How to deal with IPO Frenzy?

“The safest time to buy an IPO is on the breakout from its first correction and base-building area. Once the new issue has been trading in the market for one, two, or three months or more, you have a valuable price and volume data that you can use to better judge the situation.” – William J. O’Neil, MarketSmith Founder

 With the recently concluded IPOs of Hudco, CDSL, and AU Small Finance Bank making the news, we ask if a retail individual invests heavily in IPOs? A common notion in the market is that IPOs are easy money with minimal risk. We would rather ask our readers to be cautious with IPOs for the following reasons:

● Nearly all of the good issues end up with a tiny allotment for the retail investor due to huge institutional demand for the stock. Continue reading “How to deal with IPO Frenzy?”

A Stock Drops Below your Entry Price; When Should You Get Back In?

In the weekly technical article published on July 02, 2017, we discussed about “How to Preserve your Hard-Earned Money.” We hope you found the article useful. Today, we move on to a new topic, where we talk about “When Should You Get Back In.”

You bought a stock that had all the right qualities to become a multibagger. You saw it rise steadily to a double-digit gain, and then were forced to sell for a small gain, or break even as the stock plunged back to the proper buy point. Have you ever faced this situation? Continue reading “A Stock Drops Below your Entry Price; When Should You Get Back In?”

Break the Stereotype- Why You Should Be Buying in to New Highs?

“What seems too high in price and risky to the majority usually goes higher, and what seems low and cheap usually goes lower.” – William J. O’Neil, MarketSmith Founder

The ‘N’ in the CAN SLIM strategy stands for either a ‘New Product,’ ‘New Management,’ ‘New High,’ or any other new factor, which could positively change the operating environment for the stock and ultimately drive its price into newer realms. Continue reading “Break the Stereotype- Why You Should Be Buying in to New Highs?”

How to Preserve your Hard-Earned Money

The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.” – William J. O’Neil, MarketSmith Founder

In the last week’s article, we discussed about investor biases. We hope that you found that article useful. Today, we move on to a new topic – an important one that is aimed at helping you realize profits in an unpredictable market environment.

Continue reading “How to Preserve your Hard-Earned Money”

Investor Biases

MarketSmith India_ Investor Biases Article

“Don’t argue with the market. Never try to prove you’re right and the market is wrong.” – William J. O’Neil, MarketSmith Founder

In the last week’s learning article, we discussed how a rules-based investing system helps an investor to stay clear of biases. Biases can be of two types: cognitive biases, which stem from faulty reasoning, errors in processing information, and memory errors; and emotional biases, which arise from emotions rather than any conscious thought. Between these two types of biases, cognitive biases are easier to correct, through understanding one’s mistakes and learning from them.

Continue reading “Investor Biases”