/2008
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Posts: 479
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Posted: 09/Nov/2008 at 9:44pm |
Originally posted by omshivaya
Okay, thanks for the info. Appreciate it!! I am sorry but I dont have a soft copy of 'One Up...' :-) |
Thats fine, Om, I bought the book yesterday, and I must admit that, it's wonderful book to read. Just like The Buffet way. Thanks for your thread that brought this book to me. 9StockPortfolio
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Pursuit of Value
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omshivaya
Senior Member
Joined: 06/Sep/2006
Location: India
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Posts: 5966
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Posted: 09/Nov/2008 at 11:38pm |
"Asking about the competition is one of my favorite techniques for finding promising new stocks. Muckamucks speak negatively about the competition ninety-five percent of the time, and it doesn't mean much. But when an executive of one company admits he's impressed by another company, you can bet that company is doing something right.
Nothing could be more bullish than begrudging admiration from a rival"
(P177)
PS: Glad that you got hold of the book 9Stock jee. Happy Reading
Edited by omshivaya - 10/Nov/2008 at 1:20pm
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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manish_okhade
Senior Member
Joined: 20/Oct/2008
Location: India
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Posts: 1997
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Posted: 10/Nov/2008 at 2:07pm |
I spent a lot of time reading investing strategies from proven people. Still i have one doubt, Is share prise is slave to earnings or slave to market sentiments.
For example in past bull phase one can buy any stock irrespective of fundamentals and earn a lot while in recent bear phase i am seeing many companies whose earnings growth on quarteraly basis is as good as that of bull phase but their shares are not moving up, at least not as they used to be in bull phase.
So is share mkt a purely matter of sentiments of group of participating people or its earning which truly reflects share to go up? Point is that whats the best investing strategy i.e. to buy when sentiments are down and wait (indefinitly) till sentiments recover irrespective of underlying fundamentals?
Moreover when i look at the all the MFs they are all -ve now just beacause of sensex crashing. MF are run by truly smart people (IIT,IIM) and they live their life on Dalal street, how can one say that all of them are dumb! In spite of so much smartness money comes only and only if mkt sentiments recovers or FII invests or say some good global news comes but not due to fundamentals.
Any comment from senior members will help to clear this dilemma.
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hallmark
Senior Member
Joined: 27/Jan/2008
Location: India
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Posts: 366
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Posted: 10/Nov/2008 at 5:31pm |
From my limited knowledge, most of the mutual fund investors who had waited in january and october, had bailed out just at the wrong time. Right before the market hit it's bottom. That is a dumb thing to do.
Every strategy is a success in the bull market, every fool can make money. I am amazed how traders in the book "Stock Market Wizards" over a 5-7 year period are able to grow at 30-70% yearly. Maybe after the tech meltdown from 2000 onwards, things will be different.
My essential theory that I have understood first, that people should follow a strategy which is inline with their personality. In my case, i am an investor and can live with 20-40% returns from midcaps every year. Traders in most cases, are people who are highly sexed or might have lost their virginity at an early age or I would say have one-night stands.
The second theory I would say is have an independent mind and framework in trading or investing.
The third strategy to understand is even in the case of American equity markets, in the case of GE Warren Buffett has lent money at 10% interest. In developed markets, it pays to be a trader. Whereas in Indian equity markets, It is dumb not to be a investor.
We can learn from each other.
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hallmark
Senior Member
Joined: 27/Jan/2008
Location: India
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Posts: 366
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Posted: 10/Nov/2008 at 5:40pm |
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It is important to remember that most of the traders do not succeed. People with the following attributes which I have enumerated are successful.
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omshivaya
Senior Member
Joined: 06/Sep/2006
Location: India
Online Status: Offline
Posts: 5966
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Posted: 10/Nov/2008 at 5:46pm |
"You can see the importance of earnings on any chart that has an earnings line running alongside the stock price...On chart after chart the two lines will move in tandem, or if the stock price strays away from the earnings line, sooner or later it will come back to the earnings.
...ultimately the earnings will decide the fate of a stock. People may bet on the hourly wiggles in the market but it's the earnings that waggle the wiggles, long-term. Now and then you'll find an exception, but if you examine the charts of stocks you own, you'll likely see the relationship I'm describing."
(P163-164)
Edited by omshivaya - 10/Nov/2008 at 5:49pm
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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