Confession first : In the last 15 months of my ‘sensex’ual relationship, I have not been a direct beneficiary of Stock market movements (by direct I mean monetary).
However, I am convinced it is the most wealthy & realistic information space. There is no bigger/larger landscape to increase knowledge and more importantly one’s understanding of how world really works.
Though money-making (for the sake of clarity, returns in excess of 30% per annum) might not be the only goal, it is a necessary (if not sufficient) measurement criterion. What follows now is a list of variables that I encountered during my relationship.
1. Social skills – network of other invested / interested friends who have links with the “real” players of stock markets. Here you would hear words like “sunitha textile ka tip hai, 25 taka 4 din mein”, “agley hafte aksh optifibre mein chaabuk lag jayega”
I think: Good option. As does not suffer from the drawbacks of half-baked knowledge which comes out of options below. You make good friends in the process.
2. Clairvoyance - Knowledge about future (either with partial data or mostly without any). Future positions, open interests, Call and put options.
I think: Is always deceptive and dependent on present understanding of future.
3. Psychological skills - Patience (the GNR style), Guts (Lance Armstrong style), Risk-appetite (LN Mittal style)
I think: Indispensable skill sets. You can’t make money without these.
4. Broad geo-politico-economic-socio trends – for instance per capita shaving gel consumption, better rains in Kerala, Drought in Kenya, Ethanol, etc and their effect on your portfolio.
I think: Most fascinating of the lot. Has wisdom of 100 “freakonomics” built into it.
5. The experts / brokerage houses – here you would here terms like “short-term target, its’ a trading stock not an investor stock, this sector is out of fashion, looks over-valued even at FY’08 earnings, I am still long on nifty.”
Broadly these guys are of two breeds
a) Analytical experts–Think chart patterns and numbers are panacea for all. Overflowing with words like strong resistance, trailing stop loss, bottom-formation, 3 inverted U chart formation etc.
b) Company fundamentals – basics & long-term pointers towards a company in terms of its sector, management, Financial ratios.
I think: Defies a basic logic, why would anybody help you make money? Always listen to them with twice caution.
6. and finally, the over-whelming FATE. Most convoluted problems in India have been found to have solutions here.
I think: Ever solacing reason. “Samay se pehle aur bhagya se adhik“ -. kabhi nahi, kuch nahi. The € (or the error term) of the multiple-regression equation. But sometimes plays bigger role than all the above put together.
However, I am convinced it is the most wealthy & realistic information space. There is no bigger/larger landscape to increase knowledge and more importantly one’s understanding of how world really works.
Though money-making (for the sake of clarity, returns in excess of 30% per annum) might not be the only goal, it is a necessary (if not sufficient) measurement criterion. What follows now is a list of variables that I encountered during my relationship.
1. Social skills – network of other invested / interested friends who have links with the “real” players of stock markets. Here you would hear words like “sunitha textile ka tip hai, 25 taka 4 din mein”, “agley hafte aksh optifibre mein chaabuk lag jayega”
I think: Good option. As does not suffer from the drawbacks of half-baked knowledge which comes out of options below. You make good friends in the process.
2. Clairvoyance - Knowledge about future (either with partial data or mostly without any). Future positions, open interests, Call and put options.
I think: Is always deceptive and dependent on present understanding of future.
3. Psychological skills - Patience (the GNR style), Guts (Lance Armstrong style), Risk-appetite (LN Mittal style)
I think: Indispensable skill sets. You can’t make money without these.
4. Broad geo-politico-economic-socio trends – for instance per capita shaving gel consumption, better rains in Kerala, Drought in Kenya, Ethanol, etc and their effect on your portfolio.
I think: Most fascinating of the lot. Has wisdom of 100 “freakonomics” built into it.
5. The experts / brokerage houses – here you would here terms like “short-term target, its’ a trading stock not an investor stock, this sector is out of fashion, looks over-valued even at FY’08 earnings, I am still long on nifty.”
Broadly these guys are of two breeds
a) Analytical experts–Think chart patterns and numbers are panacea for all. Overflowing with words like strong resistance, trailing stop loss, bottom-formation, 3 inverted U chart formation etc.
b) Company fundamentals – basics & long-term pointers towards a company in terms of its sector, management, Financial ratios.
I think: Defies a basic logic, why would anybody help you make money? Always listen to them with twice caution.
6. and finally, the over-whelming FATE. Most convoluted problems in India have been found to have solutions here.
I think: Ever solacing reason. “Samay se pehle aur bhagya se adhik“ -. kabhi nahi, kuch nahi. The € (or the error term) of the multiple-regression equation. But sometimes plays bigger role than all the above put together.
