Insanely Practical

One in three main thing that can be used to evaluate a company whether to invest or to learn is to analyse it's cash flow statement. It is equally important as reviewing the balance sheet and p&l statement. Everyone keenly focus on the numbers in these colomns before investing. Everyone should if he is to invest. But cash flow, they mostly give less importance. One reason is that they just need to know whether it is positive or negative. If it is positive, good. Negative, then need to analyze further more deeply. We can get a sense of the operational and financial activities from cash flow statements. And by combining our findings from here to over-all findings will lead to a good sense of this company.

Expecting return a way more than the index average can be of greed influence. Index do gives a handsome return that sometimes even surpasses majority of the stock performance. But it is also true that index may stands still for some years. Yet in the very long it is way better than FDs.

Investing is more of a common sense than intelligence. An investor with high IQ and low EQ is not intelligent at all. In the contrary world on intelligence is considered as a measured value of IQ, but in the investing world it plays little role. Sure a person with high IQ can calculate the risk and rewards, the sectorial cage growth or even can find his own formula to find multibagger. But if he is fragile on patience and discipline, he won't be the intelligent investor. Investing is a fun process until we see a major loss. When confronted with such situations, we forget everything and the primitive brain of flight or fight gets activated. So most investors sell their holding along with the masses instead of buying more at the discounted price. They know the market is gonna revive sooner and stronger, but they won't listen to their logical mind and keep their selling activity on. Here the fear surmounts every knowledge and experience. So it is important to be an intelligent inv

Pledging of share can sometimes be seen as a positive thing. By pledging we can earn an extra money using the leverage that is available from the money invested without losing the money. This is great only when we are sure about the possible outcome regardless of its nature can be endurable.

Industries that is gonna thrive for the time ahead is what is in demand the most. Now demand is for those which makes our life easier and better. With better technology and place we can live a pretty decent life. So to build a new portfolio next year, we should look into EVs, green energy and tech spaces. Because these would definitely turns out to be the game changer.

The common two types of benefits by doing fundamental analysis is that you can make money and you can become wise. People while mentioning about making money they often inscribe the situation as out of control. Their financial is like not their job to manage. And finally they end up in financial trouble. By actually studying a company fundamentally, we make make better choices for better return. And even if we fail, we can take those failures as an oppertunity to understand the process of investment better. Second as like I said about becoming wise. There is no scarcity for any scam. People do want to make money. Some people cares about the ethic while others don't. This happens everywhere. When it comes to investment, we can see some people offering tips about picking the right choice of stocks and that often turns out to be bullshit. By learning it by ourselves we can actually become wise at choosing the right industry for right kind of investment.

There is nothing insaner than investing without knowing the basic fundamentals of a company. A company should be subjected to study before investing. People those who invests based on news and tips often get in trouble and finally concludes that stock market is a gambling. This is wrong and stupid. But with internet we can make better decision to win the stock market. And guess what? Everything that you need to become a successful investor are freely available in the web.

We should create a checklist that matches our profile for our investment. Investing without checklist is like going to a tourist place without a map. Checklist guide us through good investment by backing with a good decision.

 A retail investor, he must know the different phases of investment that companies undergo. Not each and every, but almost all companies. The first ones are from the founders. They muster their hard-earned money or money in exchange for some obligation to build the company. Actually, this is the initial investment and the best part is they can take as much as share they want. If it is founded by a single, he owns every share at the initial stage. But as the company grows, like any other company, it requires money for its future growth. So what the founders and chiefs of the company do this time is that they go to an Angel. Angel investors are the second-term investors backed up by their own money. This looks closely to each and every corner of the business and after a lot of obscure examination, they either accept or neglect the offer. If they’re to invest, they will do so by pledging share in return. Since the company is still at its initial stage, the ‘angels’ will get a large numbe

Any investment we do must be fro our own analysis and study. In the financial market, we see people investing in stocks and bonds based on what they hear form their friends and colleagues. They say "it may give good returns". If we want to invest and don't know how to do oit, then most probably the chances would results in we slaying towards the tips and news. The good part about tips and news is that its role as an educator. We can look into the specific financial advice and draw our own conclusions based on our analysis. Investing based on pure news and tips is a disaster. It may give handful of returns in the short term, but in the long term it is dangerous.

An investor should look at the team more rightly than the idea. Idea is important. A good novel idea that can engage people to talk about it travels like a virus. Those ide virusee may get global recognition. But without a good team, it won't sustain further. The same idea might get cloned by some other inspired teams.  A good teams is an inspired team. They are inspired by the impact it is gonna deliver. They will work towards making the world a better place ( a cliche for a good idea). That is why investors closely monitor the team and the founders. They analyse their work, their ethics, their past and their perception. Whether they have skillss and talent is considered less important than attitude and vision. Even a mediocre idea with a good team can return multiple time ROI.

Learn to earn is a very powerful way to express the need of financial knowledge. Everyone dreams of becoming financially independent, yet majority learns nothing about finance. They can learn at least personal finance management. Financial world is a never ending way. There are millions of things to learn about. But people don't even know the very basics of finance and they struggle their entire lives to make more money. They don't know how to make their money grow even when they are sleeping. There are multiple ways to do that. We can easily spot a financially educated and the other by simply observing their life. One always stays in debt and other in profit.

Cutting down the expenses is one of the way to increase revenue. Some companies perform better from last year due to increased number of product sales and services extended. This surely get reflected in the financial statements issued. Therefore more revenue can be generated without cutting the unwanted expenses. Even for companies with solid management teams, cutting expenses are really hard as it requires a total makeover. But some times it makes sense to do so.

Starting the investment journey as early as possible can make you wealthy. Investing any time is good, but during the process, we will go through a lot of learning processes which is inevitable. Warren Buffet once said that investing is the process of moving wealth from an impatient investor to a patient one. This is very much true especially we're dealing with money growth in the midst of  get rich quick segment. Without patience, wealth creation is almost impossible because we jump from one plus to another before reaching the destination.

Market always makes some corrections during its journey. For a short term investor, it is the stage where he books profits. And many times they misplace their trade loosing money. But for an investor with long term view, it is just a other minor dip that is to be ignored. Dip are obvious and it happens to everything in progress. It is a universal law that states anything going forward must go through dips. Or we fan see dips as a form of test. For every improvement we make, we must test it whether we are really improves or not. Dips makes us go through it. In investing it is a mental test. Patience is a prime factor for a good investment. While in a dip, when we see other prices moving high making frequent all time highs, we tend to withdraw our price and veer it to other one. In this test we failed to sustain the promise. So dip is a very good thing which makes us to learn things faster and better.

Diversifying your portfolio is the best way to sustain in the market. When one goes down, other tops. But make sure that everything you invested was invested based on your knowledge.

Investing is not just about buying at the dip and selling at the news. There are lot of things in between. One of the primary thing that investing requires is patience. The patience to wait for the returns we saw when we did the analysis. Many people buy stocks based on tips and what they hear in the news. These people become fragile at the investment journey. They move their portfolio multiple times to get the returns that their mind eluded. Without a proper research and study we don’t know how and when we gonna get the return we expected. Some people make their investment based on their study and understanding of the market. They spent weeks and months learning about the field and companies before investing. The advantage here is that they know exactly how the price behaves to a greater extent. They know when to expect the return they hope for. What it does is that it filters the confusion. If the price crawls as hell, they must have know it and they keep their patience on hold. Ho

 Financial ratios are great when it comes to investment. These ratios are useful in calculating several attributes of an investor. We know that most people with an investor's eye look for return than value. Because money is luring.  While investing, it is advised to take a look at the asset through the different financial spectrum. We can't track the everyday activities of the companies. Some companies make a lot of money with little expense and others make losses from it. Even the performance of management decides the performance of the company. We cannot analyze each of these. But with the help of financial ratios, we can arrive at a solid conclusion for an investment.  Here number defines a lot of things than the words of the management team. They can fake you with fake words, but the number says everything.

Buying at the dip is one of the proven strategy that many people use to buy assets. The reason they do this is because they can see profit right from there. When they see profit at the very initial stages of investment, they will invest more. 

 The best way to avoid a common sense trap is by changing the time frame. Once we learn to do the correct time frame chart, we could easily see that things are not as much as complicated as it is depicted in the short frames than the larger ones.