Originally posted by smartcat
Krishna - Your investing style is a refreshing change. Does value style /dividend yield type of investing work well in a growth market like India? Other than PE ratio and dividend yield, what do you look for before you invest in a stock?
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First of all I wish to point out that I am quite new to investing and missed out all the stock market action during Harshad Mehta time ( in Mid 90s ) and also the Techno boom/bust in 2000 .All stories I heard from my friends and relatives were only of burning their fingers and never entering the stock market again . So I myself was quite reluctant to enter until I read the book "The Warren Buffett Way " by Robert Hagstorm .It taught me how in a simple manner Buffett made money . So I too decided to work on the same principle .But I kept one Golden Rule of Buffett : Never Loose Money .
So more than making money I decided before entering the stock market the following rules :
1) Never to loose money
2) Get a return that is much better than that given by an RBI Bond i.e 8%
3) Over a period of 10 years I must have compounded my return by 25%
Note : I do not look in to the Index to compare my return .Since I keep a 10 year time frame I am not concerned about the movement of Index .True I did not cash on many Growth stories but I am also happy that I have not burnt my fingers in these 4 years of investment i.e I started in August 2003 and so far :
1) I have not lost any money
2) My returns are more than what I would I have had if I had invested in RBI 8% Bonds
3) My major investments have yielded a return of more than 25% ( Compounded )
I am still a learner and do hope to find new areas to explore and put my funds in .I hope I get to learn a lot through interaction from this forum .
Whether my approach is right or wrong I do not know but as I said I am a conservative investor .
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