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

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Archive for the ‘Tweets’ Category

Nuggets for October 14th

Posted by Muthu on October 14, 2017

Some of my recent tweets:

1) Investing span is getting longer due to increasing life span. Make best use of time rather than chasing high risk returns.

2) Those who try to get rich quickly gets aggressive, use leverage, chase fads and end up poor. Enjoy the investing process & get rich slowly.

3) We see only returns and not how much risk has been taken to achieve it. Sadly for many, end justifies the means.

4) You need not be rich to enjoy small pleasures of life. Don’t try to compress the natural course to get rich fast.

5) Pareto principle is applicable for markets as well. 80% of returns come in 20% of time. Always stay invested as you cannot time the 20%

6) Getting rich is difficult. Staying rich is extremely difficult. You can get rich by even luck. But staying rich needs skill, knowledge and right behaviour.

7) To save more, you need to either earn more or spend less. If you can do both, you’re on the fast lane to wealth.

8) Instant gratification destroys wealth. Delayed gratification builds wealth. Instead of borrow and buy, aim for save and buy.

9) Our approach is if we cannot pay cash and buy something it means we cannot afford it. Why buy unaffordable stuff through debt?

10) Suggestion to buy next multibagger is exciting. Suggestion to change behaviour is boring. Boring is effective and long lasting.

11) If patience and right temperament is easy, everyone would get rich from markets. Difficult to practice but richly rewarding.

12) We consider debt as a luxury instead of slavery. The biggest luxury is living within means and not to have to answer lenders.

13) It’s a sign of rich to prefer complex structured products. In reality, simple products are best for everyone regardless of net worth.

14) Be alert when you come across terms like structured, linked & alternative asset. Can lead your financial life very well without owning them.

15) Many say they would start saving when their income grows. If you don’t save when income is small, you’re unlikely to save when income grows.

16) If you’re not a good investor, choosing good investments is of little use. Get behaviour right, everything else automatically follows.

17) Of all the good traits, patience is the most critical and invaluable one. This is the biggest edge an investor can have.

18) The best way to use credit card is to make full payment every month. The worst way to use is paying only minimum balance.

19) Not only its employees, as borrowers, we all work for the banks for most part of our career.

20) Growth happens over years. Why measure performance by everyday price movement?

21) Some people get rich quickly. They are exceptions than the rule. It takes not less than 2 decades of work to build wealth.

22) If you can save and invest 30% of your income every month for two decades, you’re most likely to become financially independent.

23) Impulsive buying is the enemy of high savings. Give a month gap between buying decision & execution. Time is the antidote for impulsiveness.

24) Sticking to the investment discipline in bad times differentiates between an average and a good investor.

25) High savings would ensure that you work for money for two decades and for the remaining four decades money works for you.

Posted in Tweets | Leave a Comment »

Nuggets for October 7th

Posted by Muthu on October 7, 2017

Some of my recent tweets:

1)In hindsight, we always feel bear markets were good time for accumulation. Then why we should fear them in future?

2) In bear markets, we think bull market would never come. In bull markets, we think it would last forever. Cycle prevails.

3) See the difference in economic narrative by media this week than last. We need to focus only on bigger picture and not sway with news flows.

4) Don’t seek excitement and thrill from investing. You’ll get what you seek but would not create any meaningful wealth.

5) If you want to be a better investor, there is no substitute for lifelong learning. Things evolve and you need to evolve along with it.

6) Resisting change may work only in short term and would be disastrous over long term. Be willing to learn and evolve.

7) The moment you think the knowledge you’ve today is perfect, learning stops.

8) Knowledge is freely available in abundance. Learning cost only time not even money. Investing in learning is as important as investing money.

9) If you can read and learn, you’ll never be short of investment ideas. Ideas are unlimited. Only capital to invest is limited.

10) You hold the keys to your financial heaven. They are high savings, continuous learning and right behaviour.

11) Many advisors focus too much on asset allocation in accumulation phase. Overweight on equity helps provided you can stomach sharp drawdowns.

12) Advisors should not go by text book rules. Need to develop independent view after taking into account clients life and financial situation.

13) You’ll make big money if you don’t go behind quick money. Would rate patience as the highest virtue in investing.

14) Where we constantly fail is losing our patience and swaying to the noise. Taking care of these two alone would improve our odds of success.

15) As much as savings, investing in oneself is equally important. Without human capital, creation of financial capital is very difficult.

16) Remember that long term view should not be changed based on short term news.

17) Saving more & giving time for investments to grow is realistic. Looking for ways to earn high return in short period of time is unrealistic.

18) No magic formula exists. Save more, take a long term view, give time to compound and have patience. This is the workable formula.

19) Borrower is a financial slave to lender. Avoid debt. Avoid slavery.

20) There has always been something to worry about. Despite this, growth and everyday life continues to happen. Focus on broader picture.

21) Debt increases the cost of ownership of depreciating assets. Income is uncertain. EMIs are certain.

22) When you borrow to buy, you own the depreciating asset and the lender owns you.

23) At best we may influence few thousands or only few hundreds. In debt and investment behaviour, people will continue to be what they are.

24) Difficult to predict future inflation, interest rate & returns. Even best plans can go wrong. Saving more is hedge against this uncertainty.

25) In markets, there are more pessimists than optimists. Optimism backed by right behaviour is worth its weight in gold.

Posted in Tweets | Leave a Comment »

Nuggets for October 2’nd

Posted by Muthu on October 2, 2017

Some of my recent tweets:

1)If you are not leveraged, corrections or falls or even bear markets is not a cause of worry. Permanent capital is always safe.

2) In hindsight, we realise our knowledge in the past was imperfect. Same holds good for today’s knowledge. That’s why learning is continuous.

3) How we react during times of panic and negativity decides our investing fate. Failures and successes are usually made in bear markets.

4) You don’t need new ideas to keep performing well. Existing portfolio itself may be good enough for coming years. Just keep topping up.

5) As the saying goes, nobody ever went broke booking profit. But big wealth is made only by letting the winners run for many years.

6) Most of the time staying the course and doing nothing is the best thing to do. It is simple but extremely rewarding.

7) We tend to focus only on high rate of return. But time can deliver big wealth even at moderate rate of return. Focus more on time than rate.

8) Allocation matters. If you want life changing wealth, need to be overweight on equity. But also be ready for 30% drawdown anytime.

9) Accepting volatility is the price you pay for building long term wealth. If volatility troubles you, scale down your ambition. You can’t have both.

10) We focus too much on ideation. Ideas are like commodity. Available in plenty. It’s execution and staying the course which is a rarity.

11) Quotational losses are not permanent ones unless you sell due to panic. So you need to fear the fear and not temporary declines.

12) The quality of advice can be validated only in bear markets and crashes. In a bull market, everyone is a long term investor.

13) As an investor, you’ve come of age, only if you can withstand the pain and stay the course in a bear market.

14) There is no one right investment strategy. But you need to follow what is right for you, both in good and bad times.

15) No strategy works always and no investor can avoid periodical under performance. Successful ones are those who stick to their style.

16) Nothing wrong in having big goals. But need to be ready to get rich slowly over time than trying to chase unsustainable returns.

17) Would you stay invested if you get negative or zero returns for next 3 years? Be aware that such phases would continue to keep happening.

18) Stocks can make you wait for many years and give many years return even in a single year.

19) In market linked products don’t look for yearly performance. Look for what happens over years.

20) Price can lag earnings and earnings can lag price. But over a period of time, they go together.

21) The first and foremost focus in investing should be avoiding permanent loss of capital.

22) Future of mutual fund industry would be low cost ETFs, passive investing, zero commission and pure advisory model.

23) Though it sounds very basic, first you’ve to believe making it big from equities is possible. Belief leads to process, behaviour & outcome.

24) Those who try and make it says it is possible. Those who never try and lack conviction says it is impossible. Conviction is the key.

25) Never underestimate the importance of savings. Money is the raw material to make more money.

Posted in Tweets | 2 Comments »

Nuggets for 28th September

Posted by Muthu on September 28, 2017

Some of my recent tweets:

1) When you a buy a stock, tell yourself loud and clear that you are buying a business.

2) Behaviour matters more than analysis and math.

3) Since performance happen in spurts you’ll let go big winners by churning for underperformance. Once you buy right, sit tight.

4) Borrowing implies spending tomorrow’s income today. Future is always uncertain and may not pan out as per plans. Remember this when you borrow.

5) Mastering emotions is very difficult. But if you can do that, you’ll definitely get rich someday. Market rewards this mastery abundantly.

6) We understand how difficult it is to stay the course. Repeated reinforcement is required to internalise the same.

7) In markets, pessimists sound very intelligent. But it is the optimists who make money.

8) Being an investor and advisor, one doesn’t feel redundant with age. This is one area where experience and wisdom from it counts a lot.

9) Highlight process not performance. A strong process can always be adhered to but it is difficult to always deliver performance.

10) Our preference for inactivity is due to understanding. When you are inactive positively, you’ll also know when to act decisively.

11) Stock markets allow us to benefit from the skills of great capital allocators. What a blessing this opportunity to participate is.

12) Not all can start or run a great business. Still markets provide us opportunity to participate in their growth and profits. Grateful.

13) But for the presence of markets, many of us would not have any other way to obtain financial independence and create wealth.

14) Though very basic, at the time of big falls, I tell myself the price has changed but not value. The business is running as usual.

15) Wealth built through following an investment strategy and process is more sustainable than ad hoc investing.

16) You may even get rich by chasing fads and returns. But it is very difficult to stay rich if not backed by a sound process and strategy.

17) Simple investment discipline would beat sophisticated models over long run. We keep forgetting that simple wins over complex in investing.

18) In tough times, we tend to think good times never come and in good times, we tend to think it would last forever.

19) In 2027, you would not even remember about a 10% correction in 2017. Understand your time horizon instead of worrying about volatility.

20) You need not worry about bear markets or corrections if you’ve no plans to sell.

21) There is never a time where we’ve perfect information and the future is clear. Investing needs a leap of faith.

22) Even if journey is long, it would be less accident prone and relatively safe. Get rich slowly through quality businesses.

23) ‘Safety first’ is equally applicable to investing. Avoid junk and chor companies. Usually when they fall, they fall forever.

24) We know 10% corrections are very normal & almost happen every year. Still whenever it happens, we always panic. Strange investor psyche.

25) 10% correction once a year, 20% fall once in few years and 30% fall once a decade is very normal. Don’t panic. This is how markets work.

Posted in Tweets | 2 Comments »

Nuggets for 20th September

Posted by Muthu on September 20, 2017

Some of my recent tweets:

1) Bonds are for storing wealth and equities are for creation of wealth.

2) In my opinion, the biggest asset one can have is zero debt.

3) The greatest discipline in personal finance is living below your means.

4) As Ben Carlson says, emotions cannot be back tested. That’s why past bear market always looks like opportunities and future ones scary.

5) Early financial independence and early retirement are completely different. To me, the former is a blessing and the latter is a curse.

6) Don’t think how it would have been if you’ve started 10 years ago. Start today and visualise how you would feel 10 years from now.

7) The neighbourhood we live determines our life style & spending. Need to be careful in choosing one which matches our goals and personality.

8) Paying minimum balance regularly on credit card is the maximum sign that you’re getting into debt trap.

9) Many are long term investors till next bear market.

10) Don’t take aggressive bets. Take measured risk. Remember one blunder can push you back by a decade or more in terms of wealth.

11) Big money can be made through high savings, wise investing and lots of patience.

12) One sign of progress in individual investor’s portfolio is no churn or very less churn.

13) Trying to get rich fast is a foolproof way to lose what we have.

14) Losing opportunities is far better than losing money. Don’t invest in fads.

15) “Making as much money as quickly as possible” is not an investment strategy. Unfortunately for most of us that is the strategy.

16) Aggressive strategy cannot be a substitute for high savings. Save high and take moderate risk than saving less and taking high risk.

17) The day we realise not losing is as important as winning; we would stop blindly chasing returns.

18) Good periods are more than bad periods. By not timing, though we go through bad periods, do not miss even a single good period.

19) We’ll stop looking for quick money the moment we consider stocks as businesses and realise that our wealth grows in line with business growth.

20) There are periods of high returns, low returns, no returns and negative returns. We need to go through all these to get long term returns.

21) Listening to market forecasts is not only useless but can be very harmful too; if you start acting on them.

22) The hard truth is only around 3% of our population are in a position to aspire for financial independence. Don’t waste this rare privilege.

Posted in Tweets | 2 Comments »