Sunday, July 18, 2021

Acting on Stock Recommendations

Stock recommendations are big business. And they are a big addictive pastime. Everyone is always eager to know the "latest stock tip" – nothing wrong with this, it is human nature to want to hear the latest gossip and sundry assorted information of a risqué nature. Stocks may not fit the classical definition of risqué but if you think about it, money is as much of a turn-on as sex is, if not more.


The thing about recommending stocks is, there is an underlying base of theory and knowledge which you need to know, but you never know which pieces of that knowledge are relevant at any point in time. Should I look at growth? Or value? Or momentum? At macro factors, industry factors, or company factors? At long-term or short-term? At buy-and-hold strategies, or quick turnover? How long is long term? Define quick?


So, everyone develops their own theories of stock picking. And they come up with different and varying recommendations. Gather a few people tracking stocks in a room and ask them for their top three picks. It is unlikely that you will find any matches. In case there is an almost uniform consensus that a certain stock is good, then that is precisely the stock one must avoid.


And, everyone will tell you when to buy. Very few people will tell you when to sell.


Also, most stock picking services "include" a particular stock into their buy list, and it stays there till "exit" is announced. AT any point in time there may be fifty stocks in the buy list, all included at various points in time. But this does not help the buyer. As a buyer, at this point in time, I have x amount of money, and I want to deploy it. In which stocks should I deploy it? That is what I am most bothered about. Looking at a list of stocks which have been recommended at various points in time, at various (lower) prices, and looking at how the prices have run up now, and looking at a list of fifty options, is hardly conducive to decision making.


So any stock picking advice needs to be specific. Ideally, if I could predict the future, I would recommend just that one stock that will go up in the next one week. But alas, that is not possible. Or, I could recommend a basket of fifty stocks, and ask you to spread your investment – however, the more one expands the list, the more one is reverting to the mean. Reversion to the mean is not the objective here, the objective is to beat the mean by a wide margin.


The objective is also to have an absolute return that is acceptable. It is not of great comfort to me, when I have suffered a twenty percent loss, to be told that I am doing well since the index has in the same period gone down by thirty percent.


Also, there has to be a commitment from the one who recommends the stocks to also trigger off a sell call.


In my fortnightly stock advisory, I try to be specific, and actionable. Typically, I recommend a list of ten or twelve stocks, with a box for entering how much money you want to invest. The model then throws up precise recommendations of how much to buy, and of which stock. I also track all my buy recommendations and advise when to sell. Between "buy" and "sell" there are periods of "hold" when a stock is not a buy, but not a sell either.


Whether I am doing well or not, only time will tell. A few months is a very short time to judge, but I seem to have started on the right note, with quite a few wins. Once a couple of years passes, and we know how much money we made (or lost) , we can pass judgement.


It is not just about the money. The money is simply a yardstick. The excitement of the game, and outsmarting the market is the real motivator.

Thursday, July 15, 2021

Ghalib for today's times

Ghalib, seeing what is happening in the past one year, might say: 

साल भर लोग यही भूल करते रहे
कमज़ोरी अपने आप मे  थी और वो  लोगों से भागते रहे

-  - - 

लोग-ए-नादाँ तुम्हे हुआ क्या है?
आख़िर इस डर की दवा क्या है?

-  - - 

मैं भी मूंह में मास्क ढकता  हूँ
काश पूछो कि मुद्दा क्या है?

- - - 

Maut ka ek din moiyyan hai,

Toh neend kyu raat bhar nahi aati

( This one is as is, no modification )

-  -  -

Kaid se khugar hua insaan to mit jata hai kaid,

Kaidkhana mein itna raha  ki aasan ho gaya.

- - -

Humko ma'aloom hai social distancing ki haqeeqat lekin,

Dil ke khush rakhne ko, 'Ghalib' ye khayaal achcha hai.

- - - 

With apologies to Ghalib who may be turning in his grave 😎

( Posted to my blog:

Monday, July 12, 2021


News item today: Zomato is readying for its IPO, at a valuation that exceeds that of all the listed hotel companies taken together!

Beauty lies solely  in the eye,
Of the stricken beholders,
Lining up, drooling, to buy,
Inflated pieces of paper!

It has already changed hands,
At dubious values in the past,
Getting pumped up each time,
To values, till then, unheard of!

The company excels at burning,
Whatever the investors put,
Seeing the smoke from the chimney,
Makes more of them come hurrying!

Not an asset to its name,
A few youngsters in a garage,
Have soon managed to overtake,
Those who've been around for years!

Each one aims to dominate,
The world as viewed from their prism,
Doing whatever it takes,
To spend their money to success!

What happened to values like thrift,
And patient accumulation?
How long before you deserve it,
Does fortune visit you out of turn?

What happened to values of prudence,
And not throwing money away,
These VC's scatter it in the wind,
Hoping that some of it will land!

What happens to all that I can see,
Brick and mortar  built on sand,
That now shifts beneath their feet,
Will it all come crashing down?

A new world order will rise,
From the rubble of the old,
The rulers of today will die,
And upstarts will storm the hold!

Their turn in turn will come in time,
To go under the wheel of fortune,
Which will crush them as it grinds,
Its way relentlessly on!

Sunday, July 11, 2021

Profiting from Unease

Health for all is never the goal,
There is no money in wellness,
If health and happiness became  real,
T'would be death to many a business!

The death dealers band together,
Promise to give us a better life,
We queue up to buy their poisons,
In panic, and pathetic hope!

Leading ourselves  from pillar to post,
In a state of dread and vain hope,
In abject surrender fearing more,
We pleadingly dance to their script!

The music is orchestrated,
To keep increasing the tempo,
Till we completely lose ourselves,
Into the script written by them!

Wednesday, July 7, 2021


They who rush to play victim,
And decry their plight in life,
Are not truly as they seem,
'Tis just a game, that's Trump!

The Devil changes clothes,
Oppressor to oppressed,
Cries murder most foul,
Though he's wielding the knife!

Disconcert the enemy,
Use their goodness against them,
They who show some pity,
Have it turned against them!

They who would impose laws,
That are the most unjust,
Are first to cry for justice,
Equality, and fair trial!

They who rush to convert,
To their only True Faith,
Are first to rail and rant,
That no one can convert from theirs!

Those who are not  secure,
In their own Faith and God,
Are ones who need to gather,
More to praise and exalt theirs!

They who rush to play victim,
Are often the ones who do wrong,
For it's often the Janus,
Who is also Judas!

Friday, July 2, 2021


The swamp was a putrid mess,
Of entitled detritus,
From long  privileges held,
And stuck, firmly ensconced!

A broom was needed to sweep,
The Augean stables clean,
It needed someone to wield,
In face of indignant protests!

Every age has a Messiah,
Come forth for Deliverance,
The Old gives way to the New,
Only by wreaking damage!

Nothing fades without a noise,
Silently into obscurity,
The shrieks of the dying echo,
For long after they have been killed!