Investing Nuggets - Drop your best investing strategies in this thread!

[yashmifromvested]

Here’s an interesting one by @lammergeier - Let's talk diversification! - #8 by lammergeier

@lammergeier

a person can track 10-20 stocks at max in their portfolio. (the right balance is 8-12 stocks)

Considering, one should keep 8-12 stocks, the thought process is about

• having Top 2 stocks of growth/stable sectors
• or Top1 stock of each sector

the idea then is to rotate sector wise and price action wise (QoQ/half yearly/yearly basis).

If someone is finding this vague, one should look on the top stocks of each sector, then cross check with:

• its ROCE, P/E, current market price, 52 week ATH,
• company debt free or how near is it to be debt free? Is the debt reducing?
• how does the P&L look like in balance sheet? growing qoq?
• is 20dma crossing over 50/200 dma?
• other indicators (RSI/ADX/SMA/Volumes/VIX)

If this is too much then, as my other friends do - they pick the best stocks at their low, hatch it/sit over it like a for 2-4 quarters and sell it (if in profits) around the quarters mentioned here in the chart : The 3 best months for the Stock Market? - #2 by lammergeier

#InvestingNugget

What’s your strategy? How do you go about it? What are the metrics you track?

[yashmifromvested]

Some interesting points from @RandhawaIP -

@RandhawaIP

My investment strategy focuses on:

1. Market Cap. Don’t chase anything less than 100 Bil.
2. Volume. Gotta be at least 6 figures. Only if a lot of people are buying the stock am I interested, not otherwise. Low volume is indicative of absence of institutional (Hedge Fund) buyers, so why bother?
3. More than a cursory glance at the key stats.
4. Performance numbers for 1yr or more.

@RandhawaIP

Having traded in the NSE since 2016 and the US since 2020, with varying degrees of success, I finally came to the conclusion that, in the short term, stocks and markets make no sense at all. The price is just a lot of noise. It’s like a global virtual casino where, since there’s no ‘House’, the hedge funds and experienced traders mostly, not always, win. We must be aware that when you put in an online bid for a stock, it is intercepted by the said traders bots which then put in a bid before you which is detrimental to your buy or sell price.

…

@RandhawaIP

I like the safety of buying stock in the biggest or most promising companies in the world, mostly US, China and Europe and accumulating after a retracement of at least 10% and just holding it for a long time, like a house or flat, as an asset. Statistics show that equity outperforms the other asset classes significantly in the long term. Currently my long term Portfolio consists of two stocks each in the US, China and Europe. Happy investing.

[yashmifromvested]

@Rishabh’s investing strategy:

@Rishabh

Considering, I have an edge on technology and knack for discovering great products, thanks to my professional background, I have focused my investing thesis on disruptive innovation.

My investing thesis is taking a few concentrated long term bets (5-7 years minimum) on the most disruptive growth companies that are riding the cost curve to create mass adoption while delivering world class products to consumers and have a competitive MOAT to keep delivering long term value and growth. In short discovering the next Apple, Amazon and Google. I spend a lot of time in researching companies and rely on other investor communities on YouTube and Reddit to discuss investment thesis.

[lammergeier]

Investing strategy needs to have a #hedging strategy as well,
while for stocks it is mid/large cap stable (daily need related) companies, ETFs/Moats - we should do small amount of SIP with these instruments/stocks.

[alexsunny123]

thanks for the awesome information.