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One Up On Wall Street: Chapter 4

December 8, 2020 by Laxman Sonale 8 Comments

Hello friends, in today’s article, we see chapter 4 of one up on wall street book. In chapter 4 we see the Passing the mirror test. In this test, you have to ask some questions, for your investment purpose. So let’s see step by step.

Passing the Mirror Test:-One Up On Wall Street: Chapter 4

So you are investing in a business that is going too high or bankrupt, and many businesses come and go in your portfolio. But only things remain that are you. The stock market is a type of vehicle of transfers money from one place to another. So be careful the value of money is always high. So for this purpose, let’s have to ask some questions to pass the test. This test the pure and not lie that telling you, yourself. So that why it’s called passing the mirror test. let’s check it out.

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Before investing, you have to ask the following questions:

Ask first is, do I own a house?
Second, ask, Do I need money in the near future?
Do you have personal qualities that will bring me success in stocks?
How much to invest?

So let’s discuss the above question. (One Up On Wall Street: Chapter 4)

Ans(Q.1): If you have the house then, you have the minimum capability to live for three years on that house. So if you want to make money in the stock market, you have to ask this question. If you don’t have a house, the first priority is the make the house and then manage your money, in the stock market. let’s discuss the question second.

Ans(Q.2): If you have a house, and you want money to invest. So let’s again ask to question this. If the answer is yes, then don’t invest money. So that money used for the near one year’s future of your family. after this you are qualified to the second stage of mirror test. (One Up On Wall Street: Chapter 4)

Ans(Q.3): If your answer is no to this question. Then don’t invest by yourself, hire someone else. If you want to invest money in yourself, then you have to learn three qualities.

1) You have the patient to increase your investment.

2) You also have disciplined quality, to manage your money.

3) And also third is you have to eager to learn. In the stock market, there is so much knowledge about the companies. so you have third quality. After these qualities, you are capable to invest in the stock market. As live longer as an investor. (One Up On Wall Street: Chapter 4)

Ans(Q.4): Answer this question, you have to consider is that how much money have is to ignore if you lose. That amount of money, you can invest in the stock market. Peter Lynch, say invest like, you don’t care about that money if they lose. With all the above questions you are ready for investment in the stock market. (One Up On Wall Street: Chapter 4)

After this, you have to face three emotional states, are as follows

Three emotional State:

Concern emotion: This emotion is developed when the stock market down. In that time, investors live in fear and take tension about their investment. This concern stops you to take action, of buying the stock at a bargain price. In this period of investment can go maximum return.
Complacency(Satisfaction): aftermarket down period is gone, the investor buys the stock at a high price. In that consider is that its stock goes high. But this time they have to concern. Because of This time market at the pick position. (One Up On Wall Street: Chapter 4)
Capitulation(Submission): This is emotion comes when an investor buys a stock at some price. Then suddenly the market goes down, at buying stock price. At this time investor sell all stock, and submit himself.

This is all about chapter 4 of one up on wall street book.

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One Up On Wall Street: Chapter 3

December 7, 2020 by Laxman Sonale 2 Comments

In this article, we see chapter 3 of One Up On Wall Street book. This chapter is all about Is this Gambling or what?. So let’s understand step by step chapter 3.

Is This Gambling or What?:

So many people say about the stock market is gambling. But they telling on their different way. When the market is in a bullish position, they called Investment. And when the market is bearish then people called Gambling.

In 1927, if you want to invest 1000 dollars, you have so many ways. so let’s start with Fix deposits. When you are investing 1000 dollars that increase by 7.5%. (One Up On Wall Street: Chapter 3)

And if you invest that money in government bonds, it gives 13.5%. And if you invest that money in a corporate bond, it gives 17.2%. And if you invest that money in common stock, it gives 272%. In that so many stock market crash, depression comes and go and so many recession come and go. After this stuff common stock gives a return on investment is about 272 times in 7 years. so let’s understand. Why stocks are investments.

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Why stocks are an investment:-One Up On Wall Street: Chapter 3

In your lifetime, you need only 6 stocks out of 10 stocks to successful. so let’s understand the power of common stocks.

In stock, you are an owner in a prosperous and expanding business. so you get benefits and stock prices to increase hugely. But bonds can’t make money as compare to stock.
In bonds, you are no more than the nearest source of spare change. Bond is like to take spare and sometimes one more dollar.(One Up On Wall Street: Chapter 3)
So there is no big company that is impossible to fail. you can’t say there is one blue ship’s stock or good company is not fail. If this is not happening, and you buy good company stock at a good price. you lose the value of that investment. So in that time, people say the stock is the gambling position and when stock increases are people called investment.
The stock market is like a stud poker game. As you go long as cards suggest favorable odds of success. and then you hold.(One Up On Wall Street: Chapter 3)

So the stock market is Gambling or investment is all about the investor mindset. If you have the knowledge of investment and company analysis then you make a good investment in a bad stock price company.

This is all about chapter 3 of One Up On Wall Street book.

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One Up On Wall Street: Chapter 2

December 6, 2020 by Laxman Sonale 2 Comments

Hello friends, in today’s article we see chapter 2 of one up on Wall Street book. In chapter 2 you get what is the oxymorons. And Why Peter Lynch called as oxymorons to the professional investor. In chapter 2 of One Up On Wall Street book, Peter Lynch explains that not all are the professional investor are oxymorons. let’s see step by step.

The Wall Street Oxymorons:-One Up On Wall Street: Chapter 2

Oxymorons: The professional investor who is doing dull work and gets the average return. So this type of professional investor is Oxymorons. So many professionals are not Oxymorons. Those are as follows.

So let’s see that people are professional investors but not oxymorons.

John Templeton: The best thing about john Templeton is that When the stock market crash in 1972 in the USA. These guys invest in other countries like Canada, Japan. They take all money from the USA market and invest in other countries. Most of the investor is not doing well in other country so for that, they can’t invest in other countries. (One Up On Wall Street: Chapter 2)
Max Heine And Micheal: Max and Micheal both are students of Benjamin Graham, so they follow the value investing approach, when the stock market is down then they invest in the market. So it is the professional investor but against the Oxymorons, so that why they are not the Oxymorons.
John Neff: He is a good investor, and choose that company to become a good return for him. For this reason, is also called Champion of out of Favor Stock. So he is not the oxymorons.
Ken Heebner and Peter Deroeth: Both of this investor is not going to the business school. Ken Heebner has a law background, and they completed their graduation from Harvard law school. So suddenly they have a passion for Equity. and then they start investing in equity and make more money. This is also a type of investor who does not go to business school and it’s got the benefit of that. (One Up On Wall Street: Chapter 2)
George Soros: This is a type of investor, who has the world record of the hedge fund. he is not also an oxymoron. And not doing what other oxymorons do.
Warren Buffet: Warren buffet is also a student of Benjamin Graham. He still operates the biggest holding company in the world. that has a big stock price. Warren Buffet is one that type of investor who comes in the Top riches people as an investor. He is a world-famous investor, and also a humble investor.

So let’s talk about the professional investor, following are some point about the professionals.

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Constraints for professionals:

Professionals discover companies very late: In professionals portfolios have a big size company and they don’t have time to research so that they don’t discover a company early. Sometimes it takes 10 years to discover the company. (One Up On Wall Street: Chapter 2)
Most Professionals focus on a handful of Companies: Professional investors select the company. which has a big size, and minimum risk. So they only focus on a handful of companies.
Fear of getting fired: Professional investor has a pressure of getting fire. So they do the same things as all professional investors do.
Spend a lot of time explaining to bosses and clients: If any one of those professional investors makes an investment in unpopular companies, They have to explain to the boss and also the clients. so for that difficult, most of the investor is not doing the investment in unpopular companies.
Constraints for professionals and the opportunity for amateurs: So individual investors make anywhere investment, without constraints and do a good job as compared to the professionals.
Amateur investor: If you think like an amateur, most of the time, you have common sense with you. So amateur investors to good investment as compared to professional investors. (One Up On Wall Street: Chapter 2)
Peter thinks like an amateur as frequently as possible: So that reason, he has the world record of fund manager continue of 13 years. You get good company, when you think like an amateur, so that reason peter thinks like an amateur.