Sunday, December 25, 2011

Investment Strategy

My Investment Strategy needs updating after reading the book " What I Learnt  Losing A Million Dollars".

1. Position Limits
No More Than 25k in a single stock.
 This is a very strict rule which need to be followed; No amount of promise of stock can break this rule.
2. All these Orders Are Placed On entry-- 10k is your current market.
- 15k  buy order @ 25% less than the 1st buy.


3. Holding Period
Minimum of 1 year.
- This is a strict rule, no amount of valuation will let you change your rule.

Stock Selection Checklist-

1. Working Capital Trend or NPA\NPL trend positive.
 2. Discount to Tangible Book Value
 3. Percent away from 52 week lows 
 4. Business should be #1, #2 or #3 in market share.

5. Power of customer should not be huge.