A manifesto - The Honest Truth By Ajit Dayal
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Investing in India - Honest Truth by Ajit Dayal
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31 DECEMBER 2008

Don't Miss: Investment Outlook for 2009. Special Issue of The Honest Truth On 5th Jan '09.

"Can you tell me", asked the investor, "where will the markets go in the year 2009?" My colleague sent me a note: Please can you share with our readers your views on the outlook for 2009?

So, the views are there. And you will receive it on the 5th of January 2009, by when I plan to finish putting my thoughts on paper.

Experience and expert
But there is something you should know about investing - a lesson that was brought home to all of us in these past 12 months: the paths may be known, but the outcomes are uncertain.

There are two ways to approaching the investment world: plain luck or having a discipline. These are the two paths you can follow.

And there are two possible outcomes for each of these paths: losing money or making money.

Chances are that following a disciplined path will give you better returns over time. But there are no guarantees that it will work every year. Even the world’s most astute and respected investors and gurus - with very disciplined investment paths - make mistakes and have bad years.

----------- Equitymaster Research -----------
Why buying some "about-to-go-bankrupt" companies
can be the best decision you ever make.
Read On.

---------------------------------------------

We just had one of those years.

No one can be an "expert" on a stock market. It is a description that I hate being tagged with when I am introduced to someone. But one can say that one has "experience". There is a big difference between being "experienced" and being an "expert".

An "expert" gives the impression that one knows everything and cannot make any more mistakes.

An "experienced" person, on the other hand, has observed events over time and recognises that there is still more to learn. The future will hold surprises.

The "expertise" of an investor is not a clinically achieved milestone of a surgeon. In fact, an investor can never be right 100% of the time. An investor is good if he is right more than 50% of the time - that beats the odds of tossing a coin and relying on the other path of "luck".

An investor achieves a cult like status if he is correct 80% of the time. Yet a surgeon would lose his license and probably end up in jail if he messed up 1 out if every 5 operations!

Power to the people
As the New Year unfolds remember: there are no messiahs in the investment world. There are no "experts" as they exist in the medical or scientific world.

But while we do not claim any messiah status, we know we are moving along the path of an investment discipline. The outcomes vary year over year, but they should stand us in good stead over time.

And the principles around which we give our judgements and our views stand steadfast:

  1. we gather information from various sources, we analyse this information, and give you our opinion based on what we believe;

  2. nothing that we say or write is influenced by what any company or advertiser promises us - our views are not for sale to the highest bidder;

  3. the fees we earn from giving any opinion or view is transparent - the subscriber to equitymaster research knows the fees to be paid and can gauge the value of the opinion offered.

  4. as we evolve, we will become a platform for more "views" and more "voices" - but each view and each voice will still follow our manifesto: Power to the People


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