Wealth creation topics only
I get a lot of mails – on my blog, on facebook, and of course on subramoney.rich@gmail.com asking me to write on:
– borrowing, loan consolidation, student loan consolidation, bankruptcy, ….
-smart spending,
– trading – in equities and debt, commodities, gold, silver, etc.
– futures and options, hedging,
– market timing
etc.
My response has always been that I do not know these topics. Frankly equity trading is something where I have seen more people lose money than gain money. Thanks to about 30+ years experience as a sub-broker, broker, investor, trader (for self and clients), – and other roles, my views are perhaps a little strong! I have seen 30-40 traders who have made a few crores in trading (yes 30-40, and crores both figures are correct) but I have seen at least 2000 people who have lost. Common thing to the guys who have made money are:
1. Have a fantastic adviser / broker
2. Have tremendous discipline, and know what they are doing
3. A few of them trade in world markets: no clue how their wives tolerate them. One guy has his computer (net and charts) ALWAYS ON, his phone always on, and keeps tab of US, UK, Singapore, Australia and Japanese markets. Try doing it for a week, and you will die of insomnia. He has been doing it for too long.
4. Almost all of them have a notebook in which they write what they do.
5. All of them can laugh at their own mistakes, analyse their mistakes, change strategy and have a fantastic common sense.
6. A couple of guys have doubled their money year on year for 5-7 years. This is not funny, it is amazing.
7. All of them lead a simple life. Do not take holidays for more than 3-4 days, and even if they are entertaining, they have on ear to the ground.
8. All of them are now trading for a kick – even if they stop earning they can continue the same lifestyle for the next 200 years without worrying.
9. 2 of them have investments ONLY in debt and real estate. All their risk taking is in their trading. In other asset classes, they do not like volatility. The real estate has appreciated far beyond their dreams – but it does not make changes in their life style.
Regarding topics like smart spending, hedging, market timing etc. I know so little that I could write it on the back side of a B E S T bus ticket. Not sure if it still carries an ad or it is blank. L O L.
anush
facts are stranger than fiction
SR
Nice traits of successful investors mentioned by you, thanks.
Reetam
Agree with all, doubtful about this one: “All of them are now trading for a kick..”.
People need discipline and immense self-control if they aspire to grow their money as a trader, period.
I doubt that people who are sucessful as a trader will be trading for “kicks”. When you trade for thrill, more often than not it will lead to overtrading, revenge-trading, and eventually ruin.
A consistently profitable trader need to be much much more disciplined and alert than investors as the margin of error in the trading profession is razon-thin.
Subra, your comment please.
prabe
Subra,
This post might make people with lot of greed to attempt and become that one of 30-40 .They will never think about probability and other points mentioned.
All they will only see is these points from you post
– A couple of guys have doubled their money year on year for 5-7 years. This is not funny, it is amazing.
– All of them are now trading for a kick – even if they stop earning they can continue the same lifestyle for the next 200 years without worrying.
Abhisek
Leave traders have you seen many successful individual investors investing directly in equity.. Buying at right price,Holding for long term and making huge by selling?
Even the SIP mutual fund route is not gold standard…I had some mutual which gave me fantastic return for a year.. And then continued loosing money for years.. I have a feel mutual fund is risky business as well.. More risky as you pay a constant fee and depend on another persons choice for performance.
Equity can make you money in cycles..if you can wait for Market crash (2008) and then sell on euphoria.. Timing is the challenge.
subra
i have seen many..many people creating wealth through equities. In fact it is the best asset class. One friend who considered his 3 memberships at BSE worth Rs. 6 crores, finds it is worthless. Investing in the 60s, 70s – mnc IPOs, then tech, some evergreens…etc. I have seen people’s net-worth reaching the stratosphere. So no doubt about ‘time in the market, not market timing’ is easy to believe!
Prabe:
if greedy people read my blog, more power to them. If they change, great. If they do not, greater. Nothing I can do.
Reetam
none of these guys will come to the front, but each has some fantastic techniques and do trade. However the earnings from trading has been reduced to say 10% of their total income, so the risk taking capacity is not an issue.