First thing you need to set a portfolio goal. For example, setting portfolio goal of 25 percent in three years. If your portfolio remains promising quarter after quarter and a terrific idea comes in between, you must find some money within portfolio to buy that particular thing.

F&O trade is completely price focused, whereas buying stocks is completely value focused. For F&O traders price is everything. I don’t know how to make that transition. But if you are making good money, don’t change your style of trading.

We are not focused on what others are doing. We are extremely focused on what we do.

I don’t believe that the economy takes off and our portfolio will be completely bypassed. I try to avoid businesses, which for instance, is good for three years and bad for eight years. One must see over a period of time if they have beaten the indices big time and one has received a decent return.

Apart from passion and information, what you need is a framework. One needs to build a skill in making a good portfolio. Unless you can buy enough to make it at least 10 percent of your portfolio, don't buy that stock.

First, you must see the key financial ratios. This tells if the company has any advantage. Further, do refer to analyst research. Start building knowledge about the company such as what is the company doing right. Find out what is going to happen to the company's business in the next 15-20 years. Check how its competitors are performing and project how its competitors will do. Dig out the company's performance and project it for a set period of time.

I think one must look into the investment philosophy of the fund. There are AMCs with multiple investment philosophies and not just one. That is the filter through which you say yes or no to the stock.

Value migration is a very powerful theme.
First, you must equip yourself with the theory. People who are masters since early times create a lot of value. The very purpose that the migration is happening is to get better margins.

There are 2-3 hardcore principles of selling. One of them is if you are fundamentally wrong. For instance, after doing all the research, you bought the stock. Later, you figure out that it is completely wrong. You have to correct your portfolio. You have to sell.

The second is if the company is wrong. For instance, if they get into a diversified business, which one would have never thought they would do, and they put about 200 percent of networth into the new venture. Then one will have to run away.

Third, for instance, if I make my portfolio goal of 25 percent, later I notice that the stock has run to such a level that it is almost impossible to make 25 percent, then I will have second thoughts about continuing with that stock or not.