52 Week Highs & Lows – How to Profit from Fluctuations in Sensex & Nifty Stocks

Fluctuations in share prices are as old as the concept of shares and stock markets themselves. Infact, had it not been for the regular fluctuations, stock market would have been a very boring place. It would be like a bond or a FD. And who would like that. 😉

As a long term investor, few things excite me more than the large fluctuations in share prices of individual companies. And I am not talking about small companies (having few crores market cap) here. I am referring to large caps, i.e. huge and well established companies of India.

Being a risk-averse investor, I have a liking for large businesses. Investing in well established and (supposedly) well-run businesses helps me sleep well at night. 😉 These businesses have witnessed and survived multiple bull and bear markets. So chances of them surviving again are pretty good.
And if we are patient enough, markets eventually do offer temporary mispricing in large caps shares.
But most investors believe that there are fewer opportunities to create money in large caps. I do not subscribe to this view and have already written about why it makes sense to consider large caps when others are looking elsewhere (This article was quotedby the CEO of a leading MF house in their monthly publication).
52-Week High Vs 52-Week Low
Now I did an interesting study comparing the 52-week lows with 52-week highs of various companies constituting Sensex and Nifty 50. Take a look at the analysis in tables below (share prices as of 30th June 2016). The column titled ‘% Change’ measures the difference between the 52-week high and 52-week low in percentage terms:

Sensex 52 week high low

As you can see, there is a huge difference between the two numbers for most companies. Infact, the average difference between the 52-week highs and lows is more than 50%.

Doesn’t that smell like opportunity to buy low and sell high, even in short term?

Now take a look at the Nifty 50 companies:

Nifty 52 week high low
The story remains the same. Here too, the 52W-high is almost 150% of the 52W-low.

Now these companies are well-established and safe businesses (ofcourse if bought at the right price). But think of it – does it really make sense that a company like (say) TCS, is worth Rs 4.2 lac crore today and worth Rs 5.5 lac crores after few months?

No – I don’t think so.

For most of these large companies, there isn’t much that changes at actual business level in the course of few months. Its only the perception of market participants that changes and moves the prices.

The reason for such wide difference in perception of actual value (which drives market price) can be many. In a post about fluctuations in market price of large companies, John Huber mentions about two sources of market’s inefficiencies: 1) Disgust and 2) Neglect.

Now large cap companies are generally not mispriced due to neglect, given the analyst coverage and popularity they have.

More often, mispricing is because of disgust or pessimism. This temporary disgust can be due to bad results, negative news, temporary legal problems, etc. Large caps (or even the stocks in other categories) can get beaten down even when the general market environment is pessimistic. In bear markets, shares of companies with no significant problems at all, are beaten down because of general economic pessimism. Its like all boats (good and bad) come down when the water levels reduce in river.

Mr. Market (and not Mrs. Market)

I am sure you have heard of the concept of Mr. Market (created by Benjamin Graham). This concept is quite relevant here and hence, I mention it:

Every day, Mr. Market will come up to you and quote a price for a stock (or stocks).

When he is optimistic about the future of the business, he will quote a high price to buy or sell. On days when he is not feeling great about the future, he would quote a very low price.

But luckily for you, he does not force you take a decision. You can choose to do nothing about Mr. Market’s quotes and he still won’t mind (maybe that’s the reason Graham created Mr. Market and not Mrs. Market). 😉

And if you are sensible, you would sell to him at a high price AND buy from him when his price is lower than what you consider low-enough.

And this is the beauty of this game. You can always wait. You can wait till the stock you want to buy is mispriced (on lower side).

Mr. Market’s continuous irrationality and urge to give a quote to you everyday creates the opportunity, which you should wait for.

And as Charlie Munger points out: “For a security to be mispriced, someone else must be a damn fool.”

So all you need to do is to wait to find a damn fool on the other side of the trade you want to make. If not a damn fool, even a fool would do. 🙂

A Real Life Example of Mispricing

A friend of mine is into poultry farming. Now without sharing the real numbers, lets assume that few years back his business was churning out annual profits of Rs 50 lacs.

One day, things got bad and some bird-disease spread in his farm. He had to take the drastic step of eliminating all birds as is the norm in poultry business. The business was in distress. At that time, he received an offer from a competitor to purchase his business (including physical assets) for about Rs 5 crore.

He declined the offer as it was too low. Also because poultry was one of the many businesses he owned, he could chose to wait for things to get better as he was not going to go bankrupt due to the poultry fiasco.

Eventually, he revived the business in an year or so and got another offer for about Rs 12 crore. He did not sell even then. I don’t know what price he would have sold at. Maybe Rs 50 crore (Sell high. Remember?). I don’t know.

But what I am trying to say here is that inspite of the business generating profits as earlier, there were buyers willing to give more than twice the original offer. Ofcourse, the original offer was made at a time of distress. But that was a temporary distress. Different people were valuing the same business at different times differently.

The same happens in stock markets.

Temporary problems (leading to disgust) or general pessimism (bear markets) causes share prices to go down. This doesn’t mean that that is the end of the road for the businesses. Businesses recover. And this what an investor should remember.

Market prices will continue to fluctuate more than actual intrinsic values. So as a discerning investor, if you are willing to look further than other investors and are also ready to accept short term losses and volatility, then you can indeed benefit from these opportunities.

This is what Warren Buffett had to say about how we as investors can benefit from these mispricings:

If you look at the typical stock on the New York Stock Exchange, its high will be, perhaps, for the last 12 months will be 150 percent of its low so they’re bobbing all over the place. All you have to do is sit there and wait until something is really attractive that you understand.

And you can forget about everything else. That is a wonderful game to play in. There’s almost nothing where the game is stacked in your favor like the stock market.

What happens is people start listening to everybody talk on television or whatever it may be or read the paper, and they take what is a fundamental advantage and turn it into a disadvantage. There’s no easier game than stocks. You have to be sure you don’t play it too often.

People tell me that small and mid-caps offer far more opportunities than large caps. That is true. And many times, these opportunities offer potentially higher returns than what mispriced large caps might offer.

But small cap investing comes with higher degree of risks and as I have already mentioned, I have a bias for looking out for mispricing in large cap stocks.

So if like me, you are also interested in large cap stocks, then do keep track of index (Sensex, Nifty, etc.) stocks and their 52 week highs and lows. I do it using simple Google sheet (screenshot below):

Tracking 52 week high low

I am sure that you will soon find large cap stocks getting mispriced. 🙂


Some Stocks in My Portfolio are Up More Than 100%!! But…

Markets are rising. Now no credit to me for telling you that. Credit is only deserved by one person who has given us all a new hope to cling onto. 🙂

I am a perennial worshiper of stock market crashes…atleast for next 20 years.

But when everyone around me was talking about how stellar their portfolio returns were, I could not stop myself from having a look at my own portfolio. And when I did check, I saw shares of some very good businesses up more than 80% to 100% in last 3 to 6 months!

I want to believe that I am good at stock market investing.

But then I realized that markets are supreme and I am no good.

I repeat.

But then I realized that markets are supreme and I am no good.


Rising Tide Stock Markets

Rising markets are loved by all. But it’s the pace of this rise that is frightening. Large caps are rising 10% to 15% every day and moving like big icebergs all over the place.

Not sure how long this would last. Lets see..

By the way, I hope you have pre-registered (free) for the launch of Ultra Long Term Stocks.

Pre-Registration closes on 25May-2014.


More Than 400 Investors who have ALREADY Pre-Registered (Free) for Ultra Long Term Stocks.

Join them before 25th May 2014.

Pre-Registrations Have Closed.

Top 23 Large Cap Indian Stocks

We are students of the Capital Protection School of Thought*, which is built on the thought that “Return OF Capital is more important than Return ON Capital”.

* There is no such school in real life 🙂

You might feel that if our prime motive is capital protection, then why are we entering stock markets? You are right. Stock markets are risky places where chances of losses increase in direct proportion to chances of achieving higher returns. There are n number of other safe investment instruments like bonds, PPF, NSC, Bank Deposits, Recurring Deposits, gold, etc. But we must be aware of their limitations too. Historically, these asset classes have failed to beat equities in the long run. So though we hate losing money and want to stick with rock solid and safe instruments, the fact remains that we cant ignore equities.

So, if you are in sync with what we just said OR if you consider yourself to be an average investor, incapable of giving a lot of time to stock analysis, it makes sense to only go for proven businesses in stock markets. These are companies which have been there and done that. They are businesses which are capable of weathering economic, political, sectoral storms. These are large businesses. These are large cap companies.

We always had an attraction for large cap stocks available at cheap prices. So when Morgan Stanley came out with a list of large Indian businesses with market cap greater than $10 Billion, we couldn’t help getting attracted towards it. 🙂

The guys at Morgan Stanley have taken these 23 ten billion dollar companies and ranked them on following parameters –

  • Strong 5 year trailing ROE and earnings growth
  • High forward change in ROE and earnings
  • Depth & breadth of consensus earnings revision

We don’t know the exact details of the rating/ranking mechanism, so we can’t comment on the same. This list is a work of Morgan Stanley. You should not take this post as an endorsement by Stable Investor about these stocks or Morgan Stanley’s approach. Do have a look at this list. And if you do invest your money in any of these stocks, that would be at your own risk. 🙂

India’s Top 23 Large Cap Stocks

Disclosure: We do hold some of these stocks in our personal portfolios.


Large Cap Nifty Stocks – Returns since our call in December 2011

Important: Don’t miss the last paragraph.

When we wrote Large Cap Nifty Stocks available at deep discounts in December 2011, we were very excited to find a number of great companies available at very cheap prices. And since the world as well as Indian economy hadn’t fully recovered, it was really common sense that one stuck with businesses which could weather the economic turmoil. We advised and bought a few of these large caps for our personal portfolios.

So after an year, when index has given 25% returns, we checked the performance of individual stocks. And we must say that we are more than happy to see around 15 stocks giving 40% + returns. But there are a fair number of duds too. There are 10 stocks which trade at discounts compared to December 2011 prices.

Large Cap Nifty Stocks Returns One Year
Nifty Stocks: One Year Returns (Dec 2011 – Dec 2012)
As of now, markets are trading at a PE of close to 19 and since markets have run up around 800 points in last 4 sessions, we are not sure if it’s a good time to pick stocks. We would rather wait and watch for the time being.

Caution: Our post might make you believe that we have good predictive capabilities. The fact is that we don’t. Why? Markets have risen 25% in last one year. So have all stocks representing the market. And as Warren Buffett said: A rising tide lifts each and every boat. You only find out who is swimming naked when the tide goes out.


How often should you check your stock portfolio?

This post is based on OSV’s post by Daniel Sparks. Daniel was kind enough to permit use of his idea for this post. Thanks Daniel 🙂

So how often do you check your stock portfolio? We have personally seen people checking stocks in their portfolio every few minutes! But we are not going to judge them. They may be short term traders who need to do it as they are there to make quick profits, or they may be ones who get a high everytime their stock moves up a bit (even though they will not trade regularly). We will rather talk about long term investors. Investors who are willing to stay put in markets for years and if possible, decades.

In the greatest investment book ever written (The Intelligent Investor), Benjamin Graham says –

“The investor with a portfolio of sound stocks should expect their prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances. He should always remember that market quotations are there for his convenience, either to be taken advantage of or to be ignored.”

Greats like Benjamin Graham, Warren Buffett & many other veteran long-term investors pay very little attention to daily prices. They buy stocks of great companies and pay more attention to what the company is doing and how the economy is affecting the company’s operations.

But we are not Warren Buffett, and therefore we need to understand that we cannot operate like him. We must accept the reality, that we do and will check our stocks as much as possible. 🙂

But what we all can TRY is that we can reduce are frequency of checking stocks. How do we do it? At first, we need to segregate them in following categories –
  • Large Caps
  • Dividend Stocks
  • Mid Caps
  • Growth Stocks

Large Caps

Large Caps are industry leaders, have sustainable businesses and provide solidity to your portfolio. They are generally among the top 100 companies by market cap. They typically don’t need to be checked very often because you can rely on their reliable cash flows & good managements. So if you are ready to stay invested for years, it does not make much sense to check them on a quarterly basis. Such companies don’t change much on quarter to quarter basis. An investor should rather focus on checking the annual reports (and letter from management). In addition to checking such stocks on annual basis, one should also set some kind of alerts to get notified in case prices move more than 5% in a day on either side (sites like allow such service). This helps staying in loop in case of some major news or development, which demands an investor’s attention.

Dividend Stocks
Being part of mature industries, dividend stocks are generally not very volatile. They are present in portfolio primarily for their dividends and less for capital appreciation. Like large caps, these stocks provide a lot of solidity to portfolio. Such companies should be looked at on a half yearly basis to see if they are performing in expected manner, whether dividends being paid are increasing / decreasing / remain same. Alerts can be set up in manner as specified for large caps.

Mid Caps
Mid caps are companies which are outside the top 100 companies by market cap and are more volatile to news or result declarations. Their prices move very quickly and therefore it is important not to be overwhelmed by any drastic price movements. The important point is to understand the difference between meaningful news and short term jitters and not fall victim to acting on emotions. Such companies should be checked on quarterly basis to see if the company is performing as expected or otherwise. Alerts can be set at (+/-) 7%.

Growth Stocks
These are companies that are growing at fast pace and are part of rising industries. Such stocks do not offer dividends (generally) and hence are of very volatile nature. Such stocks should be checked every quarter to see whether growth story is intact or not. Alerts can be set at more liberal (+/-) 7%.

One of the advantages of setting alerts is that it allows a long term investor to be ready to buy more, in case prices fall a lot but reason for buying the stock initially still remains valid.

We must understand that the most important decision is not how often one checks stock prices, but what one does with that information. One should act on changes in the economy or other conditions that affect the company.  Reacting purely on price changes is not a wise thing to do. Daniel Kehneman said:

“Investors should reduce the frequency with which they check how well their investments are doing. Closely following daily fluctuations is a losing proposition, because the pain of the frequent small losses exceeds the pleasure of the equally frequent small gains. Once a quarter is enough, and may be more than enough for individual investors. In addition to improving the emotional quality of life, the deliberate avoidance of exposure to short-term outcomes improves the quality of both decisions and outcomes. The typical short-term reaction to bad news is increased loss aversion. Investors who get aggregated feedback receive such news much less often and are likely to be less risk averse and to end up richer. You are also less prone to useless churning of your portfolio if you don’t know how every stock in it is doing every day (or every week or even every month). A commitment not to change ones position for several periods improves financial performance.”

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Huge returns given by Nifty 50 Stocks & how we got it right back then :-)

You must be wondering – Why 10 months? And not something more rounded-off like 1, 2 or 5 years? The reason is that in December 2011 (about 10 months back), we wrote about Nifty 50 stocks and prices which they were available at. At that time, we felt that some of these stocks were available at quite low prices when compared to their previous highs (2011 & 2008 highs). Our view was quite evident from the title of the post “Large Cap Nifty Stocks available at deep discounts.

Though you can read the post to better understand our view, in short we felt that some of these large caps were available at quite beaten down prices and it seemed more prudent to stick to businesses which could weather the economic storm rather than trying to find the next multibagger. We advised and started selectively buying (for our personal portfolios) some of these large cap stocks, which scored high on sustainability parameter and had revenue & profit visibility.

So after 10 months, with index up almost 22%, we decided to see where individual stocks have moved. The result is given in table below. Please note that we have compared only price movements and not the underlying value.

Note – Stocks removed or added to Nifty 50 do not feature in the table
  • A few of these names, which are a part of an average investor’s portfolio like Tata Motors, HUL , ITC, Maruti, HDFC & ICICI have given close to 50% return in last 10 months!!
  • But there have been others like Bharti, PNB & BHEL, which have given negative returns too.

So are we saying that we have special powers to predict market movements? Do we know how to time the markets? Absolutely not!! Nobody can predict market movements. Not even greats like Warren Buffett. But what we can do is to learn from history of stock market valuations. And history tells that markets near PE=14 are undervalued. But does it mean that it won’t go down lower? No. Markets can go further down to PEs of 10. What it does mean is that it is time to start accumulating stocks of good businesses.

With current PEs hovering above 19, we are not sure if it’s a good time to pick stocks which have already run up a lot in last 3 months. But in times of confusion (as we said that ‘we are not sure’), it is best to stick with regular systematic investment (SIPs) and wait for valuations to come lower.

Note – We have added a State of the Market tab where you can check latest market valuations parameters. Hope you find it useful.

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Large cap Nifty stocks & 3 Year Lows

If you are looking for good, large cap (safe) stocks to invest in, a good starting point can be a list of stocks trading near their 3 year lows. While putting down the ground rules for our portfolio, we had mentioned that large cap stocks can (or should) be bought when they are trading near their 2-3 year lows.

The reason we advocate 2-3 year lows as a good entry point is that as long as our purchase price is closer to 2-3 year lows (& the industry is not going to the dinosaurs and company is not going to go bankrupt), and we are ready to wait patiently, the odds would be in our favor that these investments will prove to be profitable.

Though this should not be the only criteria, it is a simple yet powerful criteria to look for bargains in large cap space. So here is a list of Nifty 50 stocks and their relative positions from their 3 year lows –

A stock may be near its 3 year low due to many reasons, like cyclicity of industry, overall pessimism in economy, negative newsflow about company itself, regulations or government interference in sectors, etc.

Though readers can make their own deductions, we would like to highlight that upper half of the list, i.e. stock which are closer to their 3 year lows, is dominated by industries like steel, power, oil, mining etc. So is it a good time to accumulate stocks in these sectors? It is for you to answer. 🙂

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Launching the Dead Monk’s Portfolio – Ground Rules

After a lot of deliberation, both recorded (Part 1, 2, 3, and 4) and unrecorded, we have finally managed to put down the ground rules for Dead Monk’s Portfolio.

If you haven’t read our earlier posts on this issue (which changed our hearts), we recommend you do so. It will give you an idea about how and why we zeroed upon this approach.

So without further delays, we present to you the details of our new portfolio in form of FAQs.

Where has the old portfolio vanished?

We have abandoned our old portfolio – Monk’s Portfolio. We have removed all posts related to it.

Then what is this new portfolio?

The new portfolio is named DMP – the Dead Monk’s Portfolio.

Why such a funny name?


Do you have to pray to God for making this portfolio work?
Yes. We have a Portfolio Prayer (We need it) J

~ ~ ~
Remember God in good times and equities in bad times.

We shall welcome bear markets as they allow us to buy from pessimists.

We shall love fear and blood on the streets.

We will always buy with an intention to hold for long periods and preferably, forever.

We shall hate selling stocks, unless fundamental reason of buying them changes for worse.

~ ~ ~
What is DMP’s basic structure?

The portfolio would follow Core-Satellite approach with one core and four satellites.

Can you give the details of the new portfolio’s exact structure?

Dividend Core
This would form 50-60% of the portfolio.

This would comprise stocks which
          Are regular dividend payers
          Have paid dividends consistently for last 5 to 10 years
          Have been profitable in last 5 years
          Have sustainable & ordinary dividend yield of more than 3%
          Have a sustainable dividend payout ratio
          Trade at low P/E multiples (<12; preferably <10)
This part of DMP would result in a regular, sustainable & increasing income stream, which would be used to increase the size of DMP by reinvesting these dividends selectively in stocks already present in DMP.
Growth Oriented
This would form 20-25% of the portfolio.
This would comprise of stocks which
          Are from mid-&-small cap
          Have been in existence for around 10 years
          Even with most pessimistic outlook, would survive for next 10 years Or should be good takeover targets
          Have been profitable in last 3 years
          Trade at low to medium P/E multiples (preferably <20)
          We don’t expect such stocks to pay dividends
          Good ROE in past 5 years
          Good and dedicated management
These stocks would be our bets on long term growth and can be potential future blue chips. These would be businesses which have potential as well as management genuine intent to reach the blue chip category. But we must be cautious that obvious prospects for physical growth in a business do not translate into obvious profits for investors (Graham).

Large Caps
This would form 15-20% of the portfolio.
This would comprise of stocks which
          Are from large cap category (preferably of Market Cap>Rs 15,000 Cr)
          Have been in existence for more than 20 years
          Even with most pessimistic outlook, would survive for next 10 years
          Have been profitable in last 5 years
          Trade at low P/E multiples (<12; preferably <10)
          Trade at low P/BV multiples (preferably <2)
          If they do pay regular dividends, then nothing like it J (why we love dividends so much?)

Large caps give strength and stability to our portfolio as they are better suited to weather downturns, economic recessions, etc.

Cyclicals (Large + Mid Cap)
This would form 10-15% of the portfolio.
This would comprise of stocks which
          Are preferably from large cap category
          Have been in existence for more than 10 years
          Even with most pessimistic outlook, would survive the next downturn and for next 10 years
          Have been profitable in last 5 years
          If they do pay regular dividends, then nothing like it.
We would have loved to time our entry into cyclical stocks because there cannot be better wealth creators if one can time one’s entry and exit well. But timing, that too cyclical business’ is tough. That is why we prefer large caps of cyclical companies as they can weather the downturns better than small caps.
Note – We are still trying to understand how cyclical stocks work and how empirical ratios like P/E, P/BV can be used to enter such stocks at levels which may not be lowest, but somewhere below historical averages.

Miscellaneous / Speculative / Special Situations related bets
This would form 0-5% of the portfolio.
This would comprise of stocks which
          Are preferably from large cap category. But may be from any of large, mid, small or micro cap categories.
This would comprise of stocks in high risk – high reward category. We would never take blind bets based on tips given by others (read traders – We hate them so much!!). We would analyze the business behind the stock to see whether risk reward ratio is skewed towards reward or not and then take sensible calls.

When would you buy stocks for DMP?

Though it’s a tough task to time the markets, the fact remains that one should invest when there is over pessimism in market. In one of our earlier posts, we tried to decipher whyaverage investors like us should be concerned about entry price of stocks. Here also, we share a few guidelines to help us make buying decisions, a little quantitatively.

·         Dividend Core
          When stocks are trading closer to their 2-3 year lows
          When stocks are trading in PE & P/BV range of Lowest & Average of-last-5-to-10-years.
          When P/E x P/BV < 22.5 (Graham’s)
          When stock features in top-20 lists made on basis from High ROE and High Earnings Yield (Magic Formula)
          When Dividend Yield of stock crosses 5% without any substantial negative change in fundamentals

·         Growth Oriented
          When stocks are trading closer to their 1-2 year lows
          When stocks are trading in PE & P/BV range of Lowest & Average of-last-5-to-10-years.

·         Large Cap
          When stocks are trading closer to their 2-3 year lows
          When stocks are trading in PE & P/BV range of Lowest & Average of-last-5-to-10-years.
          When P/E x P/BV < 22.5 (Graham’s)
          When stock features in top-20 lists made on basis from High ROE and High Earnings Yield (Magic Formula)
          When overall markets are trading at low multiples of P/E, P/BV & Dividend Yield, as detailed in an earlier post.

·         Cyclicals
          Note: We are still trying to understand how cyclical stocks work and how empirical ratios like P/E, P/BV & Dividend Yield can be used to enter such stocks at levels which may not be lowest, but somewhere in a range, which skews the risk reward ratio in favor of rewards.

·         Miscellaneous / Speculative / Special Situations related Bets
          Need to be analyzed on case by case basis.

When would you sell stocks in DMP?

Though we hate selling stocks, there may and will be times when the very reason which resulted in a buying decision, ceases to exist. This would require selling some shares in DMP. We will work on selling triggers for our portfolio soon. As of now, we don’t plan selling what we own, and don’t plan buying what we would like to sell in the next 10 years.

In the event of temporary downward movement in a stock’s price, would we be happy to buy more shares?

If we have free funds which we do not require for next few years, we would definitely be interested in averaging down our costs. But this would be done after confirming that fundamentals of stock remain good enough and there are no fresh triggers for us to sell the stock. Some investors may be unwilling to pick up more shares of a particular stock, even when the opportunity to buy discounted shares is presented.  We would rather treat this opportunity as a discount sale of stocks which we would love to buy.

Is there just one Dead Monk’s Portfolio or multiple versions?

Dead Monk’s Portfolio is a reflection of our thoughts. It is built around our risk profiles, understandings of markets & our own strengths and weaknesses. It will not be exactly same as ones maintained by the two of us, as we maintain a total of 4 portfolios (2 personal and 2 for our families). But since Stable Investor is a journal of our learnings in portfolio maintenance, sooner or later, our personal portfolios would come in line with what we learn here. Therefore, to keep things simple, we will have just one DMP.

Do you maintain a buy list of stocks at all times?

Absolutely! We would prefer that any stock which we buy should first enter our buy list and then our actual portfolio. A buy list also helps in tracking multiple companies which we may be interested in future. Keeping a rough record of such companies from the start is necessary as the price may not be right at the time when we first analyse a company.

How do I track Dead Monk’s Portfolio?

We are putting up a dedicated page for easy tracking of DMP. All posts related to DMP and latest portfolio snapshot can be found there.

Do you have anything else to share?

We have a personal experience about large and mid caps. There are times when due to lack of any trigger worthy news and discussion in media, a stock tends to go down without any significant change in fundamentals. These are the times when one can accumulate these blue chips.

According to WB, as an investor, our goal should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now. Over time, we will find only a few companies that meet these standards. We must also resist the temptation to stray from these guidelines: If we aren’t willing to own a stock for ten years, we shouldn’t even think about owning it for ten minutes. We should aim to put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.

One should “never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.”

What is this Dead Monk’s Disclaimer?

Dead Monk’s Disclaimer: No matter how careful we are, as an investor, we will never be able to eliminate the risk of being wrong.

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