Normal Investor Psychology and Theory of KARMA are inversely related In Practice.

 3^rd May 2023

Normal Investor Psychology and Theory of KARMA are inversely related In Practice.

Dear Fellow Investors,

Namaste! What an average Indian have been told from ages and he believes to be true about Theory of Karma is – If you do good karma – you will get good results and if you do bad karma – you will get bad results.

The most funny aspect of the above belief is  that if somebody is in trouble now – he is suffering due to his past life BAD Karma and if somebody is doing good – he is enjoying due to past life good karma. So, normal person believes that whatever he is doing today – will give him result in future or next birth/s. Do you have a guarantee that you will have a next birth?

What is stock market investor’s psychology?

An average investor talks about long term investment. He will say – I am okay to hold the shares for 3-5-7 years or more. Having said this – he will start following the prices on DAILY BASIS / MONTHLY BASIS or QUARTERLY BASIS. If the shares prices do not move – they will start panicking!! They forget all they had said about LONG TERM before they started investing.

Normal stock market investors wants his profits NOW. He is not ready to WAIT.

What is the PARADOX?

Normal Indian mind has no questions about the theory of KARMA but when he comes to the practical world – he is not ready to follow the same. He wants instant results.

If you keep aside the investment area – most people are not ready to wait for anything. The point I am driving is NORMAL HUMAN MIND does not have the capacity to foresee the future and wait for the same. They simply don’t have the capacity to think for the future and wait for the same. 

Warren Buffett invested in BNSF Railway at the age 80 around 2009/2010 - he visualized the scenario of 2050. He knew that he will not be alive in 2050 - but he invested. Now, this is too much  for a normal investors.

What it means for Karma Theory?

What all people are not able to follow – it means something is wrong with the theory of KARMA as we have been told. It has been misunderstood.

Results of all Karma are instant. Nothing is pending in future.  When you do any Karma N number of times in a particular way mechanically, you develop the TENDENCY to do the same Karma in that way NEXT DAY / NEXT LIFE. Just observe yourself the way you eat / drink or smoke. You will have particular pattern or tendency. Let us understand the tendency with the example.    

Try this – you pour a glass of water in one room. The water will move in a particular way towards the slop of the room. The instant result of this karma is room became wet. If somebody passes on this water – he or she may slip and break his bones.  

Now, you close the room and open it the next day. Water would have evaporated by now. But if you see the way on which water has passed has some kind of dust on both the sides. Now, pour another glass of water, and water will take the way of least resistance and pass on the same way. So, water has developed a tendency to pass on a particular way.

Now, open the door the next day and go to some other corner of the room and pour the water. The next day you will see some other way in which water has moved.

Let us assume you are pouring water in 4 corners one after the other on 4 consecutive days – you will have 4 possible ways in which water can move on the 5^th day. If the water becomes continuous on one way for a long time – we will see the stone or surface starts eroding slowly and gradually. The stone will change its shape over a period of time. We see the round and beautiful stones at the river bank thanks to the continuous follow of water on them.

Over the past so many birth’s we have created so many fixed tendencies to react or act.  This tendency is known as Samskara in Indian parlance.

These Samskara gets triggered when the same kind of situations come in front of you. So, you are not suffering from your PAST KARMAS or PAST LIFE KARMAS. You are suffering or ENJOYING from your TENDENCIES.

Knowing above - how SMARTEST of the smart investors invest?

Smartest of the SMART investors also want instant results. They are also not ready to WAIT. Since they are SMART – they apply the principle in a different way.

When they invest – they try to buy below the fair value or below the potential fair value as per the respective business model.

Say they know that particular share has the potential to reach Rs.100, they will try to buy at Rs.10 to Rs.70. So, they get the instant return of Rs.90 to Rs.30 in their MIND.They are okay to see the market price coming down by 50% also, as they have kept the margin of safety.

So, they are also not waiting as per the normal understanding.

What happens to the Normal Investors?

They are not educated in the fine art of investing. They don’t know all the tricks of the trade which really smart guys are following. They just invest without knowing the potential of the business and they measure the performance based on the MARKET PRICE and not the business working.

They are always in SELF INVITED PAIN.

What NEXT?

Whatever you have been told about KARMA / INVESTING is not necessarily correct. If you want to learn and master the correct concepts in the area of Investment and Personal Destiny Management – you can approach us.

Have a great time.

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

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

 

Hitesh Parikh.