Hi all,

I began posting my views on various stocks starting from June09.

I have tried to tabulate the prices at the time of posting and the highs and lows post synopsis posting in various stocks.

My initial knowledge regarding stock picking and what to look for in a stock before investing was based on reading Peter Lynch's book "One up on Wall Street" and some research for fundamentals on the net for various financial data.

I was not initially conversant with parameters like Cash Flow, ROE,ROCE etc and still don't know how exactly to compute them but now know the utility of such ratios and implications of such ratios in researching stocks.

I have done some retrospective study on the stocks I posted  and come out with various inferences based on this study. I hope this helps fellow amateur stock pickers in coming up with good picks which can help us all get richer in knowledge and financially as well.

INFERENCES:

1 Relatively lesser known stocks or stocks out or favour with good fundamentals or good future prospects are likely to give superior returns. The  amateur investor/stock picker has an edge here because not too much is known about the company or its prospects.

2. Commonly known and recommended stocks like essdee, anantraj, etc have not given very great returns. Here most of the people know almost everything about the stocks.

3. It is very important that stocks chosen do not have too much debt or if there is debt, it has to be serviceable as in the case of parekh aluminex.

4. The general perception of average investor about the management pedigree may be flawed and has to be taken with a pinch of salt. E.g  In thread of Parekh Aluminex, there were a lot of allegations about management integrity based on their rumoured buying/selling stocks in stock markets. If these were taken seriously, a two bagger would easily have been missed.

5.High return ratios are always not necessary for getting good returns when there i s good market momentum.   These could be very important for stocks which are bought into with a long term view in mind. E.g 1-3-5 or more years

6. Market perception about the prospects of a company often changes within a short span of time and this often leads to sudden changes in stock prices.

7. I have observed a fair amount of lag period between posting of a stock and run ups in stocks which allows one to do some more research and thinking and then buying the stock.(the exception being tci industries as rapidriser will agree.)   It is also possible to keep looking at these stocks and buy during good declines as in case of anantraj inds or ind Nippon or Heidelberg cements.

Hitesh,

Appreciate the efforts to summarize your investment philosophy. Indeed i agree with most of your approach. Just would like to add following:

Small/mid caps inspite of their fundamentals fall very fast as compared to proven businesses in large caps. They run up very late too like in present time when investors are finding it hard to find good bets in large caps. So they are a risky buy at run up or peak but an excellent buy on dips. So cathc is here that one should pick them up when the business looks scalable in future and not dependant on few vectors alone.