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…because most of us in the stock market, most of the time, do not do investing, which is…
- Thinking how markets work,
- Understanding how other investors behave and why not to behave like most of them,
- Studying businesses,
- Sticking only with what is simple and what we understand,
- Buying stocks at appropriate valuations,
- Owning those businesses knowing they are ‘businesses’ and not just symbols on your screen, and
- Being patient with those businesses and holding on till they remain good businesses.
Instead, we are busy…
- Envying (others making money fast or losing money slow),
- Cloning (others’ stock ideas mindlessly),
- Predicting (future of markets, stock prices, and economy),
- Fearing (missing out on future gains),
- Regretting (past mistakes),
- Avoiding (accepting current mistakes),
- Denying (reality, especially when it’s harsh), and
- Indulging (in useless information and noise)
And if that’s not all, these often lead us to –
- Trading (frequently, which adds to our costs),
- Averaging down (on bad businesses),
- Boasting (about our lucky short-term gains), and sometimes
- Trolling (other investors on social media, who have not performed as well as us in the recent past).
With such a busy schedule, where is the time to practice investing?
Countless wise people have advised us for centuries that to become good at anything, we do not need to always add more things but give up on some of them.
However, when it comes to investing, giving up on everything mentioned above is not as easy as it sounds. All these (mis)attributes and (mis)behaviours make us human (except trolling others), and thus there is no point trying hard to eliminate all of them from our lives at one go.
But if we work towards minimizing these – some starting today, and others over a period of time – we may end up with an outcome better than we had ever imagined.
I would leave you with a couple of quotes, which signify how what we think and do now, help us create our destinies –
Watch your thoughts; they become words.
Watch your words; they become actions.
Watch your actions; they become habits.
Watch your habits; they become character.
Watch your character; for it becomes your destiny.– Lao Tzu
You are what your deep, driving desire is.
As your desire is, so is your will.
As your will is, so is your deed.
As your deed, is so is your destiny.– Brihadaranyaka Upanishad
For good or bad, investing does not follow any other path.
Dear Vishal,
Good article. You have mentioned the correct temperament required to make it good in investing
Regards
Amit
Very well said Vishal. Would love to meet you sometime. We share a lot in common!
Very good article. As always we expect. You are a very good teacher of value Investing. It’s nice to know from you. Thank you!
With regards 😊
Thank you for your amazing advice!
Yep, this was offensive. But I needed it. Thank you Vishal!
Beautifully captured a complicated explanation in a piece of paper. Kudos!
Love your clarity of thought as always! Combine all these factors with the dominance of the attention economy, and we’re clearly screwed.
Stoicism and living through timeless mental models I believe is a therapeutic cure in this environment.
Thank you for your meditation on this crucial subject 🙂
Not only in Investing, those eight are constraints to achieve or become good at doing at anything in life
Volatality is the nature of market just like storms and tides in an ocean. We can’t avoid it. Your article guide us in sailing in the right direction and controlling our emotions.
Thanks Vishal🙏🙏🙏
It’s easy to copy paste.
Look on Twitter to see how many plagiarise and they think are good investors.
It’s hard work to study finance and see how a company works and read between the lines.
To do just a cutting expenses list and tell someone else to invest in ETFs doesn’t make you a good investor or a knowledgeable person. Vast majority likes to copy paste instead to use their brain.
Nice article.
Thanks.
Hi Mr. Khandelwal,
Thanks for the post. It was kind of helpful, however, you mentioned something in there that needs more clarification. PRACTICE !
How does one actually practice? What sort of activities, games, thought experiments etc did you use to practice a particular aspect of Investing?
Any examples would be useful.
Thank you
Rahul Rao
Gurugram
Very well written Vishal….this quote made my day : Watch your thoughts; they become words.
Watch your words; they become actions.
Watch your actions; they become habits.
Watch your habits; they become character.
Watch your character; for it becomes your destiny.
Thanks a lot for sharing your wisdom with Investor community and helping each and every one to become better Individual.
Thanks
Lalit Khurana
Spot on! Must needed dose to keep the noise away. Thanks for posting.
nice article………well explained
Loved it
Absolutely true Vishal. Very good article. In essence, habit of risk analysis and behaviour analysis is required for successful investing. This need to be developed & this article will help in developing this attitude.
Thanks
Well said… Adapt article
Very good article..
Warren Buffett once said, “You only have to do a very few things right in your life so long as you don’t do too many things wrong.” That one quote forms the gist of investing success.
Sau baat ki ek baat
Jaisi karni waisi Bharani
Stock market rewards for patience, temperament otherwise if you try to be over smart it allows u to be so for sometime so that the fall is very
painful