Thursday, December 9, 2010

where to invest?

investing is the most profitable form of trading!

it is a myth that you invest in a company.

the reality is that you invest in a management

and

you invest in a business!!!

if the business is bad

even best management can't do anything for long!

for a moment,

let's assume that the business makes business sense.

then, there are 4 types of "managements" available for investing:

1. good management going thru bad times
= this is the best investing bet, a multibagger!
give then time and they will give you a wonderful gift!
e.g. tata motors' journey from 110/stock to 1376/stock
present example = mahindra satyam

2. good manangement going thru good times
= hold on, this is the best momentum play
stay with them till they are around
e.g. hero honda (since inception)

3. bad management going thru good times
= stand near the exit door if you can't avoid the bait!
e.g. suzlon

4. bad management going thru bad time
= stay away!

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