Author: Mayur Gudka

5 Things I require before I purchase a stock

Every time I’ve been strict about following these requirements, I’ve made money. It’s true 100% of the times.

Other times, I’ve lost money.

Apply these requirements to your investment selection process, and see how it works for you.

Also, I apologize for the ruthlessness of the following sentences. These are absolute necessities for my investing methodology. Any leeway is these matters is inconceivable.


I require my investment to either produce a product, or deliver a service.

When a business produces a product, or delivers a service, the value of the business is no longer hypothetical. It relies on the quality of the product or service delivered. This requirement automatically eliminates all commodities and cryptocurrencies from my radar.


I require the business to be profitable before I invest in it.

Companies that continue losing money for more than 5 years after inception in the name of growth, do not interest me. The senior management in such businesses is made up of incompetent folks.


I require the business to be self-sustainable.

The business has to operate on little to no debt. Businesses that heavily rely on debt for its operations do not deserve a place in my portfolio. As soon as the river of debt dries up, the operations take a nosedive in such businesses.


I require businesses to have increasing revenues and higher profit margins.

Combination of these two factors fortify a business. It gives it a moat. Longer the sustainability of this moat, better the business.


I require the business to be on extreme sale before I invest in it.

When a high-quality business is being offered at a significant discount compared to its intrinsic value, the odds of losing money are almost non-existent, and odds of making money are greatly in my favor.

19 Bear Market Indicators from Bank of America

On a regular basis, I go through all my files, clippings, etc. Most things I save “in the moment” turn out to be useless shortly thereafter. So, those get chucked.

One of the interesting things I found saved from earlier was a list of bear market indicators from Bank of America. Sharing them here with you.

  1. Federal Reserve raising interest rates
  2. Tightening credit conditions
  3. Minimum returns in the last 12 months of a bull market have been 11%
  4. Minimum returns in the last 24 months of a bull market have been 30%
  5. Low quality stocks outperform high quality stocks (over 6 months)
  6. Momentum stocks outperforming (over 6 to 12 months)
  7. Growth stocks outperforming (over 6 to 12 months)
  8. 5% pullback in stocks over the last year
  9. Stocks with low price-to-earnings ratio underperform
  10. Conference Board’s consumer confidence level has not hit 100 within 24 months
  11. Conference Board’s percentage expecting stocks go higher
  12. Lack of reward for earnings beat
  13. Sell side indicator, a contrarian measure of sell side equity optimism
  14. Bank of America Fund Manager Survey shows high levels of cash
  15. Inverted yield curve
  16. Change in long-term growth expectations
  17. Rule of 20, trailing price-to-earnings ratio added to CPI is above 20
  18. Volatility index spikes over 20 at some point within the last 3 months
  19. Earnings estimate revisions rule

I found many of these to be interesting, and useful.

5 simple tips that I learned to improve my writing

Writing is an amazing habit. I try to write everyday. Most days, the writing is average or below average. Once in a while though, the stuff that comes out makes me wonder … did I really write that?

Regardless, writing on a daily basis is a habit I recommend everyone ought to cultivate. You don’t have to write lengthy prose. Just write anything that comes to your mind. There are so many benefits to writing. Just google “benefits of writing“.

But, there are 5 tips I learned, from many different sources, that improves my writing. Hope it helps your writing also.

#1 – Delete the word “that”

You believe that I’m sleeping, but I’m not.

Now, let’s try again without “that”.

You believe I’m sleeping, but I’m not.

#2 – Avoid words that end in “ing”

The food I am eating is usually very disappointing. What are you eating?

Now, let’s try it without the -ing.

The food I eat usually disappoints. What do you eat?

#3 – Remove the words “I think”

“I think, this computer is faster” becomes “this computer is faster.”

The words, “I think” add no real value to the sentence.

#4 – Short Sentences, Shorter Paragraphs

Write short sentences. Write shorter paragraphs.

This tip is from Ernest Hemingway. Most classics have long sentences, longer paragraphs. Not Hemingway. His style came from being a journalist from Kansas City Star.

His best example about short sentences and shorter paragraphs is this:

For sale: Baby shoes. Never worn.

Ernest Hemingway

A powerful six-word story.

#5 – Be positive, not negative

Another tip from Hemingway. Write what is, not what isn’t.

Instead of saying, this is painless, say, this is comfortable.

Instead of expensive, say economical.

In conclusion …

That’s it. Writing is a muscle. More you work it, stronger it becomes.

When I first discovered these rules, I had trouble committing them to memory. I still forget many. So, I created a printout I can keep on my desk for easy recall.

Download your copy of 5 Simple Tips that Improved My Writing. (no email required). Share it with others without changing anything.

Hope these tips are beneficial to you

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