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Coffee Can Investing

Mistakes While Equity Investing By Mr. Talwar

a.Trading heavily:

Mr. Talwar had an average holding period of 4 months and his holdings didn’t last more than 8 months. This meant he was paying up to 7% of his portfolio value each year in the form of brokerages. There is no way to generate good returns if you trade this heavily.

 

b.Trying to Time the markets:

An irregular investor who always tries to time the market, i.e., buy at low and sell at high, isn’t able to gain much when compared to a regular investor. 

Mr. Talwar invested as and when he saw opportunities which meant that he ended up entering the stock market when the market was peaking and exiting when the market was bottoming. 

 

The only way to consistently make Returns was in fact to stay invested.

 

Patience and discipline in equity investing was the solution to this problem. 

 

After this, Mr. Talwar decided to invest 80% of his Corpus into equity

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Etee Bajaj

This document is curated by Etee Bajaj. A BBA (HNRS) Graduate from St. Xaviers College, she has also completed her M.Sc.(Finance) and CFA from ICFAI University, Hyderabad. She takes keen interest in stock markets and believes in Value Investing and Fundamental research and considers the storyline of a company a crucial factor in investment. Reading autobiographies of renowned people is her hobby.