Author: Mayur Gudka (Page 1 of 2)

9 Questions to Ask before Buying a Stock

Here are 9 questions to ask before buying a stock.

  1. What is good about this company?
  2. What are the risks associated with this company?
  3. What is the likelihood of each risk coming true? If so, what are the consequences of it?
  4. What is the company doing to mitigate these risks?
  5. What does the future of the company look like?
  6. Does the management possess integrity, honesty and intelligence?
  7. What is the intrinsic value of this company?
  8. How much of a discount is the company currently selling for?
  9. How do I know I am correct in my assessment? What evidence do I have to backup my answers?

The answers to questions 1 through 6 can be found in the annual reports. You should probably read annual reports of the past 3 to 5 years to get a clearer picture of the company. It will tell you a lot about the future of the company, risks associated, and management’s ability.

Answers to questions 7 and 8 will require you to do some math. There is no one way to calculate a company’s intrinsic value. Googling “How to calculate a company’s intrinsic value” will give you plenty of ideas. Research a few, and use multiple methods to see if the answer is within the same ballpark.

In my experience there are three reasons people will lose money in the stock market.

  • Lack of extensive research
  • Gut feeling so strong investor loses any objectivity
  • Arrogance – It is correct because I say so.

While questions 1-8 are about extensive research, question 9 is about eliminating arrogance and gut feelings you have about a stock. It’s about ensuring you have actual evidence to backup your gut feelings, and make an informed decision.

Hope this helps.

How do you choose your heroes?

I have 6 people as my heroes so far.

My first two were added to the list early in life. It’s been about 12 years since I added #6.

At first, the only question I asked was, would I want to live my life like this person? My only criterion was, do their values align with mine?

Eventually I added a few more filters … how they lived (simply or lavishly), how they treated others, their thought processes, how others felt around them, and how content they were with life.

Turns out, all 6 of them had a lot of commonalities. First thing I noticed was they were all content with living the most basic life. They were all sharp, long-term thinkers, and other people always felt better about themselves when they were around one of my heroes.

Naturally, I am no where close to being the kind of persons my heroes are. I may never be. And that’s okay. My six heroes are my guiding light, my true north.

So, how do you choose your heroes?

Practice intentionally … daily.

When you create 100 things, 1 or 2 of those things may be fantastic. About 10 to 20 of them would be mediocre, and the rest would probably end up being bad. And that’s okay because it’s all part of the process. To create those fantastic things, you must go through the bad and mediocre. Simply because one never knows which of those 1 or 2 things will be fantastic. It could be towards the beginning of the 100 things you create, or the end, or the middle. No one knows till you create a large body of work, and then introspect on it.

Take caution to not introspect too much, or too often, for that often results in discouragement.

The most important thing is practicing, being consistent with whatever you choose your art to be. Be it writing, exercising, painting, speaking, acting, teaching, anything you choose as an outlet of expression, be consistent for the long run, and you’re bound to get better.

It’s the secret of all masters. Consistent practice of the art blended with a deep desire to improve.

Some Thoughts on Advocacy

Hiring an advocate who will stand up for your loves ones when they cannot is an amazing thing you can do for your loved ones.

For those among us who are financially blessed, this is a good option. You voice your concerns to your advocate, and the advocate will ensure quality services are provided in a timely and appropriate manner.

However, not everyone is equally blessed financially. So, not everyone can afford to hire an advocate.

One thing that we all have is our voice.

Using our voice requires courage.

Courage can be difficult to muster often when most needed.

Using courage has two requirements – you cannot be timid, and you should be okay if someone dislikes you for standing up.

This usually isn’t a problem for people who have the knowledge and information to back up their beliefs, their concerns.

Knowledge helps build courage.

Become knowledgeable and use your voice to get the outcomes you need.

Knowing your rights and knowing how and when to exercise them is one of the most powerful things you can do when advocating for your loved ones.

The “Should Will Am Did” Cycle

I should be doing it.

I will do it.

I am doing it.

I did it.

Let’s read it again.

I should be doing it … is Awareness

I will do it … is Intention

I am doing it … is Action

I did it … is Accomplishment

Four Stages of Everything

These apply to brushing your teeth on the morning.

These apply to going through a certification audit at work.

These apply to getting married.

These apply to switching jobs or careers.

These apply to building a business.

These apply to literally everything … writing a book, creating music, taking a stroll down the road, anything.

Journeys between the stages

Distance between each stage is a journey.

In my experience, traveling from “Should” to “Will” is not that big of a journey.

Traveling from “Will” to “Am” takes a long time. This is all about mental preparedness. If one is not mentally prepared to take this journey, this journey will never happen. The cycle is stuck at the corner of “Will” and “Am”.

Traveling from “Am” to “Did” is about persistence, consistency, intelligence and hard work. For a few lucky ones, this is a breeze. For the rest of us, it takes longer.

The beginning part of this journey is usually an uphill, without the upcoming downhill in sight. The terrain is rocky, and weather can be unpredictable. Yet, once you get through the initial bumps, the clouds move aside, and the ride becomes pleasant and fulfilling.

That’s when you get to the “Did” stage.

The “Did” stage is also a Decision stage. Do you stay and bask in your glory, or do you venture onto another journey?

I think this idea has the potential to turn into a book. Still mulling over it.


Three Questions for Personal Growth

Assessment is a critical part of any personal improvement framework.

Reflection is a wonderful assessment tool.

Weekly reflections on actions and their results is a good habit to form.

It’s not something I do on a regular basis, even though I know I should be doing it.

While I continue to improve on this habit, it’s also a habit I’d like my children to develop.

But, you can’t get granular with children. It just doesn’t work that way. Even with adults, it can get tedious after a while. With their short attention spans you just can’t be too granular on topics like this. Especially if you want to continue doing this in the long run.

Rather, I feel the assessment should be of very high level with kids.

I’ve come up with three simple questions I’m going to start using with my kids on a weekly basis, preferably Sunday evenings.

Here they are:

Question 1 – What have you completed?

Question 2 – What have you improved upon?

Question 3 – What have you failed at?

The first questions is about progress, second is about growth, and third is about experimentation.

They’re all critical components of personal growth. You can’t have growth without experimentation, and you can’t have progress without growth. Oh, and without progress life just becomes a hamster wheel … doing the same thing repeatedly expecting different results.

One last thought.

Celebrate! Regardless of the answers they give, Celebrate! Celebrate not just their successes or failures, but celebrate your kids for their courage, their resilience, their grit, celebrate them for just being kids.

The Culture of More

The culture of more is wrong.

The culture of more is right.

Both statements are accurate … depending on our focus.

What are we focusing the “More” on?

Is it More Money? More Cars? More Houses? More Family Time? More Vacations? More Conversations with Friends? More Sports? More Community Service? More Dining Out? More Movies? More Reading Books? More WHAT?

The “Focus on More” in turn depends on our personal values and priorities in life.

And, that is where we invest/squander our resources.

Two Choices

Can you imagine what advice you would give to yourself, the day you graduated?

I wondered that this morning. Here’s what I wrote.

Congratulations on your graduation!

Life begins now. You’ll be presented with two choices every morning.

  1. Go through the day.
  2. Live the day.

The good of it – You’re in control of this choices.

The bad of it – If you don’t decide, you automatically choose the first option.

Neither decision is right or wrong. It’s simply YOUR decision.

I hope you have the courage to follow your heart.

Here’s a secret:

Day becomes much easier, if you make that decision before you get out of bed.

Romancing with an Idea vs. Loving the Act

My 6-year-old loves the library. She diligently visits it bi-weekly and checks out 5-6 books per visit. At home, she keeps the books on her writing desk. Two weeks later, she returns them to the library and repeats the cycle. While at home, the books simply sit on her desk. She never opens them.

Ask her if she likes reading books, and she’ll always answer in affirmative. She loves books, and she means to read every single one of them. Yet, she simply does not.

Let me rephrase. The idea of reading books is very romantic to her. Yet, she does not because the love for reading (the act) is not there yet.

Going to gym is a wonderful idea. Millions sign-up on January 1st, each year. Yet, come February … you know what happens. The idea of going to the gym is very romantic. But the act of exercising, is not very lovable.

At our home, we buy fresh fruits and vegetables every week. We also throw away a bunch of rotten fruits and vegetables every week. Again … the idea of eating fresh, healthy vegetables is very romantic. But the act of preparing meals with them, is not very lovable.

I was oblivious to this difference all my life. And because of that, I’ve put myself through too much heartache. Just because I’d find the idea romantic, I’d sign up for it and soon regret it. However, because I’d committed to it, I’d go through it regardless while being miserable throughout the entire experience. Running was one of them. I quickly discovered I’m not the runner type.

Martial Arts on the other hand … now that’s an idea I not only find romantic, but thoroughly enjoy practicing and improving.

Decision time. Now that I finally understand the difference between the two, I’m going to stop committing to every idea that seems romantic at the outset. Rather, I’ll give it a short test run to see if I love the act. If I don’t, the idea does not get my commitment, or my resources.

This simple idea will allow me to have many experiences, but only be committed to those I truly enjoy.

Someone pointed out that if I stuck with an act long enough, and showed discipline, it may just work out.

I somewhat agree. While an act requires discipline for one to be successful at it, I believe enjoyment of the act is a prerequisite. If I don’t enjoy it, I’m unable to be disciplined at it.

Have you had experiences where you were miserable? Did the idea of doing it seem romantic? Yet, the actual act was anything but?

100 Hours

Magic happens when you combine hard work with discipline and intelligence.

100 hours is what I was thinking about this morning.

What can you accomplish if you had 100 hours?

If you give a project, or an idea 10 hours a week for 10 weeks, that’s 100 hours … how much progress would one make?

10 hours a week seem too much? That’s 2 hours a day, an hour in the morning and an hour in the evening, Monday to Friday.

What about 50 hours? 5 hours a week for 10 weeks? That’s one hour a day working on a personal project, or an idea. The weekends are still free.

52 weeks in a year. If one takes 10 weeks at a stretch, works on an idea and takes three weeks off to relax and rejuvenate, and continues the cycle, that would equal to 4 large projects with 3 weeks of relaxation between each.

Theoretically this makes sense. Practically, it’s a test about discipline.

I’m going to give it a shot. My discipline muscle needs a lot of work. This would be a good experiment. Will see what happens.

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