Lessons from a failed trader

[taowave]

And what sort of returns are we talking?? Value has been a Tough road the last 15 years

And sir, what is your definition of value investing?

 

[radkrish]

Hello All,

I am writing this post because even if it helps one person it was worth it.

I purchased my first share of stock in 2005. I then became a daytrader for many years (until about 2014). I kept thinking that one day it will all click. I figured if I never quit, I would one day be successful. I tried price action, indicators, combinations of both, time and sales, etc. ad nauseam. However, eventually I quit, I had lost tens of thousands of dollars and had no backup plan or skills to build a new career upon. Unfortunately for me, I had no finance professionals around me to guide me. I wasted years of my life chasing short-term trading in hopes of one day finding a profitable system. I blamed my discipline. I blamed my trading system. I fooled myself into thinking that I was getting closer, that I all I had to do was work harder, and the profits would pile up soon enough.

Now here is where the story gets interesting. In 2015 I discovered value investing. I spent some time learning about fundamental analysis, something I spent no time learning back in my trading days. It all started to click. If a share of stock is just a partial ownership in a business, why would some squiggly lines on a chart tell me if the business would be more valuable in the future. If you were to buy a local coffee shop, would you somehow try to use TA to buy it? Heck no, you would research competition, talk to customers, talk to the employees, etc.. You would see how much the business earned over the last five or ten years, and try to pay a fair price to earn a satisfactory return on investment.

Once this light bulb went off, I then spent a lot of time reading everything Warren Buffett wrote and the writings of other successful value investors. I started to learn how to actually value a business using a discounted cash flow approach. Since then, I have yet to have a single losing year. It doesn't mean they can't happen, they will, I will possibly have many over my career, but the long-term scorecard will be satisfactory. I am now managing money professionally for friends and family. I just wish I could have seen the light earlier, instead of wasting so much time, energy, and money chasing short-term speculation.

Anyways, I figured I would write this post and share my story. If it helps even one person become more successful and happy, it was well worth it.

I am a immigrant from India, and I tried TA for some time. Like Darvas break out, and it worked for some time and I made lot of money. Finally I lost everything. Then I tried dividend Investing. Investing in companies with decent history of dividends and has a recent dividend better than the historical average. It was a super duper hit. I am not sure which is better?. Value investing or Dividend investing. Dividend investing has a built in timing and if the dividend shrinks time to trim.

 

[taowave]

Did your dividend investing performance coincide with rates crashing to close to zero,and did it outperform ??

I am a immigrant from India, and I tried TA for some time. Like Darvas break out, and it worked for some time and I made lot of money. Finally I lost everything. Then I tried dividend Investing. Investing in companies with decent history of dividends and has a recent dividend better than the historical average. It was a super duper hit. I am not sure which is better?. Value investing or Dividend investing. Dividend investing has a built in timing and if the dividend shrinks time to trim.

 

[Jones75]

And sir, what is your definition of value investing?

The Ben Graham way. Seeking out stocks that are underpriced in book and earnings with decent fundamentals. I try and stay near the top of small caps or the bottom of mid caps, that have movement in their trading volumes. I like to study financial statements. And no I'm not an accountant, I just enjoy it.