Have you driven on a 6-lane Expressway?
It is 3+3 lane highway.
L1 : L2 : L3 ::: R3 : R2 : R1
The left three lanes L1,L2,L3 and the right three lanes R3,R2,R1
L1,L2,L3 take the traffic to that side.
R3,R2,R1 are bringing the traffic to this side.
Vehicles on L3 & R3 are moving at fastest speed,
those on L2 & R2 are slower
while those on outer lanes L1 & R1 are moving the slowest.
Markets & Business-world in any country is also like a 6-lane expressway!
There are some companies growing and moving ahead at breathtaking speed
Others are growing at decent speed
Still others are growing but slowly.
Similarly, there are companies on the right side lanes also!
Some are stagnating, some are de-growing, some are slipping fast!
The beauty is - None of the 6-lanes is ever empty!
There are always newer and newer companies on all the highways.
Majority of them keep changing lanes.
Faster to slower to medium to faster......!
Back to forth to back to forth.......!!
Change is inevitable.
Every company going from Ahmedabad to Mumbai on the Expressway has to come back some day!!!
Atleast it has to change the lane to make way for younger and more relevant companies!
The Highway is alive! Always! 24x7x365 !!!
So, how to time investing into these companies?
Companied growing fast will continute to grow even when times are bad! At worst, their speed will slow down a bit!
Companies who are already on the "return-journey" will not reverse just because the economy and market are booming!
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Though late, finally I have got it right.
Trades should be timed, not the investments!
(When i say don't time the investment, I don't mean buy anything anytime. What i mean is if you see a great fundamentals' company at mouth-watering price, don't look at the watch!)
All the internet, print and electronic media
is cluttered with myths, confusion and misinformation about timing the market.
On one hand everyone is busy trying to learn to time the market or stock
with the help of bag-full of technical indicators,
on the other hand everyone has been mindlessly chirping
"Never try to time the market"
I have realised that short to medium term trading can be timed to reasonable accuracy with indicators but companies ready to take-off due to fundamental strength don't wait for the indicators to turn green.
So, trades should and must be timed
Investments - never!!!
Some businesses make a killing even when "the markets are down"!
Great investments are not done while looking at the clock.
As Warren Buffet says " As far as I am concerned the stock market doesn't exist. It is there only as a reference to see if anybody is offering to anything foolish."
As Peter Lynch says " I don't believe in predicting markets. I believe in buying great companies - especially companies that are undervalued and/or underappreciated."
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