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You are here: Home / Archives for Investing Behaviour

Investing Behaviour

Long Term Investing in the Age of Small Attention Spans

December 16, 2019 | 24 Comments

My 8-year-old son Chaitanya, like most kids his age, paid little attention as I showed him how to make a paper elephant for what seemed like the hundredth time. I said, “Fold the paper into half, then fold here, and then here.”

As I was talking, he kept looking at everything except at what I was doing. He fidgeted and played with his pencil. I kept pulling his attention back to what we were doing and my constant refrain was, “Pay attention!”

Ultimately, I lost my patience, and moved on to reading a book.

It’s not that Chaitanya is uninterested all the time. He is completely focused when he reads his favorite books, or when he is playing with his Lego blocks. But at other times, asking him to focus is an exercise in frustration.

Now if you think kids with their terribly short attention spans are tough to deal with, consider this. In 2000, the average human attention span was 12 seconds i.e., we could focus on any one particular thing just for 12 seconds before being distracted or allowing our minds to wander. If you think that was terribly low, please note that this number has now fallen to just eight.

When I look back to that time when I lost my patience on Chaitanya and moved onto reading a book, I realize that I was onto a second book in the next five minutes.

[Read more…] about Long Term Investing in the Age of Small Attention Spans

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

September 21, 2019 | 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.”

[Read more…] about How to Win At Investing (And At Anything in Life)

5 Ways to Destroy Your Wealth

September 20, 2019 | 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.

[Read more…] about 5 Ways to Destroy Your Wealth

Of Ben Graham, Investing, and Eternity

September 12, 2019 | 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.

[Read more…] about Of Ben Graham, Investing, and Eternity

Why Most People Will Never Be Good at Investing

August 7, 2019 | 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? 🙂

[Read more…] about Why Most People Will Never Be Good at Investing

Stock Market Crisis: Your Big Questions…Answered

July 29, 2019 | 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.

[Read more…] about Stock Market Crisis: Your Big Questions…Answered

The Risks of Speculating During Rising Markets

May 9, 2019 | 13 Comments

It was sometime during late 1999 through early 2000, near the peak of the dot-com bubble, the legendary George Soros and his hedge-fund team were working on how to prepare for the inevitable sell-off in technology stocks.

The man in charge of Soros’ high profile technology funds was Stanley Druckenmiller – one of the best-performing hedge fund managers of all time, till date – and he was busy warning his team that the sell-off could be near and could be brutal.

As the markets soared further in March 2000, Druckenmiller was quoted as saying, “I don’t like this market. I think we should probably lighten up.” Soros himself would regularly warn his team that tech stocks were a bubble set to burst.

Despite this, when the sell-off finally did begin in mid-March 2000, Soros Fund Management wasn’t ready for it. His funds were still loaded with high-tech and biotech stocks. Just in five days, starting 15th March, Soros’s flagship Quantum Fund saw what had been a 2% year-to-date gain turn into an 11% loss. By the end of April, the Quantum Fund was down 22% since the start of the year, and the smaller Quota Fund was down 32%.

Post that, in April 2000, Soros said at a conference, “Maybe I don’t understand the market. Maybe the music has stopped, but people are still dancing.”

[Read more…] about The Risks of Speculating During Rising Markets

My Talk at Value Investing Summit, Kuala Lumpur

February 15, 2019 | 4 Comments

I recently spoke at the Value Investing Summit in Kuala Lumpur, Malaysia. My topic was ‘The Path of Successful Investing.’

Click here to download the presentation.

Click here to watch the video of my talk, or watch below.


P.S. In the talk, I quoted Peter Bernstein’s book Against the Gods as containing the story of the hedge fund LTCM. It was a mistake! The book that chronicles the story of LTCM is Roger Lowenstein’s When Genius Failed.

Statutory Warning: Nothing in my talk should be construed as investment advice to buy or sell shares. Please make your own decision, as blindly acting on anyone else’s research and opinions can be injurious to your wealth. My analysis may be biased, and wrong. I have been wrong many times in the past. I am a registered Research Analyst as per SEBI (Research Analyst) Regulations, 2014 (Registration No. INH000000578).

Wall of Ideas

February 12, 2019 | 62 Comments

Welcome to Safal Niveshak’s Wall of Ideas, where I present hand-drawn illustrations of a few thoughts on investing, learning, decision-making, and living.

The permanent home of these illustrations lies here, where all my future updates will happen.

If you like what you see below, please share your love in the Comments section of this post. Also, please share your ideas for future such illustrations.

Sharing the illustrations socially – Twitter, Facebook, LinkedIn, etc. – would also help spread the word. Thank you!
[Read more…] about Wall of Ideas

The Untold Story of A Self-Made Investing Millionaire

January 21, 2019 | 6 Comments

In a world dominated by men, here is a rare untold story of a woman who quietly made it big as a stock market investor.

Anne Scheiber was 51 years old when she retired from her job as a low-level auditor from the American Internal Revenue Service in 1944. She never earned a salary of more than $4,000 per year, and although she was an exemplary worker, she never received a promotion. Maybe, because she was a woman and a Jew, the lots that were discriminated against in the workforce in general in the west during that period.

As per the executor of her Will, Benjamin Clark, Scheiber, who was already investing her small savings in the stock market when she retired in 1944, started here post-retirement life with a portfolio of about $21,000. Adjusted for inflation, that was about $297,000 in today’s money. Not really a large sum to retire in the US.

[Read more…] about The Untold Story of A Self-Made Investing Millionaire

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