Buy and hold is a context dependent approach which works best with companies in steady growth industries with high barriers to entry and low rate of change. Applying blindly to other contexts is a recipe for disaster

There are ‘almost’ no absolute truths in investing. It’s always dependent on the context. Engineers and math oriented people like me find it frustrating and keep looking for some holy grail (like DCF). Eventually most realize it is foolish to look for false precision

How to fall in love (with a stock)
1/4 The best way to fall in love with a stock is to buy some of it. After that, most negatives will become invisible. To strengthen the love, recommend it your friends and talk about it on twitter

2/4 To deepen the love, follow each & every twist and turn about the company. Watch every interview of the management and obsessively read every research report (more than one time) about the company

3/4 To complete the circle, write a post extolling the greatness of the company, virtues of the management and how good its products are. Attack anyone who dares utter a single negative about it

4/4 If all of the above still leaves some doubt, then keep adding to the position even as the stock price keeps falling, thinking that no one else ‘gets’ it. Your eventual goal is to be proven right and to show the world how smart you are. Ps: I have been guilty of all the above

A THREAD on some insightful thoughts about Investing & Financial Independence by Rohit Chauhan (@rohitchauhan) Sir:

1/

The unfortunate reality of markets is that the last one to panic loses the most. So if you must panic, do it early or else don’t.

2/10

Investing is such a solitary activity where you are fighting your own bias and lack of knowledge; that it is amazing to see people argue and fight with others about the merit of their investment ideas.

Other than preserving your ego, what good can defending your ideas do?

3/

Thank god, my parents did not do a DCF on me like a lot of investors do in their analysis. Negative free cash flow during investment phase (school & college) & conclude my NPV was -ve. Good thing there is no way to short your kids. U are forced to be long & hope for the best.

4/10

It's a privileged life if one of the main worries in life is how to beat the market.

Less than 0.1% of humanity has this worry. It is the highest of high class problem.

5/10

25x is a good threshold for financial independence, where x is annual expenses.

Focus on fulfillment and not money beyond that. If you still chase money, then it’s not the money you are after.