My stock market –dabblings.

Over the last couple of years, I’ve been dabbling, and really just buying on impulse and random
reading online stock tips and forums. At the year-end while filing taxes and tallying up I realized(not
surprisingly, I might add) I’ve lost money(Thanks to the bull market, only little).
Which is when I realized, I’ve been half-assing the amount of research, I should do before investing
in stock market, and what’s worse, I’ve been falling prey to the fallacy ” a little knowledge is a
dangerous thing”.
So this is an attempt to hide the crime and in the process, build a system to avoid committing the
crime in the future.

Before I begin, some of the sources, I’ve been half-assing for research,(but good sources
nevertheless) are:

This is a first of a series of posts:

Most of the data, I used(and will use for the series) in the following analysis was picked up from investr(thanks to r/hapuchu,
for sharing the data), but can be picked up by crawling the webpages of companise for quarterly
and/or annual reports, and then parsing the pdf to consume them.

 

Some Caveats and Exceptions:

  • –I’m writing this around the end/last week of february.
  • — These are all stocks I traded in starting in 2nd half of 2015.
  • — I’ve done some stock investment during the 2006-2009, made some money, but due to
    bad(nah had no clue about it)
    portfolio/cashflow management, had to sell a bunch of them in 2009, which put overall
    returns negative and stopped trading, leaving whatever was left. But learnt the lesson, not to put any amount of money I’m not ok with losing into stocks.

  • — I’m working in the IT industry, and have spent some spare-time reading Finance, but
    nowhere near dedicated or focussed. (Not sure that kinda reading is good.)

  • — Most of the energy stocks are from when I decided I’ll go thematic on renewable energy
    and bought them, but lost patience/nerve when the stocks went down and eventually sold off

Direct-Equity[^1] Portfolio Opinions:

  • Way too many stocks
  • Way too disorganized and unfocused and under researched
  • Not enough Focus on long-term(think companies that’ll stay for > 100 years)
  • Balance long-term (black-swan)focus with dividend-based focus(For ex this)

Ok here’s a list of the stocks I’ve traded:

Reasoning:

  • I’ve seen the share price of this it has been hovering around 1000 for the
    10 years I’ve seen this stock, so this can be part of a stable portfolio.

Flaws:

  • This is absurd, as for all I know, the stock could have split 10 times in
    those 10 years, which means the stock has risen or merged, which means it
    has fallen. I haven’t checked it but the point is that it is a fallacy.

Outcome:

  • It has fallen a little bit, but I’m still keeping it and might even buy
    more.

  • Geometric Ltd.

Outcome:

Reasoning:

  • Not much, just that I’ve like Infy stocks in the past, and they seemed to
    be
    on a downtick

Flaws:

  • Well it’s just an impulse buy, and not better than gambling.

Outcome:

  • It has recovered and got back to trading better, but that’s just luck.

 

Reasoning:

  • Can’t even remember, where but it was some analyst rating and read

Flaws:

  • Belief in expert fallacy.

Outcome:

  • Loss. Panicked and sold at 200. It seems to be doing a little better, but
    even now it would be a loss for me to sell, however the system of
    investment was wrong.

  • HDFC Bank

Outcome:

Outcome:

Reasoning:

  • Can’t even remember, where but it was blog/reddit thread

Flaws:

  • Belief in expert fallacy.
  • Belief in crowd decision fallacy??

Outcome:

  • Up by about 20% lucky bull ride

Reasoning:

  • Analyst recommendation

Flaws:

  • belief-in-Expert-bias

Outcome:

  • Down by about 1/7th (Caveat: Down only because they had a rights issue
    that I missed)

  • Manappuram Finance

Outcome:
* Up by about 1/8th

Outcome:

Outcome:

  • Gained a bit.(can’t be bothered to track sale date and say how much)

  • Orient Green Power

Outcome:
* Lost a bit.

Outcome:
* Lost money

Outcome:
* Gain a little bit

Reasoning:

  • I’ve had good experience buying it during the IPO and making money(
  • I’ve a bias for the non-renewable sector ‘s future prospects.

Fallacy:

  • Using inductive reasoning when there’s no reason(IPO is different from regular trading)
  • Prior Bias (Ideally should have built a prediction, and accounted for non-renewable energy’s future bias I have)

Outcome:
* Lost a fair amount of money

Outcome:

Outcome:

Reasoning:

  • Building a dividend portfolio  and saw good ratings about it on investr’s magic formula
  • Bought a scooter and decided, I could buy some auto stocks

Outcome:

Reasoning:

  • I was in a automobile theme, and maruti has a big brand in India
  • Also was thinking of future plans for a car, and maruti was an automatic pick

Flaws:

  • It has a relatively higher P/E

Outcome:

Outcome:

Reasoning:

  • Was in a automobile theme,
  • Bought a TVS Scooter

Outcome:

Reasoning:

  • I wanted to pick up some in airlines(theme idea) and found that indigo has
    a high P/E so picked up spice jet(based on investr score)

  • Dabur India

Outcome:

Outcome:

Outcome:

Outcome:

Outcome:

Outcome:

Outcome:

  • Slightly up

Moral/TODO:

  • Shorten the number of stocks and focus the money into a few
  • Build a internal system for analyzing companies before invest in the future

[^1] — I might eventually broaden the scope of blog posts, but don’t expect it for a looong, loong time(count in decades)…

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