The Disciplined Investor

Staying power is the most important thing in #investing. Winning is secondary. If you stay long enough in the right place, you inevitably win. Most people fail to stay in the right place.

I tweeted this as a thread in 2018. I feel it's just as relevant today.. sharing again. 1. If a small investor, what can you do now? I will create and run this thread today. Hope you find it useful. 2. Firstly, take stock of what you own. List all your investments in one place. Rank them by size in descending order. 3. Within your portfolio, segment by size, holdings greater than 10%, 5% and 2%. Treat them as three segments. 4. Study your holdings above 10% intensely. How have they fared? Are they held on conviction or compulsion? 5. Clearly identify your larger holdings (>10% of PF) where your conviction is running low. Spend time studying them closely. 6. Within your top 5 holdings, rank your conviction. See if you have bought enough of each. Let conviction show in your holding. 7. List holdings which are more than 5% of PF. Rank them in descending order of holding size. Rank your conviction in each. 8. Compare your conviction across the >10% and >5% holdings. Put together a combined Ranking. Find worthy stocks to promote. 9. How you manage larger holdings decides your PF performance. Must weed out ideas when conviction goes out. Reallocate monies. 10. Smaller holdings in a PF are no less important. Often, they form a nursery for the future. Choosing them wisely is critical. 11. The nursery needs to be maintained well, needs more attention & care. A small position of today can be a core bet tomorrow. 12. Every position must be monitored and reviewed. When conviction grows on back of fresh inputs, one scales up his position. 13. Investment mistakes must be dealt with. Identify them and take swift corrective action. Don't hold merely on hope & prayer. 14. Managing each MCAP well matters. Large cap bets easier to pick. Business Visibility always better. Allocate adequately. 15. Midcaps have done very well. But, they mostly look overvalued. Prepare for time corrections in good stocks. Exit weak bets. 16. Small & microcaps can be treacherous. They fall as sharply as they rise. You may have overpaid. Review & revisit valuations. 17. Don't blindly average small & micro caps. They can fall more than you expect. Recheck if stock truly is investment worthy. 18. Small & microcaps deliver the biggest multibaggers. And, they also deliver the worst duds. Pick out the duds early. Exit. 19. The worst investment mistakes of small investors are due to blind cloning. Revisit cloned stock values & review prospects. 20. Stocks with higher PMS and MF ownership could carry structural and valuation risks. Judge them sharply. Do your math. 21. Remember every kinda investor- big or small, insti or retail, MF or PMS. HNI or DII overpaid in 2017. Stick to value now. 22. Know the parts of market to strictly avoid. If you hold in that space, be very watchful. Don't rush into overvalued parts. 23. Mistakes need to be actively corrected. Price mistakes can be averaged. Walkout of Bad picks. Learn to call your mistakes. 24. Create a robust, structured peer review mechanism. Build trust with smarter peers. Engage, interact, co-learn and evolve. 25. Use failures to relearn. Be your best critic. Don't take success as seriously as your failures. Embrace failure. Be reborn.