Introducing Bluechip Momentum
Finding my Religion
“Religion is the ultimate search for meaning” - Victor E Frankl
Religion has played a great role in the shaping of humanity over centuries. If we look up the meaning in a dictionary, it says religion is a set of beliefs”, “a system of faith”, “pursuit of certain values with great devotion”.
If you think about it, for many of us, investing too is a religion; a way of life in the markets and a system of faith and beliefs.
With our whole world revolving around the markets , just like religion investing too has become an integral part of our lives; giving us our daily bread, helping us build our nest egg and also protecting us from our enemies (inflation, taxes).
My religious life in world of equities started two decades ago at the altar of value investing; learning the religion by reading the scriptures written by the holiest of the holy priests: Benjamin Graham , Warren Buffett, Seth Klarman, Charlie Munger, Templeton among others.
The basic tenet of the religion was very simple to understand “Buy one dollar for 50 cents” and so were the basic principles:
a. Invest for the long term, preferably think in decades (Don’t worry if the stock markets closed and did not open for 5 years)
b. Buy cheap with a margin of safety and sell high (when the value is reached)
c. Don’t follow the crowd (Be contrarian)
Practicing the religion
Armed with this knowledge of reading the holy scriptures like “The Intelligent Investor”, “Buffettology” , the copyright violated version of “Margin of Safety” (circulating on the internet) and backed by an MBA degree , I began my investing odyssey.
I spent early days of my religious life as a devout practitioner of value investing and firmed up my beliefs by regularly reading and watching my investing gurus (Blogs, annual letters, interviews , YouTube videos etc.). Incidentally the period also coincided with investing god’s favorite son Buffett attaining “sainthood” and his success further strengthened my faith in the religion.
Any one talking about trading or booking quick profits or investing for the short term is laughed at, mocked and even publicly ridiculed. And very quickly without realizing we graduate from being a “devout follower” to a “blind bhakt” (followers ready to go any extent to defend the religion).
Pain Ahead, Profits much Later
The scriptures and the noble priests had already warned about the pains of following this religion and also about the various tests that awaited ahead of us.
Also explained very clearly was that there would be long periods of time when you will bleed financially ( as you are trained to take contrarian positions). And to add insult to financial injury, from time to time you will also be called a fool for clinging on to losing positions, armed with more of hope and faith ( less of facts and conviction)
Test of Faith
When the dark clouds of worry and financial thunderstorms hits you (inevitable) you are suddenly faced with hard decisions to make. The situations are always not rosy but mostly hazy. Few decisions are bound to flounder and the financial ramifications of the bad investing decisions tests your faith.
Just like Religion, investing is not an exact science but more of a system of faith. Suddenly you are looking for answers to questions that shake the very foundation of your religion.
Why are you investing? Is my strategy (religion) the only way? Are there other successful strategies? Are there other Gods too whose prophecies are equally successful?
As I started my quest to find the answers to my burning questions, I found these pieces of fine advice:
“I’ve said in investing, in the past, there’s more than one way to get to heaven”. -Warren Buffett
Looking at the careers of the great investors, it is clear that there are many different, often contradictory, ways to succeed. Each has been highly successful in his own way” Roy Neuberger
Looking at the annals of our financial history and reading about the lives of these successful investors, it became obvious to me that there are multiple paths to investing nirvana and stock market success.
Growth Investing, Income Investing, Momentum Investing, GARP (Growth at Reasonable Price) are but different paths (religions) to reach investing heaven (success).
Personally, in my quest to find my religion, I stumbled upon momentum investing. Having got some early successes made me read a lot more about the momentum factor. Now, this religion has a name too – Bluechip Momentum.
You can read more here: What is Bluechip Momentum
I have applied the strategy to a part of my portfolio (around 20%) and so far it has served me well. As I learn more about this strategy, I will share my investing experiences and have created a model watchlist portfolio for this purpose
Final Thoughts - One Religion, One God
“There is only one religion. Though there a hundred versions of it.”
- George Bernard Shaw
There is neither a fixed path to stock market success nor a single common path suitable for all of us. Each one of us are unique in terms of our abilities, resources and skills.
Each one of us should learn, adapt and apply the philosophy that we think will best suit our unique investing circumstances for market success.
After two decades in the market as an investor , as a keen student of the market and as a lifelong learner, I have realized one thing that that there is only ONE religion- the religion of “PROFIT” and there is only one God – “ Price” or as is often heard in Dalal street “ Bhav Bhagwan Hai”(Price is God)
Keep Learning, Happy Investing !!!
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