What is all about buying Stocks....95% of the population has
no access to equities on account of lack of affordability or access or
Information. Again the larger part of the 5% who invest in stocks believes it
as a platform to speculate and make/lose quick money. By and large the majority
of the earning people do not get into the market, with defined purpose.
What if building an investment portfolio of great stocks was
easier than you think — and something so straightforward pretty much anyone
could do it?
Before that, let’s make one thing simple and clear. Do not
look at Stock Market for Speculative Earnings. This message is loud and clear for
all first time investors, the ones who do not understand markets and also those
who get scared about losing money, and for those who mindlessly enter and lose
money on speculative trades.
Stock Market is a place to buy businesses. It is through
this platform that we can understand businesses, by measuring things like
nature of business, the market potential for the business, profitability,
growth prospects and balance sheet strength. Thus we can go and buy high
quality business. By buying those stocks we actually get to become owners of
the business.
This attitude is extremely critical for any investor who
would like to or who fear to get into stock market. A strong grounding on this
principle will enable investors to look at markets with calm.
Warren Buffet’s one of the Investment philosophies is to
assume every investment to be lifelong asset. Mind has to be trained to look at
every good stock invested as our own business and try and learn that business
through gathering information and understanding that business thoroughly over
period of time.
Small Cap business is an ideal platform for learning about
business. Identifying high quality business and investing not only money but
also time and energy on learning about the business will help in building
wealth out of the business. Even if we make a mistake, being not a speculative investment,
the loss can be minimized and course correction can be effective.
If you had only invested in small-cap, high-quality stocks
over time then you would have ended up eating two free lunches — one because
they were small, and another because they were high quality. Your portfolio
would be stuffed to the gills with profits over a longer period of time.
If you had wanted to beat pretty much any stock market over
time, at any point, all you had to do was buy the stocks of companies that were
both small and “high quality” when measured by things like balance-sheet
strength, profitability, stability and growth.
Today the demographic profile of India is youthful and this
is a boon and the bane. If we do not create enough employment opportunities,
the same demography which is a very big asset can become a liability. We need more entrepreneurs to build India big
and encouraging and promoting entrepreneurial mindset among the youth is
critical for long term sustained growth model.
India was traditionally an entrepreneurial economy. But in
the recent decades with the growth in service sector there has been a tendency
to move towards employment which gives comfort and cosiness for the youth by
and large.
Stock market can be used as a tool for generating entrepreneurs.
Encouraging youngsters to get into the habit of buying business, through stock
market, as a part of their savings and enable them to learn that business can
trigger the entrepreneurial mind set for the individuals.
Small Investors with little money can also get into the
market to buy high quality business, which will be a great opportunity for them
to have access to learning about good business models.
We strongly believe that educating investors to invest in
good business models and to make them use equity market as a platform for acquiring
quality business will be the only way to encourage youth in India to promote entrepreneurial
zeal.
Let’s invite youngsters for the mission entrepreneurship
through stock market.
