September 22, 2007

Feeling smart …like the duck

In a bull market, one must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm, thinking that its paddling skills have caused it to rise in the world. A right-thinking duck would instead compare its position after the downpour to that of the other ducks on the pond. - Warren bufett - Letter to Berkshire Hathaway shareholders, 1997.

I generally check my portfolio performance once a month and with a runaway stock market (YTD +18% ) , it is diffcult to do badly. So I felt smart - like the duck :) . You have to just throw darts on a stock list to make money these days. Lets see what happens after the music stops !

So are you feeling like the duck?


venkat said...

Hi Rohit,

Definitely agree with you.. However, i was trying to look at RoA and the earnings yield (inspired by The Little book that beats the market) and found that there were some stocks which could run steel stocks like Tata Steel and JSW, cement stocks like birla corp. and Mangalam cement...
But definitely becoming a bit costly..


Rohit Chauhan said...

a lot of euphoria in parts of the market. but still there are pockets of value.
for cyclical stocks you may want to be careful in applying the ROA and earnings yields formulae. currently commodity stocks are on a cyclical peak and thats why they appear very attractive