Performance Trade Sheet August, 2018

Another Series ended with wonderful return. I always use the word, "Simple & Easy". August Series Performance on capital of Rs. 10 lac. Someone having 1 Cr, multiply the total profit by 10 & so on.

Gross 4.16% return on monthly basis.

Link for FY 2017-18 Trade sheet : April May-Jun July August Sept-OCT NOV DEC JAN FEB MAR

It is an exceptional return. Most people say it's quite less?? What I say : keep doing this for 30-40 years & rest will become history :) Best part with this is consistency of trades taken & executed. Month on month at Profit Idea we keep doing this. What is most important is that this return is on a portfolio of 10 lacs wherein, we have not taken the performance of equity which is getting multiplied at rapid pace. Some of my articles on equity performance can be read by clicking the Link : Case study on NBI Finance, VHL, DHFL, Dhunseri Investments, Ponni Sugars, Lupin, Jet Airways!

“ It is a conscious effort, to be very honest. It is more like ‘Eat, sleep, train, repeat’. If you want to be consistent, you need to be boring with your training, your food and your batting habits”.

So it is undeterred practice and hard work, which makes one, a legend, not the comfort of mother’s womb. (Yes!!, whoever told legends are born??! Alas!!)

Most people might keep wondering why I keep referring option selling similar to investing. In reality, if option selling is done with adequate capital it is exactly similar to investing, it requires:

a) Right selection - like picking right stock is important, picking right option to sell is equally important

b) Right Timing - picking a good stock is not enough, but picking it at right time is important. Similarly, selling an option is not enough, selling at right time is important.

c) Patience - value investing is all about having patience, so does option selling. You can't become rich overnight. It is consistent effort of finding right options to sell to become rich over time. One has to be consistent while selling & continuous evaluation is important like we monitor stocks.

Let's understand simple maths of how option selling can be similar to identifying a multi-bagger :

We aim to earn 3% every month & we are doing it quite consistently as you see in our trade sheets month on month. Now let's suppose we have Rs. 100 with us today & we continue with what we do. Remember, for most people it might be a boring exercise, but see what it becomes if done for 25 years :

100*(1.03)^(25*12) = Rs. 7,09,851/-

It is like buying a Rs. 100 stock which will be valued at Rs. 7,09,851 after 25 years. The idea is too keep it simple and let it grow. As we are doing it on 10 lacs, the idea is to make it 709.85 Cr.

Even if I don't compound it, still the number would be 100*(1.36)^25 = Rs. 218008/-. On 10 lacs, it is 218 Cr, not bad. Isn't it!!!

There are hugely beneficial reinforcement effects for teachers like me by repeatedly teaching things that really work and also by teaching avoidance of stuff that just doesn’t work as in: All I want to know is where am going to die, so I never go there. — Charlie Munger

(Compound Interest + Longevity) + Reasonable price = Wealth Creation

Happy Trading!!! Keep Minting Money :)

Case Study on Option Selling(Techno-Derivatives) : Link

Link for FY 2018-2019 Trade Sheet : APR MAY JUN-JUL

Link for FY 15-16 FY 16-17

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Last many years performance can be checked and authenticated on Profit Idea facebook group.