hi, i have read that if we select the best stock by doing fundamental analysis and hold it for nearly 25 years, then it can give 1000 times returns and make us millionaire than doing intraday. i know about fundamental analysis but is it possible to know in advance which stock in future is likely to give bonus shares and stock split and give dividends for generating multiple returns. please help.
You are reading, nice thing. You know fundamental analysis, v.nice because FA is very vast and important term.
If you are father of son than what you do initially ! You give him Money for his study till he wanted. You are not think about the result at that time ! may be someone settled at the age of 25 or 28 or more than 30. someone may have ability to perform great at the age of 20. Stock market is the same. You are father of the stock/s, rest you know what happen. Important is you choose right son/stock. that is why knowing fundamental analysis is v.nice thing.
But market have some Risk factor, you can not neglect it. Rigidity may not work.
refer link for news like result and more… https://www.nseindia.com/corporates/corporateHome.html?id=allAnnouncements
It is not possible to know before hand which stocks will outperform. However, you can make an intelligent guess on which are the companies likely to outperform. For this, you need to slice and dice the company both from a quantitative and qualitative perspective.
Have a look at this module on FA, which will help you understand this better - http://zerodha.com/varsity/module/fundamental-analysis/
Figuring out the multibagger stock in its earliest stage depends upon your understanding of its core business model. What product/service that company provides and what will be the future prospect of that product/service. Will Indian market embrace that product/service? What are the competitive advantages?
And most important how qualified their management team is.Remember its the management team who takes all the decision and projects their earnings in upward trajectory path.Now tell me who could have figured out that Page Industries will be so successful in its early stage. Page Industries success lies behind its visionary leader Genomal Verhomal. Try to figure out the companies which have great vision as well as products/services may become huge success in Indian or foreign markets.
This post has been written by Morgan Housel of The Collaborative Fund and initially appeared on its website.
In his book Succeeding, John Reed wrote one of the smartest things I’ve ever read:
When you first start to study a field, it seems like you have to memorize a zillion things. You don’t. What you need is to identify the core principles – generally three to twelve of them – that govern the field. The million things you thought you had to memorize are simply various combinations of the core principles.
This extends beyond those learning a new field. I think it’s most relevant for those who consider themselves experts. The root of a lot of professional error is ignoring simple ideas that seem too basic for those with experience to pay attention to.
Having seen the investing world from several different angles, four skills stand out as governing most of outcomes.
The ability to distinguish “temporarily out of favour” from “wrong.”
The two strongest forces in investing are “This investment looks broken because that’s how opportunity presents itself” and “This investment looks broken because it’s actually broken.” It’s hard to tell the difference in real time. Distinguishing between the two relies on accurately calculating the odds that something will eventually come along to heal or promote the market or company that looks broken. And since those odds are always less than 100%, it can take a while to tell if you’re any good at it, because even when the odds are in your favor the outcome can go the wrong way. It’s hard to do. But worse, and more common, is forgetting that a distinction needs to be made in the first place.
The willingness to adapt views you wish were permanent.
Economies grow because businesses, consumers, and technology change and adapt. It’s ironic how many investors attempt to ride this wave of change with rigid beliefs. There are a set of truly timeless investing ideas. But most of what guides us are beliefs that reflect what we’ve happened to experience in the narrow view of our own lives. Even when investors study history, they put more weight on stories that align with their own experiences, because those stories are easier to understand and confirm their beliefs. It’s painful to contemplate, but a lot of what all of us believe about investing is either right but temporary, or wrong but convincing. If you’re unwilling to update your views when the world changes, or be open-minded enough to realize that some of your views were anecdotal to begin with, boy, you will be eaten alive in this field.
The ability to be comfortable being miserable.
This is the most fundamental of all investment principles. You can’t enjoy the benefits of exercise without some sort of discomfort, because being out of breath, sore, or tired is the sign that you’ve put in enough effort to deserve a reward. Same in investing. The financial rewards for being comfortable as an investor are the same as the physical rewards for sitting on the couch.
Returns do not come for free. They demand a price, and they accept payment in uncertainty, confusion, short-term loss, surprise, nonsense, stretches of boredom, regret, anxiety, and fear. Most markets are efficient enough to not offer any coupons. You have to pay the bill.
There are four psychological states of investing, in order of lucrativeness:
Miserable but confident in its eventual rewards.
Miserable and giving up.
Comfortable and accepting of its future downside.
Comfortable and oblivious of what’s to come.
Some are better at coping than others, but that’s the complete list.
The ability to distinguish when analytics vs. psychology is necessary.
If investing were only about numbers, no one would be good at it, because computers would arbitrage away all opportunities. And if it were only about psychology, no one would be good at it, because every investor has different, arbitrary, goals and markets would never coalesce around something objective.
Good investing is some part analytical and some part psychological. An Art and a Science. The trick is knowing when which skill is necessary, and how one affects the other.
Parts of investing are counterintuitive – like the prevalence of volatility, margin analysis, or moats repelling competition – and require data to understand. But there are things data can’t help with, like the tendency to embrace false narratives that justify your actions, or your willingness to throw your strategy out the window after the emotions of a big win or loss. Data doesn’t teach you about fear or patience, and psychology doesn’t teach you about discount rates and EBITDA.
The hard part is that analytics and psychology couldn’t be more different. One is rational and stable, the other makes no sense and changes all the time. One is numbers you can see, the other is emotions you can sort of feel, sometimes. Attacking a problem with two different skills is hard. But attacking a problem with two conflicting skills can make you question what you’re doing. And even harder is the frustration that comes from attacking an analytical problem with psychology, or vice versa.