In equity markets, whatever precaution one might take, the probability of a mistake of getting stuck with a wrong stock is always high. But then there are mistakes and silly mistakes, just try to avoid silly mistakes. How ? Stay away from stocks where there is a narrative that this sector will do well because of ABCD reasons or the company will get such and such orders worth this much. There is enough evidence in history to show that more than anything else, checks and balances are most important at a point of time when valuations are high and sentiment extremely bullish. How do one put checks and balances? Integrate both quantitative and qualitative criteria to assess stocks, aligning expectations with realistic market performances and avoiding impulsive shifts based on short-term fluctuations.
