Stable Investor dutifully presents this drawdown page from peak on twitter
The average drawdown for Mid, Small and Micro Cap index is between 15-20%, however the indices hide pain of actual portfolio stocks. This post is reminder that drawdown is much severe. Here are select stocks from my own India portfolio
JM Fin
35% from peak
CDSL
24% from peak
EPACK
32% from Peak
KPR Mills
23% from peak
Neuland Labs
26% from peak
I have to quote my guru Munger
"It’s not supposed to be easy. Anyone who finds it easy is stupid."
Market downturns are psychologically difficult, but enduring them is part of successful investing. Intelligence alone doesn’t prevent drawdowns; systems discipline is just as critical.
How do I cope drawdowns
Avoid daily stock watching it takes away pain although you need to reduce social media as well
Keep laser focus on business and 2-3 forward projections of invested companies, sell if things are too rosy!
Being honest to myself only liars catch true top and true bottom
Most importantly I am diversified across US stocks, Oz stocks and BTC (System driven)
Happy investing!
I am not good at entering and re entering so I ride till I think company is not at frothy valuation and growth runaway ahead else exit
how do you ride a company in pf have high absolute valuation. Any very slow moving technical based exit to derisk and enter back?