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BF12

The document discusses different phases of the stock market and businesses, reasons for stock price movements, and tips for identifying stocks to buy and sell. It notes that everything goes through cycles, and the stock market follows periods of bull and bear markets. It's difficult to identify what phase a stock or business is currently in. The document provides tips like buying when a stock is surrounded by bad news and people don't want it, and selling when the outlook is positive and less knowledgeable investors want to buy. Overall it discusses analyzing fundamentals and cycles to identify investment opportunities.

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Chandan Kumar
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54 views25 pages

BF12

The document discusses different phases of the stock market and businesses, reasons for stock price movements, and tips for identifying stocks to buy and sell. It notes that everything goes through cycles, and the stock market follows periods of bull and bear markets. It's difficult to identify what phase a stock or business is currently in. The document provides tips like buying when a stock is surrounded by bad news and people don't want it, and selling when the outlook is positive and less knowledgeable investors want to buy. Overall it discusses analyzing fundamentals and cycles to identify investment opportunities.

Uploaded by

Chandan Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Why do people trade the stocks they trade?

How to identify which stock to buy?

How to identify which stocks to sell and when?

What are the reasons for movement of stock


market in general and a given stock in particular?
Different Phases 

• Everything in nature goes through a cycle whether it is a living organism or weather. Like
living organism passes through different phases of birth, growth, maturity, decline and
lastly death or rebirth.

• In the same way, the stock market also follows a cycle. After a bear phase, there will be a
bullish phase but however, no one knows how much time it’s going to take. If someone
wants to enjoy the fruits when the situations are conducive, it’s important to adapt to
the harsh phase by being adaptive to the environment. The key here is patience.

• It may help you in identifying that where a stock is in its lifecycle. However, in real life, it’s
very difficult to identify the actual position in its lifecycle.
Is the life cycle of business similar to the 4 stages of the
stock market?
Bottomline

• The investors often look at the solid fundamental reason before investing in a company.
But one drawback of this approach is that by the time they have supportive evidence, it’s
already priced in and accordingly the stock has already moved by 300-400% i.e. the
market has already discounted the positive news.

• Look to buy a stock when the stock is surrounded by bad news and nobody wants to buy
it. The weak hands will try to exit their position on such news.

• On the other hand, after a good uptrend when the picture looks rosy, the smart investor
exits their position and offloads their stake to weak and news-driven investors.
50 Cognitive Biases to be Aware of so You
Can be the Very Best Version of You.

Should be taught to all at a young age.


Short Investing Rules: Morgan Housel
Investing Rules
1. Define what you’re incapable of and stay away from it.

2. You’re not proven until you’ve survived a calamity.

3. Plan on every plan not going according to plan.

4. Every product that changed the world was once belittled by the crowd.

5. The crowd is usually right.


Investing Rules
6. Work for companies you would invest in and invest in companies you would work for.

7. Nothing’s free, so figure out the cost of investment returns – emotional, analytical, whatever
– and be prepared to pay every cent of it.

8. Most great companies focus on the intersection of customer empathy and competitive
paranoia.

9. Most great investors focus on the intersection of patience and contrarianism.

10. Most contrarianism is irrational cynicism.


Investing Rules
11. Three types of businesses: Solve a customer’s problem, scratch a customer’s itch, exploit a
customer’s vulnerability.

12. Solving a customer’s problem is the most lucrative and enduring, especially as access to
information proliferates.

13. The biggest risks are things that aren’t in the news, as people aren’t preparing for them
because they’re not in the news.

14. Reducing your desires has the same effect as leveraging your assets, but with no downside
risk.

15. Spreadsheets cannot model trust and honesty, so due diligence always has to have a soft,
subjective side.
Investing Rules
16. Read fewer forecasts and more history.

17. Study more failures and fewer successes.

18. Reject existing beliefs as easily as you are persuaded by new ones.

19. No amount of intelligence can counteract the influence of extremely strong political beliefs.

20. Absorbing manageable damage is more realistic than avoiding risk.


Investing Rules
21. Everything is ten times more complicated than it looks.

22. Solutions should usually be ten times simpler than they are.

23. The cure to overconfidence is constantly reminding yourself that you’ve experienced maybe
0.00001% of the world.

24. Highly overrated: Forecasts, goals, and multitasking.

25. Highly underrated: Options, systems, and getting along with people you disagree with.
26 Short Investing Rules for the Indian Stock market

• https://www.moneycontrol.com/news/business/personal-finance/26-
short-investing-rules-for-the-indian-stock-market-7902851.html
Thank you!

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