What are the biggest lessons learnt in Equity Investment?

In this post, we will see what are the biggest lessons learnt by an Equity Investors.

1. Never follow brokerage houses blindly

Below are recommendations on Tata Motors, given by different brokerage houses on Jun 18. In spite, most of the different brokerage houses being bullish on the stock, it went continuously down and has given -53% return in a year.

2. Do not blindly follow technical or fundamental gurus on social media (Quora or Facebook)

Equity investments are bound to be risky and you should decide your risk before jumping in the sea for swimming. 

I have received a lot of queries regarding a stock named “Premier Explosives Ltd”. Just because the stock is rising daily should not be the reason to buy it. This stock is another garbage company and usually used for pump and dump by stock operators. 

Below is the 1 year chart of the stock.

Another case: Most investors got stuck with DHFL at higher prices just because a lot of people have recommended it on Quora. They invested without even doing any prior research.

I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.– Warren Buffett