If You Think GREED attracts investors in TEJI towards the market, then you may be wrong

 24^th July 2021

If You Think GREED attracts investors in TEJI towards the market, then you may be wrong

Dear Fellow Travelers,

Namaste! Our posts 27- 9 = 0 was super hit. It’s worth your time if you have not read the same. People liked the explanations. Many times, we have made some assumptions – right or wrong and we continue to believe them without questioning the same. Thanks to wrong assumptions – our performance suffers when we have taken a big bet in the market. Let me deal with one such assumption.

Normal Observations: -

Normal investors run away during the market fall and they come back when the market is at the top. Currently, also we are seeing that market is seeing the highest number of new investors are being added each day. There is a TEJI overall and there is a GREED to earn fast money also. But if you conclude that new investors are coming into the market due to GREED – then your conclusion may not be right.

If you want to become a successful investor – then you must know the TRUTH. What is the TRUTH?

Why do investors come back to TEJI?

You must understand - How society rewards normal people? Say a child passes with a great mark – he gets a good image in the class/school and family. Same guys when joining a good job or business – he gets recognition and appreciation. For all his good work – society or people in your circle rewards you with appreciation.

In the company also – they reward – an employee of the day/month and year kind of award. They are rewarded with good bonuses and increased salaries also.

If you see this journey – they have got an appreciation for their good work from day one. This has boosted their EGO. They believe that they are somebody who can’t go wrong.

What happens when you deal with the Market?

The market doesn’t care for your successful track record in school or career. The market can puncture EGO in seconds. I have seen most of the people are not fearful of losses but they are fearful of their EGO being crashed in the market.

They simply don’t want to go wrong when they come to the market. They want to protect their ego. During TEJI it becomes easy to go right and protect the ego.

How EGO decides whether you want to be a TRADER or LONG-TERM INVESTORS?

Many times, people say they are only long-term investors. When I go a little deep into their thought process – all they are saying is that they can go wrong in the trading but the chances of them going wrong are less in long term. So, in the long term – they will save their ego.

So, in a month / year if a share does not move – they can tell themselves – it’s okay – I am a long-term investor. This kind of thought process helps them to save their face in their own eyes.

In fact, the traders who take the positions for trading will not follow stop loss purely to save himself from being wrong. Many so-called long-term investors have shares which they bought it for trading but could not sell in the profit so they are holding it.

Why EGO centric investments are injurious to your wealth creation?

Market is a collective EGO. Your individual ego will not be able to win over it. It means all the investors will go wrong for sure sometimes or the other. Now, if your focus is on your EGO management – you will miss the financial prudence. Have you seen the shares which you did not sell at 2-5% loss gave you 50%-100% loss in the long term? All these losses are to manage the EGO of being successful.

This is the reason – Buffett has always said – you can’t beat the market always. In fact, Buffett has underperformed the market for the last 13 years. He has also said another secret – “I am okay to hold my company if the market closes for 10 years after my purchase.” So, Buffett kind of investors always focuses on the business model of the company and risk management, not on the price movements. He is assured that if the business is doing well – prices will move up someday.

Rakesh always ends his market predictions with one sentence – I reserve the right to go wrong.

See for the people at the TOP, going wrong is okay.

What NEXT?

Truth is always hidden behind obvious excuses. I have seen the most talented, successful people in their own field fails as an investor and traders just because they are not ready to accept that they can also go wrong.

The challenge is not to go right each time you trade or invest – the challenge is to accept your failures and come back with renewed vigour in the market.

Have a happy investing.

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

 

Live With Passion…Invest With Passion. 

 

Hitesh Parikh.