How do we see Indian Investor Performing Now and Going forward? Must read for all investors.

06 June 2018

How do we see Indian Investor Performing Now and Going forward? Must read for all investors.

Greetings from Hitesh! Nifty is relatively up and most of the midcaps and small caps are down by 40-60%. Even stocks of ACE investor like PORINJU, are down by 40-50%. Many readers have asked me to share my latest view on the market. But this time I am going to talk about INVESTOR first. So, here it goes. But let me ask you a simple question say you want a CAR.

Will you buy a CAR or STEAL the same?

I am sure given all the issues post stealing the CAR, 99.9999% of the actual car user guys will prefer to buy a CAR rather then STEALING it. If their budget is low, they will buy SECOND HAND CAR but they will not prefer to steal a car and go through all consequences of stealing.

Normal guys are very clear when it comes to buying the things they NEED or WANT genuinely. They will find out the price, pay it and enjoy their possession with peace of mind.

But when they come to investment field they have 100% reverse attitude.

Paying the price of Investment or doing a theft?

When the same guy come to the investment filed he has also three options. But they like the third one the most. Let us see.

1.  Pay the price.

2.  Find our the less risky asset where return is also low – like buying a second hand car.

3.  Do theft.

Now, let us deal with each of the above.

Pay the PRICE: -

When you invest you have to pay the price in terms of VOLATILITY and UNCERTAINTY. Just to share an example from BUFFETT diary – company called MOSTER BEVERAGES rose 211000% from 1995 to 2016 netting him a gain of USD 90 Bln. But in these 20 years – the stock fell by 50% or more at least 5 times!! Buffett paid enormous mental price to deal with the uncertainty and volatility and that’s why he could make the money. He was reading SEC filing for 12 hours a day sacrificing family life and other social life.

Buffett has learned the investment like anything and he is master in the game but he also has to pay the additional price in terms of mental pressure for volatility and uncertainty.

If you see NORMAL investor they don’t know the game of investment in the first place. They are not ready to learn the same and they want the RETURN like BUFFETT!!

Go for SAFE INVESTMENTS: -

Many guys will prefer to go for BANK FD / POSTAL SAVING SCHEMES and things like that instead of paying the above price.

Go For THEFT: -

99% of the guys like this option when it comes to investments. They want return minus volatility and uncertainty. We have traders, hedge fund managers, delta traders. They use N number of trading strategies to avoid the volatility and uncertainty to make money.

These guys feel that they are getting returns in a ZIFFY, but the fact remains that they have to take enormous RISK in terms of timing the market and events and also related emotional pressures. So, frankly, like the CAR Thief they also must be ready with the consequences of their THEFT. Another aspect of this option is that you must be very AGILE and FAST in taking your decisions  (like a SEASONED THIEF) which normal guys are not trained.

The best CHOICE of NORMAL guys: -

If you see there is a price in all the aspects but some how most guys have fascination for the 3^rd option. They want quick and fast money without paying the price.

How does this apply to the normal investor performance?

Those who follow the first option like PORINJU and other smart guys will wait patiently and add more if they can. They know that this is a passing phase and the best of the market is yet to come.

Second option guys will have little or no effect as they are already settled for second hand options.

The most affected guys are the third option followers. They started with TRADING. They were making good money in trading but with the fall, they did not follow stop losses and now they have become compulsory investors. They are seeing their portfolio is bleeding and they are mentally not ready to accept the same. This gives them immense pain and they blame on their luck or the person who game them the idea. But they will not blame themselves or their mentality for FREE LUNCH.

What NEXT?

Facebook and WhatsApp are free. But just see how they have taken your life for a ride. Your family life and relationships have gone for a toss. There is no free lunch dear. The ideal way is to decide what you exactly want and find out the price for the same and pay the same. So, you are mentally free from the day one.

Wish you great luck in Investments.

Follow me on Twitter @hiteshmparikh or on Whatsapp - +91-9869425399.

Live With Passion…Invest With Passion.

Hitesh Parikh.