BC FINANCE
Saved by @Shubham51ngh

Ten MF mistakes I recommend you avoid...

 1. Too much love

A fund does well. You fall in love with the fund house. You have a large mid and small cap scheme from them. They all tank together! Diversify. And remember being good at one thing doesn’t make you good at the other.
2. One for all

Applying the same metrics to judge different asset classes. What matters to equity funds doesn’t matter to debt funds. Arb funds are fully hedged - the individual stocks don’t matter, they do in equities. Understand what matters for each asset class.
3. Perils of passive

Assuming all passive funds are good because they are cheap. There are terrible passive funds out there too. They track bad indices. Or they track good ones but have a lot of tracking error. Passive requires its own set of research.
4. Apples and kiwis 🍎 🥝

We have categories in MF but sadly all funds in a category are not comparable. Just because a website compares them doesn’t mean you should look beneath. BAF categories have funds that are static, dynamic bond funds have rolldowns. Just an example.
5. Discretion on discrete returns

Everyone publishes 1y/3y/5y returns but they mean little. They matter only if you invested on this day 1/3/5 years ago. And one good month can make the entire 1/3/5 series look good. Rolling returns indicate the average investor experience.
6. The monster of 1y return

The single most badly used statistic in MF. And the single most published. It indicates nothing about the future returns of a fund. In debt, in fact, it indicates the opposite. Ignore it.
7. Global gyaan

What works for the globe should work for India. Different market, different rules. For instance ETFs have huge structural benefits in the US but in India index funds are a better structure because we don’t have a great market making infra.
8. What do I hold anyway?

Read fund manager commentary. Read market views. Read twitter blogs. But don’t open your portfolio. The single most important thing to check, is what do you hold. And it’s disclosed monthly. See it.
9. Copy thy neighbour

Buy because someone is buying, sell because a WhatsApp group says so. Personal finance is personal. 100 - age doesn’t work. Two 26 year olds may have diff liabilities, family backgrounds, professions. How can their portfolio be the same.
10. Switching costs

Lots of talk about MF fees. Do you know how much you pay in switching costs between taxes and exit loads? Every churn costs us more than we estimate, so think hard about it before you hit redeem or switch.
Last thing: there is something called too much advice (including mine!). We say AdviceZarooriHai but take good and limited advice.
Finally: Our new website solutions pages have a lot more info on the above to help you make better decisions on rolling returns, portfolios, risks etc. Do use them, not just to invest but to learn. Happy investing! Stay safe.

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The Great Reset is a massively funded, desperately ambitious, internationally coordinated project led by some of the biggest multinational corporations and financial institutions on the planet.

Devised and put in motion by 0.0001% of people, who honestly believe this world and society need somekind of reset. You might also be wondering what are we resetting from/to as this new firmware is desperately trying to upload itself by another tsunami of mainstreamed propaganda.

One of the most obvious reasons for pushed reset is the infinite expansion economic model reaching its limits and going bust, a fact admitted even by themselves.

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It's been more than 60 years since Philip Fisher wrote the investment classic in "Common Stocks & Uncommon Profits".

The book is famous for the 15 questions which one must ask before investing in any company.

THREAD


These are the questions which help us in determining the "quality" of a business.

Warren Buffett has time and again said that he is 85% Graham and 15% Fisher.

Let's have a look at these 15 questions.

P.S.: Stocks listed in this thread are not to be taken as recos.

1. Does the company have products or services with sufficient market potential to make possible a sizable increase in sales for at least several years?

The important point which you must note here is that you must not just look at the size of the company.

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Let's take the case of HDFC Bank. Although it is a huge bank, but it controls just 9% of the total credit market in India, suggesting an enormous opportunity for it to capture.

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1/ Periods of high profitability leads to reckless investments.

When profits are high:

-Boost CAPEX with little regard for ROIC
-Competitors will follow suit to avoid losing market share
-CEO's incentives aren't aligned with shareholders

It's a race to the bottom.


2/ The capital cycle will swing down when investments are taken too far.

Forecasts that were reasonable will now look overly optimistic.

Profits collapse, management teams are changed, CAPEX is cut, and consolidation begins.

This will pave way for a recovery of profits.


3/ Asset growth matters

Consider both asset growth at the company and industry level.

Avoid industries where assets are growing rapidly.


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When overdone, investments that appear logical at first can become disastrous.

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I'm lucky to attain financial freedom before 30.

I credit Fintwit for my learnings.

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1. $$ needed to retire
2. Researching a business
3. Reading annual reports
4. Reading earnings calls
5. Criteria of a multi bagger

(Read on...)

6. Holding a multi bagger
7. Economic moats
8. When to buy a stock
9. Earnings vs cashflow
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Here's my 10 favourite threads on these concepts:

1. How much $$ do you need to retire

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How much $$ do you need in your portfolio?

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Your investment returns are a lagging indicator.

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Conclusion?

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Start with the 10k.

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It's an assault on facts and reason. It's an assault on good governance. It's an assault on the bureaucracies that are being discounted. It's an assault on science and history. But it is also an assault on one of the underpinnings of democracy.

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DEVI KARUMARIAMMAN, THIRUVERKADU (TN)

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