Now that you have heard about a few of my mistakes, let me tell you more! So here it is:
It took me about 20 years of being in the markets to realize that understanding markets is difficult if not impossible. It is not the first few trades that make you confident – it is the bigger trades that you get wrong that teach you the cost of overconfidence. Luckily my guide in the markets is a relaxed man and he taught me to control my impatience. In the current market he held me back from selling Hindustan Oil Exploration at 195 – I ended up selling portions right from Rs. 325 right up to Rs. 395. I was happy selling Ashok Leyland shares at Rs. 40, he held me back – the price is now Rs. 57. Similarly he got me to sell Tata Tele (M) at 34, and in the same week got me to buy Bharti @ 278. My overconfidence on being ‘able’ to understand the ‘Cores’ problem and ‘JLR’ problem would have meant selling Tata Motors @ 200 and Tata Steel @ 400. I held back.
Reading Research Reports:
Once upon a time long long ago I used to make Research Reports. This itself made me skeptical about research reports and I had a healthy cynicism for research reports unless I knew for whom it was made :). For a merchant banker of repute we had made reports with a ’90 day view’ and a ‘1000 day view’ on some companies. So if somebody thrust a report on my face discounting it had become a habit. However there are times when big brand research tends to push you over. My broker has kept me from leaping to buy shares – simple when I get a report I delete. What I need to buy or sell comes from my adviser, not from the ‘free’ websites – sorry valueresearch, value notes, Bloomberg, MorningStar, myiris.com, Economic Times – free is really expensive, so says my brain.
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