Investing Behaviour

How to Win At Investing (And At Anything in Life)

September 21, 2019 | Reading Time: 2 minutes | 28 Comments |

I wrote yesterday about five ways to destroy wealth in the stock market.

As an antidote, and especially as you may be sailing through the vicissitudes of ecstasy (after seeing your stocks surge yesterday) and, at the same time, misery (for not buying more stocks before yesterday), today I share with you one way to win at the game of investing, or at anything in life.

That way, my dear friend, is of equanimity, which is calmness and composure, especially in a difficult situation.

Indian scriptures define it better as samabhaav, which means “sameness of things” or samatvam, which means “evenness of mind.”

5 Ways to Destroy Your Wealth

September 20, 2019 | Reading Time: 2 minutes | 7 Comments |

It’s common if you are wealthy to worry about losing your fortune due to forces beyond your control. Like market meltdowns or economic stagnation.

But what many of us don’t realize is that our own behavior may be the root of significant losses.

Of Ben Graham, Investing, and Eternity

September 12, 2019 | Reading Time: 3 minutes | 12 Comments |

The Heilbrunn Center for Graham and Dodd Investing created a wonderful video in 2013 titled ‘Legacy of Ben Graham,’ which contains bytes from some of his students on how Graham’s teachings changed their lives.

Marshall Weinberg, one of the students from Graham’s class said that the biggest lesson he drew out of that class was on long-term thinking. Here’s what he said –

One sentence changed my life…Ben Graham opened the course by saying: ‘If you want to make money in Wall Street you must have the proper psychological attitude. No one expresses it better than Spinoza the philosopher.’

When he said that, I nearly jumped out of my course. What? I suddenly look up, and he said, and I remember exactly what he said: ‘Spinoza said you must look at things in the aspect of eternity.’ And that’s what suddenly hooked me on Ben Graham.

Why Most People Will Never Be Good at Investing

August 7, 2019 | Reading Time: 3 minutes | 20 Comments |

…because most people in the stock market, most of the time, don’t do investing, which is…

Thinking how markets work,
Understanding how people behave,
Studying businesses,
Sticking only with what is simple and what they understand, and
Buying stocks at appropriate valuations.

Instead, they are busy…

Envying (others making money fast or losing money slow),
Cloning (others’ stock ideas mindlessly),
Predicting (future of markets, stock prices, and economy),
Fearing (missing out on future gains),
Regretting (past mistakes),
Avoiding (accepting current mistakes),
Denying (reality, especially when it’s harsh), and
Indulging (in useless information and noise)

And if that’s not all, these often lead us to –

Trading (frequently, which adds to our costs),
Averaging down (on bad businesses),
Boasting (about our lucky short-term gains), and sometimes
Trolling (other investors on social media, who have not performed as well as us in the recent past).

With such a busy schedule, where is the time to practice investing? 🙂

Stock Market Crisis: Your Big Questions…Answered

July 29, 2019 | Reading Time: 14 minutes | 36 Comments |

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.