Investor Psychology 2024 | 1400 crores revenue generating company by 2019 when it comes to Graphite, wind energy as a sector related talk, this time is different. If you look at RE generated by Uma in last five years, if you see 25% cagr, if you see their profit growth, 11% Cagr growth which is also really good. For their size but if you look in terms of definitely fundamentals in this multiple it looks really attractive but how has this stock increased since its listing from ₹30 40 the stock has increased by ₹3000 in one and a half year Caplin point this stock to investors in last 10 years 85 times wealth created. But the real return in this 85 times wealth creation.
INTRODUCTION | Investor Psychology 2024
Investor Psychology 2024 | How many investors there are, you can count in thousands and let’s leave aside this stock issue, not everyone can pick a stock and not everyone can hold this much. If we want to talk about the fund, Nipon India Growth Fund has given a return of 324 times since its inception. Now this is a multi bagger return journey. Investors who have gained real wealth are again only in tens of hundreds and in fact, let’s talk about a recent example. We interviewed Sameer Raj on our channel. Sameer Raj managed Nipon India Small Cap Fund for exactly 10 years.
This fund in period has delivered 14 times return means 14 times return in 10 year period means almost every year our money has grown more than double how many investors have actually earned that much wealth whether we are in funds or stocks we actually have a 50% return.Investor Psychology 2024 | When we get 70% return 100% return we feel very happy but when will we earn these multi bag returns as a retail investor why only few people can earn this multi bagger returns why other investors above 90%
Investor Psychology 2024 | Can’t Earn Have you ever come across this question and infact I have not come across this question One of our subscribers got it He wrote this question to me What he said is that I have learned fundamental analysis very deeply and using some ratios I am identifying stocks and those stocks After identifying the problem I am facing sometimes I am not enough.
Investor Psychology 2024 | I am not able to give allocation. Stocks increase during allocation. This is why I am not able to buy stocks again and even if I give allocation in any stock, I am not able to hold that stock for long term. Here, after you buy any stock, do you ever feel that the stock will fall as soon as you buy it, or when you buy and hold it for a few years, stay in line like this without moving the stock during the holding time, hey, do you feel that this stock will not rise after I bought it, or the third thing is that you are actually a stock.
Have you ever felt that the stock went up in a rocket immediately after the exit? Why do we feel such scenarios? It is not only that we feel CR scenarios. Technically, no matter how much skill set we have built, this multi bagger has been able to earn returns only when we as an investor improve our psychology from time to time.Investor Psychology 2024 | The points to be made are how we as investors are behaving in the current market condition and how much our portfolio will be hampered by what we are doing. And we are missing how much money we could earn.
I am going to discuss these important psychological points and infact this video video is so important video that many people get very excited when they make any stock related video. When you make a stock related video you will utilize those details and further research and invest but even if you invest you will get money. What I have earned is because of videos like this. I rate it much higher than the stock related video.
Investor Psychology 2024 | Investor psychology videos are whatever we are as an investor. We can create wealth only when we build better psychology. So this is a very important video. Watch the video till the end and when you watch this video, When I cover some points in the video, you will definitely relate. When you relate, if you feel that people around us are also doing similar things, don’t forget to share them. Let me start covering each point now. If possible, try to take notes.
Investor Psychology 2024 | Whoever is one of the best value investors in the world, not only writes such books but also writes some memos regularly for free, from time to time he identifies the behaviors of investors and alerts us related to it and also related to various opportunities. If you can’t read any of these memos, all these memos are available to us for free. Now I am showing you on the screen what is his website in Ottery Capital. It seems easy to listen, even if you want to listen in audio, they are keeping these memos available in audio format for free on their website.
INVESTOR CATEGORIES 2024 | Investor Psychology 2024
Investor Psychology 2024 | These are the things that we must follow. Howard Marks divided the investors in one of his memos under two categories, one is them, and the other is us. Now, who are the investors in the them category? They are always in the I know school of investors. He divided the existing investors by saying that they are always I don’t know category of investors. Now this I know school of investors means that they are always market related, stock related, always only bullish, bearishness does not enter their mind. Where as I don’t know. School of Investors They are bearish by nature and when it comes to their investing style Predominantly.
Investor Psychology 2024 | I Know School of Investors are short term oriented i.e. they take long term or short term decisions. They are long term oriented and this I don’t know school of investors are short term oriented so they have less patience Where as I don’t know school of investors have more patience and because they have more patience they basically buy any stock While picking, what they think is that there are positives in that stock, now these positives are there, if not, I am missing something, what can go wrong? Think that orders are coming in the market but various positive news are coming.
Investor Psychology 2024 | Think that not only these positive news but also this can happen and also positively this can happen. Basically the problem is that this Aino School of Investors always invest in stocks. Even more than the stocks that have been invested, we see what stocks they have missed. When we see this stock in the market, suddenly we would have seen that stock. When is I don’t know the school of investors who are concerned about what the winners they missed are more concerned than the stocks they missed.
Think that they will be worried about their related so because of this they are always contrarian style contrarian style that is what we have seen in the current market condition, think there are companies which are completely ignoring the whole market, there are private banks which are completely ignoring the market and the pharma sector is one of the best in the last year.Investor Psychology 2024 | Even if they are wealth creators, they don’t care if they are current market, they can be sectors where the market ignores them, they can be individual stocks, where they are investing in contras style, where yes, I know school of investors are always trend followers, that is, if you look at current, railway stocks are having a moment, think RPUC Banks on railway side.
Investor Psychology 2024 | Even in , we do not run behind whatever PSC banks are within ₹100 or whatever other PSU stocks we have, whatever is moving in the trend regardless of fundamentals, we are trend followers because of this we are always in this school of investors which means that even if our stocks go up This stock has gone up and we should be more careful than what we think. This is completely new era. This company is related. So what happened before is different but what is happening now is different. The stock has increased 100% in one year but it has increased 150% but think what are their decisions in such time i.e. clearly see trees don’t grow to sky means stocks also do not increase like that.
So they avoid such stocks by saying that there is a clear psychological differentiation between these two. Investor Psychology 2024 | Because of this, whoever is in the Always I Don’t Know School of Investors, they earn multiple returns in the long term, even if they don’t earn money in the short term, wealth creation in the long term is What happens here is the Where As I Know School of Investors is that sometimes the luck in the bull market may come together, otherwise something may happen, sometimes in the short term you will make money, but in the long term, real wealth creation does not happen in the I Know School of Investors, he says.
Investor Psychology 2024 | So that’s why we always build whatever these I don’t know school of investor characteristics are, it’s very important because this is where real wealth creation happens for us. Now I’m going to talk about the nine important psychology points in the current market condition, whatever it is.
Investor Psychology 2024 | Because we have come to know about these nine important psychologies, what are the mistakes that are happening in the market related to this, how should we protect ourselves if we are making such mistakes and also how can we get benefit from them, let’s know all such details.
Investor Psychology 2024 | DISCUSSION ONE POINT NOW FIRST POINT COMMONLY A STOCK WHICH IS HIGHLY PRICED SUDDENLY SINGLE DIGIT I.E. FALLS FROM THREE DIGIT TO SINGLE DIGIT AND REMAINS THERE FOR LONG DAYS AND WILL REVERSE. We hear this statement more when the stock price is increasing and many retail investors invest when this statement is heard more.
For us we need to know based on improvement of fundamentals yes now related to this I will tell you practically any stock as an example not theoretically I think you can still understand it easily c recent example I will tell you a similar incident happened its an IT company ok it has increased very much in 2005, 2007 time The stock also increased from 1009 ₹90 to ₹722 at that time. From there it fell single digit. Now post covid what happened is when this stock started rising from ₹3 to 60 70.
Again the most heard word in the market is this time is different this company is completely different. It works differently. The management of the company is working differently.Investor Psychology 2024 | We have heard this in the market and many retail investors have entered. See the number of investors in the same period. From 99000 investors to 300000 plus investors, the move has been made. But really, it is really different.
Investor Psychology 2024 | That means you. If we look on the basis of fundamentals we have even bottom line in p&l but margins but we don’t see whatever we see so many again investors see this time it’s different and fallacy and they fall for whatever is there and they get stuck in that high price. It also happens in So when we hear this word R stocks that have fallen a lot are rising, think that they are rising and then we say that we will miss our stock price and instead of buying it, it is very very important and in fact another related example that we take a decision based on fundamentals.Investor Psychology 2024 | If we talk about it, in the recent time it is mostly said that this time is different and now it is heard in the current market as related to Switzerland.
Investor Psychology 2024 | It is heard that the stock S which starts with the same S is definitely wind energy as a sector if we talk about this time it is different i.e. if we compare it with the previous cycle now the government policies are also much better but really Suziland management did not make the mistakes they did previously and they grew the company very well. Whether they can do it or not, what we need to tell in time is let’s see if they really improve the fundamentals or if it is the second mistake made by the investors in relation to their wealth creation, the fallacy of perfection.
Investor Psychology 2024 | Now, when it comes to this example, a fundamentally perfect company means that the company’s products are very strong, the company’s growth rate is good, the company’s management is top quality, even if all these things do not create wealth for the investor, we cannot create wealth in fundamentally weak companies. I said that we cannot create wealth in the company itself, so where can we create wealth, you get this question, companies with strong fundamentals are perfect companies.However, we do not have a rule to be a perfect investment, if we explain this to you with an example, you will be able to understand it a little more easily.
Ok, if the valuation is as expensive as the company, then all the companies are fine, but in terms of actual valuation, think we have overpaid, even if it is a perfect company, even if we overpay, it will not create wealth for us. This is one of the best examples of this. So what happened due to stock price not growing.Currently if we see multiple from 60 it has fallen to 28,29 multiple so now if we look in terms of definitely fundamentals in this multiple it looks really attractive but if we look at that time then definitely it was not a right investment right It may be a company but it is not a right investment, so even in this market condition, you will find many companies with very strong fundamentals, right companies, but they are not at the right valuation.
That’s not right investment for us. People like to believe what the stories build up more than what the fundamentals are, yes or not many of you can relate, now a lot of stories are running in the market, basically blindly believing these stories means we mostly ignore this fundamentals part. If we want to talk about the best example for this.
Investor Psychology 2024 | How many retail investors bought this stock blindly, in fact related to this company, before all the SEBI related data came out, one day in our daily man, I said this company is not related. TCS will become Infosys, what do you know? Even now, if you watch the video, you will understand what happened. Basically, we are not only stories, but it is also very important to check whether there is matter in the real story or whether the integrity of the promoters is correct or not. Another best example for you is EK Energy C EK Energy is related to carbon credits and its related business growth is solid. How has this stock increased from ₹30 40 to ₹3000 since it was listed?
Within one and a half years after that, the accounting irregularities of reality promoters came to light,what happened to the stock, it went from 3000 to 300, 90% of the wealth was destroyed, no, many people may think that it went from ₹30 to 3000, it fell to 300, so ₹30. ₹300 for a purchase means that they would have earned money even now, but actually who would have bought with that ₹30, when will we be strong for those stories, that is, when we go to that 3000, say yes or no, it is not true.
Investor Psychology 2024 | That’s where the story starts to reverse and if I want to remind myself, the Punjuladu case in such examples is the case of Infra related between 2005 and 8, if there was a rally in the middle of 2005 to 8, everyone at that time l&t even then a large company would compare this Punjula with l&t and say that the next L&T will become this Punjuladu, the fundamentals. Completely ignored l&t remained the same and Bane grew. Where yes, the stock traded at ₹600. Now the company has gone without the original company. Next points, very very important points. Maybe the first thing we know is this tree will grow to the sky.Trees grow, but trees grow to the sky or not, a tree grows somewhere. Basically, many investors believe that stocks are rising.
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