Prajna Capital - An Investment Guide

Enumerated below are twelve major principles and sixteen minor ones with brief comments on each of them: First Major Axiom: On Risk “Worry is not a sickness but sign of health. If you are not worried, you are not risking enough.” Adventure is what makes life worth living. Every occupation has its aches and pains. The rich have to worry about their wealth. But, if there is a choice between remaining poor and worry-free, the selection is obvious. It is better to be wealthy and worried than to be worry-free and poor. Minor Axiom I: “Always play for Meaningful Stakes.” If you invest Rs. 1000 and your investment doubles, you have only Rs. 2000 and are still poor! So if you want to be rich, you must increase your stakes. Minor Axiom II: “Resist the allure of diversification”. Firstly , diversification negates the earlier principle of playing for meaningful stakes. Secondly , it may keep you where you began so that your gains on few will cancel out the losses on the other few. Thirdly , it en...