Role of Courage and Confidence while investing in the Volatile or Down Market?

 8^th March 2022

Role of Courage and Confidence while investing in the Volatile or Down Market?

Dear Fellow Investors,

Namaste! I got many likes for yesterday’s post on how people think. It was a timely post to wake up the people who are carrying on life as routine. Today Market has moved up. It’s a U-Turn or volatile period – only time will tell.

I have seen many investors talk about Guts / Confidence and Courage and they place big bets or take huge positions in derivatives. In fact, when they take a big bet – they call themselves GUTSY. Let us deal with the issue and understand when to use them?

Role of Courage and Confidence while investing in the Volatile or Down Market?

I see tens of confidence gurus in the market talking about giving you confidence by listening to them. They inspire you to have confidence and courage in your day-to-day life and they make you believe that these two are the most important qualities for success. I am sure you would also agree with them and would have paid them their fees for knowing this. I have myself paid LAKHS for the same. The day I learned from them – I realized that what they are talking about is WRONG. I did not agree with them.

Let me share a simple example. Say you are going to office or shop or school or college every day by one road. You come back by evening. But on one day you are coming back in the late night. The road is SAME but due to lack of people around you or darkness or some negative MEDIA news about the loot and rape that happened in the past, you are afraid. You are playing a Whistle / Singing Songs or Chanting name of your GOD.

Now, if you remember your CONFIDENCE GURU and motivate yourself for confidence and courage. Do you think you will feel confident? Not at all.

This confidence and courage are useless and it will not help you much, as the real problem is not of confidence and courage. The real problem is – “YOU ARE NOT ABLE TO SEE THE ROAD due to darkness or no PEOPLE around you”.

During the daytime, you are SEEING the things, which in the night it is not possible. Since you are not able to SEE, there is FEAR. This FEAR can’t be dealt with CONFIDENCE or COURAGE. It can be dealt with just by SEEING.

Confidence and courage are PHILOSOPHICAL subjects and they have come from WESTERN WORLD. West is full of PHILOSOPHY. West has a philosophy of everything and they keep on doing trial and error. Power of Positive thinking / Positive believing / SECRETS and many such theories they have invented. They say – if you believe it, you will see it. Indian SEERS say – if you SEE it, you need not believe!! Our emphases are on EXPERIENCE while their emphases are on BELIEF.

India does not believe in philosophy. We believe in SEEING. Our enlightened masters were KNOWN as SEERS and not PHILOSOPHERS while SOCRATES, PLATO, and many others westerners were PHILOSOPHERS.

How does BUFFETT use COURAGE and CONFIDENCE?

In the fall of 2008, Buffett took a big bet on Goldman Sachs and made tons of money. What he did was not the result of Courage and Confidence? It was the results of the CALCULATIONS first. His calculations showed that this company will survive the crisis and once he was sure about his calculations – he took a massive position.

So, if you want to use Courage and Confidence while investing in the current market or any market – you must have CALCULATIONS first. If they are not supported by Calculations – it is not investing, it is GAMBLE.

Buffett kind of investor does not BELIEVE in anything. They EXPLORE till they reach the conviction and when they are convinced – they take big bets.

How do NORMAL investors invest?

They have a lot of egos. They want to go right. They want to prove to others that they have generated the best return in the shortest possible time.

In their EGO, they conveniently forget the role of Calculations before they take RISK. They are the first to panic when things do not go as per their expectations. They will run from one advisor to another, once they are in soup. I have seen many people losing tons of money but they are not ready to have a good advisor in their team on whom they can bank when things are not going right.

Not appointing an advisor is also an EGO issue. Why the hell I listen to somebody? But they will go to tom dick and harry when they are in soup. They like being taken for a ride. 

What NEXT?

We are very clear from the word Go – we are here to make money and we are here to prove ourselves right. We are open to LEARNING each moment as the market is teaching us something new each moment. We have no EGO.

See BUFFETT has been criticized by Wall Street guys for 100s of times in the last 60 years for missing lot many opportunities. Do you remember the person who criticized him or do you remember Buffett now?

If your first love is making money, then keep aside your EGO and go for Calculations. Courage and Confidence will follow.

Have a great investing.

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

Learn a Lesson. Live with Passion & Invest with Reason.

Hitesh Parikh.