“Diamond in the Donkey’s Neck” – Should you seriously invest now or wait?

17^th March 2020

“Diamond in the Donkey’s Neck” – Should you seriously invest now or wait?

Dear Fellow Travellers,

Greetings from Hitesh! Masses always ask common questions at the same time. They think alike. The most important question the most experts are discussing at this juncture is – should you invest at this moment or wait? I too get this question from readers and others. Let me deal with that in my own style.

Diamond in the Donkey’s Neck: -

This is a very old-time story but relevant in the current situation. Must read and understand the conclusions. There was a POTTER who used to go to collect the MUD for making pottery every day on his donkey. There was a beautiful stone on the neck of the Donkey. Potter had got it from somewhere. Since it was beautiful, he tied it on the neck of the donkey.

One day a JEWELER was passing by when the potter was going to collect the MUD. He instantly makes out that this is a precious stone. So, he asked the potter to sell that stone to him. Potter was uneducated and not knowing the real value of the stone. So, he said – Give me Rs. 10. Jeweller thought why not get the same for Rs.5. So, he offered Rs.5. But the potter was adamant and he said I will not sell below Rs.8 at any cost. The Jeweler thought nobody is going to buy from him and allowed him to go.

Next week when they met, the diamond was missing from the donkey’s neck. Jeweler got worried and asked what happened to the stone? The potter said somebody paid him Rs.10 and bought it.

Jeweller got angry with the potter and said you are a fool. You remain with DONKEY so you have also become like DONKEY. That stone was worth a MILLION and you sold it for Rs.10.

The potter said – you are right. I am like donkey only. I didn’t know the value of the stone. But you are a jeweler and you knew the value of the stone – still you did not buy at Rs.8. You are even worse than a DONKEY.

What happens when Market Falls?

Investors, like greedy JEWELER in the above story, wait for the lower price day after day. They want to buy exactly at the lowest price. So, they keep on waiting and the market suddenly changes the directions. When that happens – they curse their luck for not making a decision to buy their chosen stocks. The most pathetic dialogue is – “I should have bought at that time”.

Our scientific solution to your question: -

The jeweler knew that the stone is worth millions and it was available at Rs.10 due to ignorance of the Potter. The same way the market also acts ignorantly when it becomes emotional.

Our categorical advice to all the investors is simple - you must buy the stock – if the value of the stock you want to buy is more than the price you are paying now. If you know that value is lesser than the price – you should avoid it and wait for the further fall.

The main problem with the normal investor is that he is not aware of the process of valuation of stocks. Since he is not aware – he remains in the state of indecision. 90% of the investors are not aware that indecision is also a decision for not taking action.

What NEXT?

You need to equip yourself with the right skillsets for investment success. If you find it difficult to do it yourself – you can take our help. 

"Remember on the DEATH BED – a person is more unhappy for not doing things he could have done rather than doing the thing he should not have done." Read this again.

Have a HAPPY INVESTING.

Follow me on Twitter @hiteshmparikh / WhatsApp - +91-9869425399.

Live With Passion…Invest With Passion.

HITESH PARIKH,

YOUR PERSONAL DESTINY MANAGER.