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The Internet is brimming with resources that proclaim, “nearly everything you believed about investing is incorrect.” However, there are far fewer that aim to help you become a better investor by revealing that “much of what you think you know about yourself is inaccurate.” I am beginning this new series of posts on the psychology of investing, where I will take you through the journey of the biggest psychological flaws we suffer from that causes us to make dumb mistakes in investing. This series is part of a joint investor education initiative between Safal Niveshak and DSP Mutual Fund.

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Why oh why are human beings so hard to teach, but so easy to deceive.

~ Dio Chrysostom (Greek philosopher and orator, 2nd Century)

Success in investing doesn’t correlate with I.Q. once you’re above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.

~ Warren Buffett

Anne Scheiber was 51 years old when she retired from her job as a low-level auditor from the American Internal Revenue Service in 1944. She never earned a salary of more than $4,000 per year, and although she was an exemplary worker, she never received a promotion. Maybe, because she was a woman and a Jew, the lots that were discriminated against in the workforce in general in the west during that period.

[Read more…] about The Psychology of Investing #1: Conquering the Investor’s Worst Enemy

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On a cold morning in 1931, in a small town in the US, a seven-year-old boy was playing with a young girl when they were unexpectedly attacked by a stray dog. Tragically, the girl was bitten, contracted rabies, and succumbed to the illness. The boy, miraculously, emerged unharmed.

This boy grew up to be known as Charlie Munger. Yes, you read that right.

Reflecting on this incident later in life, Charlie pondered and said, “That damn dog was three inches from me. All my life I’ve wondered: why did it bite her instead of me? It was sheer luck that I lived and she died.”

[Read more…] about The Silent Force Driving Success in Life and Investing

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I was at a friend’s place recently, and since we are in a bull market, and against my wish, we got down to talk about investing.

As I had expected, most of the discussion was around what the markets have done in recent times, and where they are likely to go after the new government gets down to work. I tried to move the conversation towards long-term investing, but was pulled back again and again by things that worry people in the short term. And that led me to think about this post about, well, a few things you should not care about as an investor.

Let’s dive right in.

[Read more…] about 5 Things You Should Not Care About as an Investor