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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Archive for the ‘Tweets’ Category

Nuggets for 25th February

Posted by Muthu on February 25, 2018

Some of my recent tweets:

1)Most of us call ourselves long term investors only till a short term setback start happening.

2) A long term investor needs to learn to live through upgrades and downgrades, buy and sell calls, over valuation and under valuation, multi-bagger and 50% falls, breakthroughs and setbacks. There is no way to avoid this roller coaster ride.

3) May sound stoic. But there is no way to avoid pain and under performance in markets. Even legends have undergone this. None of us would be an exception to this rule. All the more, why we need to be modest during successes.

4) I agree with Lou Simpson who said that lot of people don’t have the patience or temperament to really be investors.

5) Patience has its origin in a French word meaning suffering. To be patient is to suffer. No doubt, investors find patience the most difficult trait to develop.

6) Not having to time the market and keep making frequent buy and sell decisions is bliss. Try it and see.

7) Never done anything bad for clients. But financial independence made me to be completely truthful to clients even overlooking my own interest.

8) Businesses grow on a timescale of years. We want stock prices to move on a timescale of few weeks or months. This mismatch reduces our critical asset, patience.

9) We are not capable of timing bull or bear markets. We don’t know when correction would happen, how far and when markets would rise again. We follow this simple rule: Invest when we’ve money and sell when we need money, ensuring a there is a minimum 10 year time period in between.

10) If we learn to appreciate, uncertainty can be beautiful. We fall for forecasts because they provide us the fallacy of certainty.

11) Don’t keep chasing new ideas. Ideas are dime a dozen. Staying the course even with a mediocre idea would give better results than constant churn due to chasing of new ideas.

12) I’m absolutely convinced that if one can master his behaviour, huge fortune can be made through markets over long run. As Munger says, repetition is the heart of instruction and we would repeat this tirelessly for both your and our benefit.

13) Starting its journey from 1979, Sensex has made innumerable new highs in the last 4 decades. It would continue to be so. If you think the current market level is high, wait and see where it would be after 10 years.

14) We fear both rises and falls, peaks and valleys, highs and lows. We are seldom at peace. You can never avoid these swings in markets. Develop and stick to a strategy which would keep you grounded all times.

15) Anything and everything may work in a bull market. The benefits of having a well defined investment philosophy and strategy would be evident only during deep corrections and bear markets.

16) Financial independence not only allows you to control your own time, it also helps you to buy others time (say employing a driver). Time is the most finite and precious wealth.

17) Why we focus mainly on behaviour and emotions? Because mis-behaviour and lack of emotional control cost us lot of money. Losing money is losing time. We just don’t realise it.

18) Corrections and bear markets are regular occurrences. Nothing unusual about it. It only becomes a problem when we sell during these times converting notional into permanent losses.

19) Agricultural income is 100% tax free. Do we take farming as occupation because of this? All investment decisions need to be taken on fundamental merit and not tax arbitrage. Fundamentals would last and tax arbitrage may not.

20) Financial independence is a state where instead of you working for money, money works for you.

21) If you’re feverish about building wealth; would leverage, chase fads and make many other mistakes. Have wealth goals without being feverish. You’ll then make fewer mistakes and build sustainable wealth.

22) Google and go through what experts predicted about effect of demonetisation, Brexit and Trump presidency on markets. The more you read old forecasts; you would not take any present forecasts seriously.

23) Completely ignore all forecasts. Have a broad brush view that our country and hence corporate India would do well over long term. If you don’t have this belief, avoid equity. Equities are only for those who have faith in future.

24) I started learning in a right way only when I started teaching my clients. The best way to learn is to teach. To rephrase it better, the best way to learn is to share.

25) Everyone act based on their self interest. Advisors are no exception. But just be sure that his and your interests are aligned. Don’t believe anyone who says he is acting solely on your interest.

Posted in Tweets | 4 Comments »

Nuggets for 20th January

Posted by Muthu on January 20, 2018

Some of my recent tweets:

1) When we buy quality, time creates wealth. When we buy junk, time destroys wealth. Time is useful in investing only when it is backed by quality.

2) Right behaviour ensures investor returns is equal to investment returns. Though this sounds very simple, it is rare and only few investors make it.

3) Don’t expect immediate gratification. Only when you accept delayed gratification, you become eligible for long term investing.

4) If we time the market, need to be correct at every entry and exit, repeatedly. We have no such ability. Believe that fortunes are made by buying right and holding on.

5) In investing, genius is one who has developed enormous patience and discipline.

6) Patience does not come easily. It needs tremendous discipline and practice. That’s why making money and retaining it is never easy.

7) My results have improved from the time I started focusing on buying right, sitting tight and be a reluctant seller.

8) Rewards for patience happen only over years not weeks or months. How much ever this is emphasised, only few would follow. Delayed gratification is not easy.

9) In hindsight, staying the course looks easy. As every tomorrow has always been uncertain, staying the course is most difficult but extremely rewarding.

10) Being rich is having only money. Being financially independent is having both time and money.

11) Investing is simple. It gets complicated only because of our behaviour. Behave well, all will be well.

12) There is nothing new in worrying about global factors, politics, interest rates and macros. People have always been worried about it and would continue to do so. Equities have done well despite real and imaginary problems and would continue to do so.

13) In long term investing, it is not effort that counts, it is patience.

14) In a country like India, we can make good wealth if we can start thinking in terms of decades as holding period. It doesn’t require a great brain but an excellent temperament.

15) No doubt that there are many roads to reach destination. But better to choose a good and less accident prone road.

16) You’re ready for long term investing only when you’re able to accept underperformance or even negative performance for few years at a stretch.

17) The biggest challenge for many is the initial capital. Living well below one’s means is generally a good habit, but must for beginners who want to get wealthy through investing.

18) If I’m not able to earn the returns I aspire for, I would not increase the risk. Instead I would reduce my expectations.

19) Without some amount of failure, difficult to get a grip on investing. It is better to fail early as you would still have time to catch up and it would also cost less.

20) Many of us would live long. If we can even do slightly better than average, it would be huge over a long period of time. No need to chase quick returns and end blowing up.

21) In every bull market, there are investors who chase fads and quick money. To paraphrase Buffett; each bull market teaches new investors some very old lessons.

22) Even a horrible investment strategy may work in bull markets. It is difficult to keep the money we make in the absence of a good investment strategy.

23) Patience, simplicity and prudence: old fashioned but much needed virtues for every long term investor.

24) Even mediocre returns would create good wealth over long term if we can avoid permanent loss of capital. We underestimate the importance of not blowing up.

25) Not that you should focus on beating others. However a right temperament would ensure that you outperform most of the investors.

Posted in Tweets | 4 Comments »

Nuggets for 25th November

Posted by Muthu on November 25, 2017

Some of my recent tweets:

1)As much as we focus on gains, avoiding permanent loss of capital should be the main investment objective. We gain by not losing.

2) If you look for certainty or lack of problems, you would never get an opportunity to invest. Problems would continue to be there but so is progress.

3) Celebrating others investment success and not gloating over their misery would cure us of envy.

4) In initial phase of investing, better to lose than gain. Else it creates an impression making money is very easy. Nothing can be more dangerous than this thought.

5) Foolish decisions can take us back even by a decade in terms of wealth. Avoiding wrong is more important than doing right.

6) Following discipline, developing patience and avoiding fads are really hard. But whoever said making money is easy?

7) If future looks certain and clear, it’s likely that we’re underestimating risk.

8) More patient you are and longer your time horizon, you’ll do very well as an equity investor.

9) In investing, most of the time, activity is your enemy and inactivity is your friend.

10) Those who come to markets to make quick money usually don’t last long. Be ready to grow with the businesses you own.

11) We’ll act more sensibly with our investment decisions the moment we stop bragging about our success, especially of short term.

12) You sow the seeds now for say 5 years return. Keep doing it every year. At some point, you’ll start reaping fruits regularly.

13) If we don’t want to own a company for long run, it implies we are only looking for price and not business performance.

14) Not knowing how to make money in the short term is a blessing. Sustainable wealth is usually built only over the long term.

15) In bull markets, even bad ideas can result in gains. But what is obtained through one bad idea is given back through another.

16) In investing, it is not the effort that counts. It is patience.

17) For all long term investors, patience equals profit.

18) Long term investing needs tremendous discipline especially when you hear about people making quick short term profits.

19) Learn the art of money management. If you do that, you’ve to get rich only once and can stay rich. If not, even if you get rich, you cannot stay rich.

20) You don’t get what you want from the markets. You get what you deserve.

21) If patience and long term orientation comes naturally, you are indeed blessed. From what I see and read, these are very rare traits.

22) You randomly check with some investors how long they plan to own a stock or a fund. You would then realise how rare is holding something for a decade or two.

23) Our family and our clients invest with an intention to hold for 10 years or more. We’re a rare tribe and feel proud of the same.

24) Many a time, risk is not in the markets but in our behaviour.

25) Stock price is the shadow of business. It always follows business. Focus on the business; price would automatically be taken care off.

Posted in Tweets | Leave a Comment »

Nuggets for 7th November

Posted by Muthu on November 7, 2017

Some of my recent tweets:

1)We’ve no ability to avoid down markets. We stay invested through both ups and downs with conviction that equity does wonders in long term.

2) It is better to be optimistic always. But many get optimistic at peaks and pessimistic at troughs. Sure way to lose money.

3) Time arbitrage is your greatest edge. When most investors focus on short term, ability to focus on long term is a huge competitive advantage.

4) Even if tempted with super normal returns, don’t abandon the approach which works for you and able to stick during both good and bad times.

5) Luck plays a major role in outcome. But better your process and discipline, greater is the chance of luck leading to good outcome.

6) Look for long term track records. Returns from short term, especially during bull markets, conveys very little about the quality of process.

7) Bad is to live from paycheck to paycheck. Worse is spending in anticipation of future paychecks.

8) Market does not determine your fate. Your behaviour does.

9) Avoiding debt is the cornerstone of wise money management.

10) Traits like delayed gratification, patience and discipline need not be inborn. They can be learnt, put into practice and made as a habit.

11) Other than regular needs, better to postpone our wants by a month and see if we are still interested. This would prevent impulsive buying.

12) Save money during your working years so that money can save you during retirement.

13) Plan in such a way that you work for money for two decades and the money works for you for rest of the life.

14) You need not make money every month or every year. This expectation leads to disaster. Buy and hold knowing that gains are always lumpy.

15) Trying to make money in short term would prevent building good wealth over long term.

16) Knowing what to avoid is very important in investing. Avoid many wrong things, do few right things and then just stay the course.

17) Avoid investments with lock-ins. Hold long because of discipline and not due to compulsion. Never give up liquidity and transparency.

18) Discipline and patience scores hands down than intelligence in investment success.

19) For some, the only investment strategy seems to be making money faster from stocks. This is unviable and would lead to ruin.

20) Whether it is career, wealth or health, thinking long term and avoiding instant gratification is the key to success.

21) Businesses which take long term decisions even if it means short term pain deliver greater wealth to shareholders.

22) How much ever you develop knowledge, there would be many better than you. If you develop emotional balance, there is very less competition.

23) Overreaching for returns many a time ends in wealth destruction instead of creation. Instead of quick, focus on sustainable wealth creation.

24) Don’t look only at returns, especially short term. Look at the quality of process. Long term outcomes are primarily determined by process quality.

25) Mutual funds are best option for those who want to harness the power of equity but may lack time or expertise in stock picking.

Posted in Tweets | Leave a Comment »

Nuggets for October 22’nd

Posted by Muthu on October 22, 2017

Some of my recent tweets:

1)Instead of chasing new ideas, buying more of what we own is often the best thing to do.

2) Forget alpha, those who keep timing the markets would not even make index returns.

3) Would keep saying same things with different words. There is nothing new. Good advice is always repetitive and boring but invaluable.

4) You win by not losing. If you can avoid permanent loss of capital and earn moderate returns over long run, you’re surely a winner.

5) In investing, compounding creates wealth. In borrowing, compounding destroys wealth.

6) Don’t go for shopping to kill boredom. You’ll kill both boredom and seeds of future wealth. Start reading. It’s inexpensive and rewarding.

7) While you build wealth, learn to manage it as well. Ignorance and money rarely stay together.

8) Money does not buy happiness. True. But does poverty buy happiness? Money gives freedom. Up to us to be happy or miserable.

9) In investing, discipline wins handsomely over smartness.

10) Average IQ coupled with above average discipline is the recipe for success in investing.

11) Living below means is not being frugal or miserly. It is the right balance between consumption and savings.

12) What is worse than getting into debt? Signing surety for someone else’s debt.

13) Investing is like planting a tree. Both take times to blossom, except some activities need to be left alone to grow & would nourish generations.

14) Keeping things longer is one way to reduce expenses. For example, there is no need to change phone for every new version.

15) Possessions provide a false sense of superiority. Be really superior by achieving financial independence.

16) Don’t go by titles secrets of millionaires or how to attract wealth. Many have made it old fashioned way, high savings & living below means.

17) In a country like ours, where many lead a hand to mouth existence, ability to save is a privilege. Don’t let go of this opportunity.

18) If you Google and see past predictions, you’ll not take any current predictions seriously. Predictions grab headlines. Nothing more.

19) As much we focus on term or medical cover, need to have career insurance as well. Investing in knowledge and skill is the best career insurance.

20) We always stay the course not being carried away either by exuberance or gloom. This trait has been very rewarding.

21) In investing, what you don’t do and avoid is more important than what you do.

22) Without high savings and investing it regularly in equity during accumulation phase, financial freedom would remain a pipe dream.

23) Availability of fast and easy credit leads to poor choices. Buying through cash leads to better choices. One more reason to avoid debt.

24) Great investors speak to us through their books, blogs, tweets and interviews. What a great time we live in with access to them.

25) We find lot of news and information either irrelevant or toxic. Unless you’ve right filters, would be better off by consuming less of these.

Posted in Tweets | 2 Comments »