Review of Our Diwali Message.

Sunday, November 06, 2011.

Review of Our Diwali Message.

In our last email Dt.10^th Oct., A New Way to Celebrate Diwali, we had categorically told you … Do Investments While All (Others) Liquidate. Since then, Nifty Future has moved from 4902 (on 10^th Oct.2011) to 5402 (on 28^th Oct.,2011), a gain of 500 points or 10%. BSE Sensex Moved from 16230 to 17908, a gain for 1678 points or 10%. The point is….How many of you have taken action and did investments? If you have not done investments….Why?

How To Understand This Irrational Behaviour?:-

The perfect market theorist claims….market is perfect and all information is available to all the participants. But Warren Buffett and other smart investors know that market is imperfect and my experience of last 20 years also indicates the same. If all investors are rational, they should invest when market is down and sell when market goes up….however, very few can do this and all of them are super successful.

Shahbuddin Rathod’s Way to Explain This Behaviour:-

The famous Gujrati Humour Artist always tells a beautiful story of a Darbar (a local of Rajkot). He was boasting of his aiming skill. Once he was asked to prove his skill….So, he said he can kill two birds with a single bullet. He took an aim to two birds and shot the gun. He declares that he killed them. But suddenly those two birds started flying….he said….Miracle….Miracle….Died birds are flying ! He is not ready to accept that he missed the shot!!

Moral of the story……when bull phase starts in the market….most of the analysts talk about the bear pull back, FII buying, operators game bla…bla…bla. When the market goes up…..they realize that they had missed the bus.

What Is Our Approach?

Our approach is simple. we take four simple steps….

First we ask 3 questions…..

1. What we want from the market…today, tomorrow, in a week, in a month, in a year…in a life time?

2. How we can get the same under given market situations.

3. What is the price to be paid in terms of money and time?

Now, we take action to pay the price in terms of money and time.

4. We enjoy the benefits of Return on our investments.

We do not focus on any other details. I assure you that if you also take these four steps…..coming year will surely bring prosperity to you.

Wish You All A Very Happy & Prosperous New Year.

Thanks for reading my email and await to hear from you.

Live With Passion…Invest With Passion.

Hitesh Parikh.