We have been investing in the Indian stock market since 2005. During initial years we too made mistakes and lost some money. However, we learned some valuable lessons in this process. This is summarized in one of our reports – 6 common mistakes investors make.
“It’s not supposed to be easy, anyone who finds it easy is stupid” – this is what Charlie Munger said about investing.
Then we thought why don’t we subscribe to some of the premium stock recommendation services run by experts.
Firstly, we subscribed to one of the leading stock recommendation service. They used to send one recommendation every month and later we realized that 60% of their recommendations went wrong.
Buffett said, “There’s only two things that can go wrong: you can buy the wrong ones, and you can buy them at the wrong time”.
What we learned:
It’s almost impossible to find good quality companies at low prices when the market itself is expensive.
Secondly, we subscribed to another leading stock recommendation service. They tried to forecast the future success of a stock purely based on past data. They recommended many low quality stocks at cheap prices and more than 50% of their recommendations went wrong.
This is where sustainable competitive advantage comes into play.
Buffett advises, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”.
What we learned:
At a minimum, try to stay away from low quality companies.
Then we studied Legendary investors such as Graham, Buffett, Munger, Lynch and Howard Marks. What was the secret to their success?
After 10,000 hours of research, we came up with a simple blueprint:
– Buy good quality companies at a reasonable price
– Buy a low cost index fund at a reasonable valuation
We believe our investment ideas will help common investors to avoid mistakes. We will help you think in the right direction.
Mike, Private Investor