Warren Buffett’s View on Indian Market – Post AAP Win

11 February 2015

Warren Buffett’s View on Indian Market – Post AAP Win

Greetings from Hitesh! AAP’s win has lead to many discussions across the globe. You would have heard/seen on media. But I am the first to shares with you the first hand report of Warren Buffett’s mind on Indian market post AAP Win in Delhi.

Let me share some of the most forwarded messages on WhatsApp yesterday.

Those who were from Modi side send following messages –

अपनी जीत का इतना गुमान न कर बेखबर, /

शहर मे तेरी जीत से ज्यादा मेरी हार के चर्चे हैं

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Why BJP may want to lose Delhi. This article was written about 20 days ago.
http://gulfnews.com/opinions/columnists/why-bjp-may-want-to-lose-delhi-1.1443516
Interesting read.

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Some of the messages from AAP side said –

“If a pregnant woman can’t delivery in nine months – she is headed for trouble!!”

JADU cleaned up the BJP!!

We forwarded above messages to all our contacts to read the mass mind. We got the most responses of thumbs up for pro Modi messages. In fact, many re-forwarded the same messages to us!!

What to read from these messages?

This is a best example to see how your mind works. You decide something first and then try to find out the supportive logic of that.

e.g. If you come across a beautiful girl of marriageable age – you decide she can be a good wife for your son – now you generate the support by saying – she is from our cast / she is well educated / she is from good family / her father is a reach guy / she is the only daughter / her horoscope matches with our son’s horoscope / both as a couple would look smart.

All the above logic can be helpful to make the decision about marriage. But the problem with the normal mind is that it decides first and uses the above logic to justify his decision!!

(Look at the above messages – the writer has assumed MODI can’t go wrong. He is giving you some media report which talked about why he will lose!!)

How Normal Mind thinks when he invests?

He decides that market is going up – so invest. He decides this company is good and he will find out logic why it will move up ( say Rakesh is buying / FIIs are buying) and he will buy that shares!!

When the same shares goes down – rather than following a stop loss – he will find out reasons to make him believe that somebody is creating the panic in the market so that he can grab all the shares at the bottom prices. So he will ADD more!! He will do average!!

Like Modi, Indian investor is a FAN of Reliance Ind. From early 2008 when the share was at Rs.3000, he was targeting Rs.5000. When share started coming down, he did not sell at Rs.2500/Rs.2000/ Rs.1500/Rs.1100. If you look at all our emails from 2008 till 2011 – we were categorically telling you to get out of that stock!!

But like Pro Modi messages given above – they were finding various reasons for shares to go up. So, they did not follow our messages.

How Mr. Buffett deal with the above issues?

He always sees the facts. He does not stop only at FACTS – he looks at the FIGURES also. These two are the basic ingredients before he even thinks about investing!!

Once he knows the above two – next questions comes – are they important and unknowable or unimportant and knowable information?

Many information’s can be most important – say what will be the inflation in next year / what will be the shares prices after one year / what will be the crude prices after one year / when will you die and things like that.

This information if you know – can make 360% difference in your and your family’s financial fortune!! But all of them are not KNOWABLE. 

At the most, you can make educated guess about them.

Same way some information are KNOWALBE – who won the DELHI election? Who is PM? What is the current price of anything? What was the past prices and things like that? All this information is available to ALL and if you make your investment decision on them, you will go for a toss.

What Next?

In January, NF went up by approx 900 points and in last ten days it has fallen by 500 points!! Do you remember - we were telling you not to miss Fantastic February. Our clients made tons of money while market was falling!!

Making money is the most important!! If you love it – do join us.

Have a Wealthy Wednesday.

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Live With Passion…Invest With Passion.

Hitesh Parikh.