In search of LATEST Investment Ideas...

Investing in Great Ideas / Great Stocks / Good Mutual funds can give good returns. Hence Investors keep an eagles eye on various recommendations that surface on TV / websites / whatsapp / twitter / magazines / Newspapers and what not.

Since they keep scanning so many media, mostly they skim through there recommendations. Infact, I have seen investors skim through magazines from last page to first page – all they want to know is which stock has been recommended, at what price and what is the target price. That’s it.

And there is an emerging tribe of investors who are bit more serious about investing. They believe that attending Investors forum / meetings where in these ideas are discussed and debated could help
them with first hand information.

In both these cases, investors are overloaded with ton’s of information. They hardly find time to drill deeper and gain conviction. As a result, if at all they invest, they make a token investment with very little capital – obviously since they have not gained conviction in these investments.

Ten days back, I was in a similar such investors meeting organized by Tamilnadu Investors Association at Chennai. 20 speakers addressed on their investment ideas with their investment thesis. There were close to 300+ in the audience. And it is a paid event. Investors from far and wide had come down to chennai to attend to this event. The objective is simple : Grab Wealth Creating Ideas and invest in it.

Thanks to technology - the moment these stock ideas were discussed on the  floor, these information’s were circulated on the whatsapp and twitter – most of them live. As a result there is no information arbitrage for those who attended the paid event and those who were tracking on twitter.

And the next working day,

• those investors (who attended the event or those who kept track on social media) who were prepared to invest (with clear mind) would have invested in some of the ideas and
• those who didnot invest, by all probably never invested till date. Most likely they would be looking for ‘latest’ investment ideas!

I was then pondering over what a typical investor should do, the moment they come across an investment idea (in any form):

1. Document it : Write it on a dairy. Yes – WRITE IT DOWN. Don’t cut-copy-paste in a word document or so.
2. And clearly write down what impresses them about this company.
3. When writing down, our clarity improves.
4. If it is not clear, then drill down – search more and try to fill the gap
5. If you are still not able to gain clarity – then don’t invest.
6. But in many cases, the stock price could run up by the time you invested.
7. As an investor, we might feel left behind by this market run up. We were in the right place and right time, but missed out in investing.
8. The reality is – we are not alone. This is the most common problem among investors.
9. Legendary investors like Warren Buffet do face these problems, but they are so focused that they wait for the their price to buy it. But we as retail investors find it difficult to wait-keep track- and then invest.

The best way to solve this issue is:

• Invest a little – may be 10% to 20% of what you thought would invest in these stocks. Say you allocated 1 Lakh for 10 stocks, then invest 10000 to 20000 IMMEDIATELY.
• And then keep researching the stock. The moment you gain conviction, scale up the investments. Or if you are going wrong, you can always cut down your position with little damage and move forward.

The reason, I had to post this article is:

• Many investors think that having right information is the most important thing in investing.
• The fact is: Having right information and ACTING ON THESE INFORMATION is crucial to investment success. There is little use in having the information alone. 
• In other words, there is BIG Difference between ‘Seeing an Opportunity’ and ‘Seizing an Opportunity’.
• Many investors are mere spectators. Many of them are paralyzed with the information overload.

The recent fall in stock market (which could continue for next 6 months), is throwing up beautiful investment opportunities. While it could be unnerving by the magnitude of fall and chaos in the market place, all that a good investor need to do is cut noise and invest in good stocks and mutual funds. Hope they regain their focus and restart investing.