Investing Behaviour

My 2014 Wish for You – Be Miserable

“Why are you in such a sad mood, Ravi?” I asked my friend as he visited us with his family this Christmas.

“You should see my stock portfolio Vishal!”

“Why, what happened?”

“Oh, it’s up just 30% this year!”

“30%! And you are still sad?”

“Yeah, because this could have been more than 30% had I not missed a few amazing stocks like…”

“Like?”

“Like Mindtree that is up 120% in the last one year, Cera Sanitaryware that is up 90%, Eicher that is up 80%, Aurobindo Pharma that is up 105%…and then there are the ones like Relaxo and Ashiana Housing, that are up 100% since April.

The Devil Lies Within

A few random searches on Google brought me to these…

I posted the first image on Safal Niveshak’s Facebook and Twitter pages and got a flurry of replies…

I expected people to bash the forecaster in their responses, and so they did!

One Small Step Can Change Your Life

We live and we learn to take
One step at a time
There’s no need to rush
It’s like learning to fly
Or falling in love
It’s gonna happen when it’s
Supposed to happen and we
Find the reasons why
One step at a time

When you can’t wait any longer
But there’s no end in sight
when you need to find the strength
It’s your faith that makes you stronger
The only way you get there
Is one step at a time.

~ One Step at a Time (Jordin Sparks)

Every path to success has been littered with doubt, fear, and uncertainty, as well as persistence, calculated risks and repeated action.

The difference between someone who fails and someone who succeeds is the courage to act, repeatedly.

7 Life-Saving Lessons on Investing from a Happy Marriage

Happy marriage Disclaimer: Some ideas discussed in this post may not be applicable to the author. 🙂

As I complete 10 years of my marriage, I can say that a marriage, no matter how good, can be made better.

My experience also tells me that a good marriage has some basic qualities. One, for instance, is that both partners are fully devoted to the relationship. They are willing to invest time and energy to make it grow and flourish.

They also communicate effectively with each other and know how to resolve their differences.

And they learn to be flexible with each other’s behaviour and choices.

You see, there is no right way to be married. Many marriages just work out great. However, there is a wrong way to be married. And it is when you don’t invest in the relationship.

Anyways, a happy marriage can serve a very good example for an investor in stock markets.

5 Things to Avoid in the Current Stock Market

When I thought of writing this post, the BSE-Sensex had just touched its all-time high level of nearly 21,300.

But as I was giving the final touches to this post, newspaper headlines read “Sensex posts worst week in three months”.

As I read now, the bulls are predicting that the worst is behind us, while the bears are advising taking money off the table.

Before my mind goes numb seeing and hearing the noise all around, let me share with you 5 things I think you can safely avoid in the current market.

[Read more…]

Understanding Behavioural Biases in Finance and Investing (E-Book)

“How do I read stuff you recommend when I have no time left after work etc.?”

This is one common reason I hear from people who have not yet gotten down to reading the brilliant literature out there on investing and investment behaviour.

If you have had similar excuses/reasons all these years, I present to you Mr. Balaji Ganesan, a Safal Niveshak tribesman from Chennai, who works as an IT professional, and who serves as a great proof that if you have a passion, you can take out time to follow it.

Balaji has been the most prolific contributor to the Safal Niveshak Forum, and shares largely on behavioural finance and his experiences dealing with the same.

He has contributed more than 100 posts on the Forum pm various biases, and I thought it would be great if he could create an eBook on the subject and share with other tribesmen.

Life, Liberty, Happiness…and Investing

Image Source: Flickr

“Life, Liberty and the pursuit of Happiness” is one of the most famous phrases in the United States Declaration of Independence.

In fact, it is considered by some as part of one of the most well-crafted, influential sentences in the history of the English language.

These three aspects are listed among the inseparable rights of man.

Despite this, as I suppose, it would perplex a visitor from Mars whether we human beings really want what we say we want – life, liberty, and happiness.

This is especially true if the Martian were to drop somewhere on our stock markets, and examines the behavior of investors, speculators, analysts, and fund managers.

He would no doubt question the intelligence of the planet’s inhabitants, and would wonder…

“Do these guys really want life, liberty, and happiness…the rights they have been wanting for ages? They seem to be hell-bent on destroying themselves through their foolish actions! Is this the way the entire humanity works? If yes, I must thank my stars for being a Martian and not a human!”

Buffett, Buddha, and Pizzas

Why does the obese guy (who says he wants to lose weight) eat a large pizza when nobody’s watching?

I have a friend who does this often, and here are the three reasons he gives…

He doesn’t want people to know
It gives him instant pleasure, and
If he doesn’t eat the pizza (thereby delaying gratification) it won’t give him instant weight-loss (something he desires)…

…and thus, instant pleasure (in this case, pizza) is what he chooses, and often.

This is then followed by an hour or two of self-loathing.

“There’s always the next time!” he told me after his latest indulgence.

12 Mahatma Gandhi Quotes to Inspire You as an Investor

If there’s one person who has seen the greatest amount of dishonesty and corruption right under his nose, he’s none other than Mahatma Gandhi.

Gandhi is mentioned countless times in speeches by Indian politicians, whether the speech is related to economic growth or corporate governance.

This man’s biggest message to the world was that of morality as an important part of life, business, and of course politics. But he is the only one standing testimony to all immoral activities that happen in the highest corridors of power in the country.

Anyways, leaving that aside, I thought it would be a nice thing on Gandhi’s birthday to remind myself (and you) of the inspiration that he served through his teachings.

I Sold Off All My Stocks!

Yes, I did that recently!

I sold off all my stocks without even looking at their prices.

I realized that I had started liking stocks in my portfolio. In fact, my likeness for them had gone to such an extent that whenever I heard negatives about them, I rationalized my decision to hold on to them.

So whenever I learned that, from among my stock holdings, a business was not going to do well in terms of growing its sales in the future, all I did was assume a higher profit growth so that my overall decision – of it being a growth business – remained intact!