Markets Humble Everyone, Whether You Agree or Not

Atiker

Active member
#1
Markets do humble everyone.

Some get dejected and leave market for ever.
Some stay and become risk averse.

Don't you get deja-vu feel when newbies flying on their latest equity conquests go on cloud nine and give expert opinion and targets on shares ? Wishing them that they don't go overboard and hurt themselves ?

Markets do humble everyone. It is just a matter of time.

Don't you agree?
What was your humbling moment?
Why don't you share your or others such moments, it will be a learning exercise for all of us.

ps: I will share mine soon ;).
 
#2
Markets do humble everyone.

Some get dejected and leave market for ever.
Some stay and become risk averse.

Don't you get deja-vu feel when newbies flying on their latest equity conquests go on cloud nine and give expert opinion and targets on shares ? Wishing them that they don't go overboard and hurt themselves ?

Markets do humble everyone. It is just a matter of time.

Don't you agree?
What was your humbling moment?
Why don't you share your or others such moments, it will be a learning exercise for all of us.

ps: I will share mine soon ;).
Can't agree more :)

Back in 2007, just after a few months of first tryst with equities and portfolio was up some 70% based on real estate stocks like Ansal Housing jumping more than 100% in a matter of months.

Back in those days till early Jan 2008, doubling your money in the markets was child's play :D.

And boy when the bears came :).

On hindsight I feel it is essentially better to experience a harsh bear market very early in your investing journey.

Bear markets are real test of character, if you can survive there you will sail through in bull phases.
 

Alchemist

Administrator
Staff member
#3
On hindsight I feel it is essentially better to experience a harsh bear market very early in your investing journey.
It's even better if one also experiences a sideways market early.

It is essential to understand that there sometimes markets can remain where they are, for months or even years.
 

San Yad

Active member
#4
I just understood and experienced that patience and selection of stocks are more important.

Take any large cap stocks. Most of them always give return if you are patient.

Even you entered at a reasonable price (not the bottom) still you will get return if you have patience.

Happy Investing !
 
#5
Bear markets are real test of character, if you can survive there you will sail through in bull phases.
Sounds like what they say about test cricket, vs other formats.

On hindsight I feel it is essentially better to experience a harsh bear market very early in your investing journey.
A bad first experience could also very well scar badly enough to deter people from venturing, for a very long time.

I always think my affinity for the markets came from the lucky first bet I placed on ICICI Bank back in 1998. Without knowing anything about balance sheets, dividends, EPS, market share etc I just bet on it because Kamath was an excellent performer (according to a business magazine). Had that first bet tanked, it'd have taken me a long time to consider equities again.
 
#6
The Market is to a trader what the ocean is to a surfer.

To an investor however, the market is just an interface, to buy into businesses at appropriate prices.

The individual has to stay rational amid chaos or irrational exuberance or extreme pessimism,stocks don't care that we own them.

Trading and investing have their own sets of challenges, it depends on the person engaging in either to develop the skills in congruence with their own personality.

Now coming to my own mistakes, I have had too many, from over-trading to buying junk stocks and not letting my winners run etc., but fortuitously I am still thriving.

The market has changed a lot over the years but "The more things change, the more they tend to stay the same",the market offers all kinds of opportunities,it is up to us to find them.

Finally I would also say that circumspection is essential while approaching any 'opportunity' because there will always be a 'sucker' and "If you don't know who the sucker at the card table is, it's you."
 

Atiker

Active member
#7
because there will always be a 'sucker' and "If you don't know who the sucker at the card table is, it's you."
:) Good one, liked your quote.

Adding to that - you never know you may consider other to be a sucker and the other may think you are.

Can anyone describe in detail what was going through their mind when they were making the mistake, what was the mistake and what was the lesson learnt?
 
#8
Can anyone describe in detail what was going through their mind when they were making the mistake, what was the mistake and what was the lesson learnt ?
How does one define a mistake?

There is no right answer, you could buy a 60 PE stock and make a ten bagger, would it be a mistake?

Or you could end up buying something cheap that stays cheap, and as soon as you sell goes up 20 times in an year, would that be a mistake?

All this would depend on your own thought process, why you pick a stock to buy or sell and how you think the underlying business will shape up.

At the time when one makes an investment or takes a trade, I am sure everybody thinks they'll make money. As it is said "everyone has 20/20 vision in hindsight."

It is more important to control your emotions (impatience,desperation,greed,fear etc.) that can lead you into making an error in judgement, if you can train your mind you'll be better at navigating the twists and turns of the market.

I would like to ask you some questions:

What is risk and how much risk can you take or can you afford not to take any risk?

How does one account for the risk of the unknown and unknowable, the events or consequences of those events that we have no clue about?

Are Central banks manipulating the market?

How does it make you feel when you have no control on the outcome?
 
#9
I just understood and experienced that patience and selection of stocks are more important.
Quite true, what I have realized over the years that we should put more emphasis on picking good stocks with solid earnings and future growth backed by sound and honest management.

Bothering too much about timing the purchase is hardly beneficial.

Even though the markets haven't moved anywhere between 2007-2012 there are individual stocks which have jumped 10 times.

A bad first experience could also very well scar badly enough to deter people from venturing, for a very long time.

Had that first bet tanked, it'd have taken me a long time to consider equities again.
Definitely, but when people do come back they are much more rational and stripped off their irrational exuberance.

Having seen the bottom and harshness of a bear market, it instills a sense of calm confidence to take things as they are. As Atiker says, it humbles everyone.

And that goes a long way in long term wealth creation, very often even if we don't realize.
 

paran

Active member
#10
My experience is as below:

I started somewhere around 2006 from that date to till today my "overall" gain is negative. Actually if I would have kept my money in FDs I would have got much more compared to my losses today.

I gained something from good ones and lost more in junk ones. Before I sold the good ones and held on to the junks, so my losses widened so big.

Some of the changes I have made recently to myself.

Don't spend too much time on reading financial related sites. This itself makes me to aviod buying stocks as there will be lot of suggestion with a tag attached as low PE, high growth, attractive bet etc.

Before I never made any proper documentation of overall profit/loss. Always under assumption that I made profit before so my overall loss is not what it looks like today. But the truth is even worse :stoned:

Now I am at the stage of protecting capital is more important than the profit. Overall return from debt around 8% is much better than loosing the capital.

Before I was thinking that I am making good picks but I realized that my picks are not that good based on the returns. So I moved to MFs now.

If at all I made a decent profit, that is always from L&T only. As of now my idea is that I would continue to play with L&T.

Only go for Large caps as I have burnt too much in mid/small caps.

Now I think that if I am able to make 10~12% compounded return that is much better whereas before I always look for ideas of doubling money in 6 months or 1 year time period. What a funny thinking :D
 
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