100th Post: A time to introspect

When I started writing my blog 15 months ago I had in mind the interest of the investors who, in the absence of adequate information on the investment products/environment, were prone to making unwise decisions at times. I have since written about stock markets, economic environment and issues related to Financial Planning. When I started writing the blog in December 2007 the markets were booming. Since then we have seen a lot of gloom and doom on the markets, investors' worth has been eroded rapidly and we have moved from a situation of 'Exuberant optimism' to 'Unwarranted pessimism'. Perhaps it is a time to introspect!

I would like to go back to my first post in which I had given a definition of 'INVESTOR'. If an investor wisely follows these eight tenets, life would be merrier for him in the 'Investment World':

1. INTELLIGENCE: Rely on your intellect and sagacity, acquire information from various sources, listen to views of experts, but be guided by your own conviction before taking an investment decision.
2. NOVELTY: Bulls and Bears on the market represent the two most forceful human emotions of 'Greed and Fear'. Novelty represents the investor's ability to do something different. This 'Contrarian strategy' helps overcome these emotions of greed and fear.
3. VERSATILITY: This represents the investor's adaptability to change. Market forces keep on changing constantly, sectors and stocks get re-rated, so one must be prudent to learn the 'Art of profit booking'.
4. ENDURANCE: It is the fortitude and forbearance of the investor. As an investor you need to keep your cool when things are not moving as per your plans, don't get carried away by the short term swings in the markets.
5. SMARTNESS: It is the ability of the investor to outscore the others with quickness of mind and cleverness. Smart investors look for opportunities in all kinds of markets. Let the principle of 'Margin of safety' guide your stock selection.
6. TENACITY: Patience is one of the greatest strengths of an investor. Focus on the underlying strength of the stock/ investment based on fundamentals, and forget about the daily price movement. Remember, investment is not a 20-20 cricket match.
7. OPPORTUNISM: An investor must always be prepared to seize a good investment opportunity. Market downturns should be viewed as buying opportunities, because the prices of good stocks also tend to get depressed due to 'fear psychosis'.
8. RATIONALITY: If markets were to behave rationally, there would not be any opportunity for making money. The power of reasoning is the discerning factor that differentiates an investor from a 'speculator'. Buying a good stock is like fostering a long term friendship.

As I write my 100th post, the clouds of pessimism seem to get thinner, and notwithstanding the sharp swings in the markets, we might see a strong global recovery 4-6 months down the line. Do send in your valuable feed back on my blog. Wishing you all 'Happy Investing'.