Archives for July 2019
Mr. R.K. Chandrasekhar (RKC to his friends), is not your typical money manager or professional investor, but one amongst us retail investors whom I first met in 2011. Our bond has grown stronger since then, especially with RKC opening up his investment life in front of the Safal Niveshak tribe over the years, via his comments and feedback on my posts.
RKC started investing when I was born, so it’s quite a lot of years that he has been there, seen that. As a formal introduction, he is 67 years old and is an MS (O.R) from Case Western Reserve University and BSc (Mathematics) from Loyola College, Chennai. He is now retired from work after winding down his placement business in 2013.
In this interview, RKC talks about his long investment experience, his evolution as an investor, key lessons learned, his investment process, and how he tries to minimize decision making mistakes.
Disclaimer: Stocks/Examples quoted below should not be construed as recommendations.
Here is my attempt to answers a few key questions I have received from Safal Niveshak readers on the current turmoil in the stock market.
You won’t find perfect answers below, but this is just my attempt to help you get over your fears, which may otherwise lead you to act in haste, which can cause some damage to your process of long term wealth creation.
Let’s start right here.
1. Why is the market crashing?
It hasn’t crashed…so far! The BSE-Sensex is down just 6% from its peak this year. BSE-Smallcap is down 14%. BSE-Midcap is down 11%. This isn’t a crash!
If you think it is, you maybe be suffering from ‘denominator blindness’, which is the tendency to focus on the absolute number then the percentage decline. Or you just seem to have been spoilt by rising markets over the past few years and were not investing in 2008 when the last real crash happened. That was painful for people who experienced it with their money (and not just their eyes and ears). We have not seen anything like that since then.
…is almost always more profitable than investing when everything seems certain.
Investors, like most people going about their daily lives, don’t like doubts and uncertainties. So, they pay money and give up opportunities to avoid it.
Of course, it’s a good idea to avoid entirely what you can’t totally get your mind around, successful investing is largely about living through the uncertainties.
If you need reassurance, you’re giving up quite a bit to get it. Like high fees to experts who would predict the future (which you falsely believe as reassurance, which it isn’t), or expensive prices for stocks (because everyone knows their future is clear, which often isn’t).
On July 20, 1969, Neil Armstrong and Edwin Aldrin became the first men to walk on the moon. It’s been 50 years since then, and it remains one of the single greatest achievements of modern human history.
My father, who was nearing 20 then, had in fact transcribed the event as it was happening, while listening to Voice of America station on the radio.
Here is his transcript (click on the image below to download a clearer version my father copied from his original transcript on the day the astronauts landed back on Earth).