Basic stock strategy... What do I do?

MNSL answered one year ago …

We must consider down market a great shopping opportunity.

We can consider following strategy.

Invest in fundamentally sound discounted and undervalued stocks with potential to grow rapidly in the future.

Invest in stocks with out of favour and neglected by main research houses. These are hidden gems and once it comes to others’ radar stocks prices will go up to the roof. There are outstanding stocks even now through out the world. In fact these stocks are slowly and gradually appreciating now. Still these stocks are very cheap and their earnings very much intact for next 05 years.

Switch stocks in hot sector to undervalued sector with great potential. Future earnings are very important. There are not much room to get above average returns from some hot sectors now.

Try to identify financial companies including banks going to survive in current market environment and invest whenever there is a big sell off in the market. Sometimes if you like you can get short term profit as well. Of course small investors have to adapt this strategy as well. Because unlike those days institutional investors, hedge funds and other complex funds are not trading for long term now. They can change market direction at any time irrespective of fundamental and technical analysis. This is the reason for the frequent fluctuations in the market. There is one exception. If you identify any stock and asset that going to appreciate continuously for at least next 10 years it is better to keep that stock in your portfolio. We must never sell this type of outstanding stocks. You can just wait without trading. You will get all type of returns for next 10 years. You will end up with becoming one of the most successful investors in the world.

Invest in food related companies including animal production and farm production and selected agriculture, agriculture equipment and fertilizer companies to get short term, medium term and long term return. We should invest only in undervalued companies with great potential, with less debt or no debt, with innovative ideas, with continuos earnings even in this sector now. Invest companies with strong export market.

We also should follow investment strategy of successful investors to identify great investment.

In summary we must follow combined investment strategy of Warren Buffet and Peter Lynch to get above average return under the current market environment.