How beliefs are shaped in Investing by your Culture?

 

7^th April 2021

How beliefs are shaped in Investing by your Culture?

Dear Fellow Travelers,

Namaste! I often hear some of the most repeated believes while dealing with investors. I am just listing them for your reference and review. You can add many more to the list.

1.   Don’t put all eggs in one basket.

2.   Diversification is insurance against volatility.

3.   God created the universe.

4.   There is nothing like God.

5.   Stock market is a game of luck.

6.   Mutual fund is the most suitable for small investors.

7.   Market price is a true reflection of Company’s Intrinsic Value.

8.   You can make money in the long term only.

9.   You can make big money by shorting the market only.

Just look at your daily behaviour from the time you get up to the time you go to bed – 99% of your actions are taken by your routine belief system.

A normal person does not challenge their beliefs until they hit the wall of crisis in their life. Today I am sharing with you an experiment undertaken on Monkey and how the belief is created without experience.

Story of 10 Monkey’s and how their Belief System was created?

As a sociological experiment, 10 monkeys were placed in a large cage. High up at the top of the cage, beyond the reach of the monkeys, were a bunch of bananas. Underneath the bananas was a ladder leading to the bananas.

The monkeys hadn’t been fed for 12 hours and were extremely hungry. The monkeys immediately spot the bananas and the strongest begins to climb the ladder. As he does, however, a slight electric shock keeps him from ascending the ladder. At the same time that the monkey climbing the ladder gets a shock, the other monkeys on the floor are sprayed with water. The monkey on the ladder scrambles off and all 10 hungry monkeys sit for a time on the floor.

 

Soon, the temptation of the bananas is too great and another monkey begins to climb the ladder. Again, the monkey is met with a slight electric shock as well as the other monkeys being sprayed. Over time, the monkeys learn not to go up the ladder.

 

Now one monkey is removed and a new monkey is introduced to the cage. Spotting the bananas, he heads towards the ladder. The other monkeys, knowing his intention, cut him off and beat him. A second monkey is removed; he is one of the original 10 monkeys and is replaced with a new monkey. Again, the new monkey heads towards the ladder and, again, the other monkeys cut him off and beat him – including the monkey who had never been up the ladder.

 

By the end of the experiment, none of the original monkeys were left. Despite none of them ever experiencing the slight shock, they had all learned not to climb up the ladder for the bananas.

 

The same thing is applicable to ALL OUR BELIEVES. We are believing in something or the other without having any prior first-hand experiences.

 

How smartest of the smart operate in the life and investments?

 

They are institutively aware of the monkey system of Belief prevailing in the society and culture. So, they focus on EXPERIENCE and EXPLORATIONS on their own. They go by their own experiences and open-minded explorations. They are not tied up to some old concept just because it is said by some great person or their religious books.

 

It was a notion that you can’t have a mobile without Key Pad. Steve Job challenged that belief with mobile with touch screen and see the world changed after him. History books are full of such examples.

 

Your success will depend on your eagerness to have first-hand experiences in any field without any preconceived notions.

 

Invest with an open mind.

 

Follow me on Twitter @hiteshmparikh and join me on WhatsApp on +91 986 942 5399.

 

Live With Passion…. Invest With Passion.

 

 

Hitesh Parikh