This post was most recently updated on July 31st, 2018
“I hate weekends because there is no stock market.” – Rene Rivkin.
Exact opposite to above quote happens to us in life. We hate weekdays because we have to work.
It’s been 2 years I have started investing in stock market. during these times, I have made a lot of profit, big losses, made excellent choices and also made the worst choices.
Graphs like this disappoint us.
While graph like this excites us.
However, this same excitement and fear traps people. In search of potentially high returns, they start buying stocks in huge quantity and then suddenly after they buy, stocks start to fall.
Same happens with us in life. We do something because others tell us it’s nice to have and as soon as we buy it or spend time with a person, we begin to blame our foolish decisions.
What I have realized by now is that the way we behave in a stock market is the same way we behave in routine life and most of out stock market behaviors are derived from our life.
the exciting part is that what takes us lifetime to learn in life can be learned in just few months or few years in stock market.
Hence, if we apply the strategies we learned in stock market in life, it can work wonders for us. What are they?
Don’t blame others when it’s your mistake.
Often we blame others when we make a big loss in stock market. There is market to blame, your broker, tip giver who can be a person appearing on TV, your friend or your broker. But the question here is this. Why the hell did you hear them without doing your own research?
When we make foolish decisions in life like trusting the wrong person, spending money on things we shouldn’t have or selecting the wrong product which costs us heavy, we blame others.
The lesson here is to always do your own research before doing anything and blindly accepting anyone’s advice. What worked for them might not work for you.
Do not use shortcuts.
Everyone loves shortcuts.
What happens when a thief is caught red handed while trying to get money via shortcut?
What happens when you are hit by a vehicle when you are trying to use the wrong side by shortcut?
What happens when you avoid maintenance of your equipment and that equipment suddenly stops when you most need it?
What happens when you ignore exercising your body till 60 and always choose comfort as your shortcut?
You know the results right?
There is a specific group of people in stock market targeting those who want shortcuts. They are always ready to give tips. In life too, we are influenced by people around us to take shortcuts. For a while, they seem a better option but no one ever became successful by doing it for life.
You will not remember a single trader who is rich. Whereas we all know Warren Buffet, Rakesh Jhunjhunwala, Dolly Khanna, Vijay Kedia and many more investors who did not use shortcuts.
Income and learning are proportional to each other.
When we look at our bank statement and feel frustrated by the lack of money, we should look at our learning first.
How often are we learning new things, industry specific updates, latest in demand skills and other prerequisites?
Same is with stock market. We never invest our time in learning the fundamentals of stock market and immediately jump into it hoping to win big. It rarely works.
However, if consider value investing and understand the business well, we might increase our chances of profit and minimize the losses.
Rather than blindly following the crowd, if we just learn one new thing daily about our field, we would be ahead than 95% of people out there. This is the magic of learning.