Or is it many different worlds….I am not sure!

In the world of ‘investing’ as the media uses loosely, there are many worlds.

One is the speculator who has to buy and sell almost instinctively and almost instantaneously! These people do not always make profits. However given a good broker, good advice, and some leverage….these guys make some profits during the year.

The second is the ‘trader’ who does take delivery, but trades quite fast – maybe a buy on Monday will result in a sale on Thursday if it is not already sold on Wednesday….this category makes some money, but not much.

The third is the investor who analyzes the balance sheet, takes calls on companies etc…and in the long run makes tons of money.

The guys in the third category have to possess good stock picking sills – needless to say tremendous amounts of patience…this group is less than 2 percent of the market transactions.

The media caters to the first two categories only….now you know why it is difficult to watch television and invest 🙂

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  1. I completely agree with you. The media just over hypes things on just buying and selling. Even if there is something for the investor it goes unnoticed.

  2. Who r the people who come on these shows….. representatives of brokers /brokers . When do they make money? when clients buy and sell….. more brokerage if it happens more frequently….
    Who cares about the investor ?

  3. Very true and that’s the nature of the market.

    I remember some time back u did a post on luck or something of that nature where you gave the example of a legendary tennis player and how he explained how many people start playing tennis, how many go on to be professional and then how many go on to win grand slam etc etc…

    There is a very eerie resemblance to that story here too. Lot many start investing in the first category, few graduate to the second category and like you said only 2% are left in the third category. It’s lonely world at the top, isn’t it ? he he he 🙂

    But i don’t think media should take the entire blame. There is some blame to be taken by the audience too. Depending on how many people are only interested in price target based kind of investing and how many are interested to hear what the management has say about how the business runs.

    Regards
    Raja

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