Reblog: Joel Greenblatt – The 3 Golden Rules Of Successful Value Investing


Here’s a great article published at Forbes recently regarding one of our favorite value investors, Joel Greenblatt. The article is written by Jack Schwager, author of the Market Wizards series, in which he recounts his interview with Joel Greenblatt for one of his books. Schwager recalls some of the insightful parts of the interview included Greenblatt’s successful investing strategy and his three golden rules of value investing.

Here is an excerpt from the Forbes article:

Is “value investing” correct? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.

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Reblog: The 7 Brutal Truths: Why You Should Not Be a Trader


Let me ask you…

Why do you want to be a trader?

You want financial freedom.

You don’t want to answer to anybody.

You want to be your own boss.

You want to make money.

You want a passive source of income.

Now you’re probably wondering:

“Is it possible to achieve all these from trading?”

Good question.

Then you’ll want to read every single word in this post because you’ll discover the myths, the possibilities, and most importantly… the truth about trading.

You may be surprised at what I’m about to share with you.

So if you’re ready… then let’s begin.

#1 You’re trading for passive income

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Indices end flat, Nifty holds 10,900; Sun Pharma tanks 9%


Continuing with their lacklustre performance for the third straight day, the equity benchmark indices settled on a flat note on Friday. While the day witnessed solid buying in bluechips such as Reliance Industries (RIL), HCL Tech, HDFC Bank and TCS, the gains in the index were capped by drubbing in counters including Sun Pharma, Bharti Airtel and L&T.

The S&P BSE Sensex ended just 13 points higher at 36,387, while NSE’s Nifty50 index held the crucial 10,900 level to close at 10,907, up 2 points. On a weekly basis, both the indices ended 1 per cent higher.

Sectorally, barring IT, all other indices ended in the red with the pharma stocks bleeding the most. The Nifty Pharma pack lost nearly 3 per cent to end the day at 8,690.

Shares of pharma bellwether Sun Pharma crashed to their six year- low of Rs 375.40 apiece in the early trade on Friday after news reports suggested fresh whistleblower documents were sent to Sebi. The stock plunged as much as 12 per cent on BSE. The company, however, in a BSE filing clarified that it was not privy to the news reported by MoneyLife. The stock, eventually, ended nearly 9 per cent lower at Rs 390.75.

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Reblog: Jim O’Shaughnessy: 25 Timeless Lessons From 30 Years Of Value Investing


One of our favourite value investors here at The Acquirer’s Multiple is Jim O’Shaughnessy.

O’Shaughnessy recently wrote an awesome series of tweets detailing twenty five investment lessons that he’s learned over thirty years of value investing. They’re a must read for all investors.

With Jim’s permission here are his twenty five timeless investing lessons:

  1. I have been a professional investor for over 30 years. What follows is some things I think I know and some things I know I don’t know. Let’s start with some things I know I don’t know.
  2. I don’t know how the market will perform this year. I don’t know how the market will perform next year. I don’t know if stocks will be higher or lower in five years. Indeed, even though the probabilities favor a positive outcome, I don’t know if stocks will be higher in 10 yrs.
  3. I DO know that, according to Forbes, “since 1945…there have been 77 market drops between 5% and 10%…and 27 corrections between 10% and 20%”. I know that market corrections are a feature, not a bug, required to get good long-term performance.
  4. I do know that during these corrections, there will be a host of “experts” on business TV, blogs, magazines, podcasts and radio warning investors that THIS is the big one. That stocks are heading dramatically lower, and that they should get out now, while they still can. Continue Reading

Reblog: How Investor Behaviour Gets in the Way of Success


Most textbooks portray humans as self-interested people making rational economic decisions, but people often are far from rational in making investment decisions.

Behavioral economics provides insight into why humans make sub-optimal decisions, studying the impact of psychological, cognitive and emotional factors on economic and investment decisions. Two winners of the Nobel Prize in economics, Richard Thaler and Daniel Kahneman, have been recognized for their pioneering work in behavioral economics.

In awarding the Nobel to Thaler in 2017, the Royal Swedish Academy of Sciences stated, “His contributions have built a bridge between the economic and psychological analyses of individual decision-making.” Thaler’s work was instrumental in pension reform, illustrating how subtle changes in framing can lead to dramatically different consumer choices. Thaler’s research contributed to policy changes including automatic enrollment of employees in 401(k) plans and the use of target date funds as the default option for new 401(k) enrollees instead of money market funds.

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Sensex slips 97 points on Friday, Nifty ends at 10,795; TCS falls over 2%


The benchmark indices settled marginally lower on Friday weighed by IT bellwether Tata Consultancy Services (TCS) and select banking and automobile stocks.

The S&P BSE Sensex ended at 36,010, down 97 points or 0.27 per cent, while the broader Nifty50 index ended at 10,795, down 27 points or 0.25 per cent. On a weekly basis, the S&P BSE Sensex rose 0.88 per cent, while Nifty50 rose 0.63 per cent.

In the broader market, the S&P BSE MidCap index ended at 15,177, down 19 points or 0.13 per cent, while S&P BSE SmallCap index slipped 28 points or 0.19 per cent to 14,600.

Shares of Eveready Industries India (EIIL) jumped 13 per cent to settle at Rs 205 per share on the BSE on reports that promoter BM Khaitan is likely to sell the flagship company, a leader in dry cell batteries and flashlights.

IT bellwether Infosys gained 0.58 per cent to settle at Rs 684 on the BSE ahead of the board meeting today to consider the financial results for the third quarter of the financial year 2018-19 (FY19). Its peer Tata Consultancy Services (TCS) declined 2.45 per cent to Rs 1,842 even as it earned its highest-ever net profit of Rs 8,105 crore in the seasonally weak third quarter (Q3) of 2018-19 (FY19).

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Reblog: Howard Marks: The Greatest Formula For Long-Term Wealth Creation Is…


One of our favorite investing books here at The Acquirer’s Multiple is The Most Important Thing by Howard Marks.

There’s one passage in particular in which Marks discusses how keeping one’s ego in check is the greatest formula for long-term wealth creation. Here’s an excerpt from the book:

The sixth key influence is ego. It can be enormously challenging to remain objective and calculating in the face of facts like these:

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Reblog: Why Everyone Is a Value Investor


Mention value investing and the phrase brings up different connotations for different people.

Some investors see value as a style as a dead regime, something stuffy old investors like Warren Buffett (Trades, Portfolio) live by, and their devout following of the strategy has cost them big time as they have missed out on some of the market’s best opportunities.

On the other hand, you have the devout value investors, those who remain fully committed to the strategy initially set out by Benjamin Graham and his partner David Dodd, all those years ago, even though this strategy has generated relatively lackluster returns over the past decade.

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Sensex snaps 2-day losing streak, ends 181 points up; PSBs rally


The domestic equity indices snapped out of a two-session losing streak to settle 0.5 per cent higher on Friday led by a rise in public sector banks and metal stocks.

The S&P BSE Sensex ended at 35,695, up 181 points or 0.51 per cent, while the broader Nifty50 index settled at 10,727, up 55 points or 0.52 per cent. On a weekly basis, the S&P BSE Sensex fell 1.05 per cent, while the Nifty 50 declined 1.22 per cent.

In the broader market, the S&P BSE MidCap index rose 0.48 per cent or 72 points to end the day at 15,148, while the S&P BSE SmallCap settled at 14,592, up 0.14 per cent or 20 points on Friday.

Among sectors, the Nifty PSU Bank rose the most on Friday, gaining 2.32 per cent led by Syndicate Bank, Punjab National Bank (PNB) and State Bank of India (SBI). Nifty Metal too, rose 1.40 per cent led by Jindal Steel & Power, Vedanta and Tata Steel.

The rupee traded on a firm note having risen to 69.75 against the US dollar in intra-day trade. The domestic unit had settled at 70.17 against the greenback on Thursday.

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Reblog: 4 Simple Steps For Finding The Best Trades – Professional Trading 101


Successful trading is 90% waiting and 10% execution and that’s the exact reason why trading is so challenging. When people think about trading, they imagine a well-dressed Wall Street guy who angrily shouts at his monitors while being on the phone with London, Hong Kong and Tokyo simultaneously to place the next big killer trade which will make him a lot of money. Dead wrong!

In this article, I will show you my approach to trading and explain how you must trade calmly and in a relaxed state of mind if you want to be successful in this business.

I call myself a reversal or early trend trader which means that I look for established and mature trends that show signs of exhaustion. The general trading literature suggests that new traders start with the trend following approach but from my experience I have seen that the reversal approach does make more sense to most traders.

Reversal trading has a bad reputation because people believe that it’s all about trying to predict the next market turn before it happens which couldn’t be further from the truth. Reversal trading is often nothing but early trend following trading as we will see.

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