Is there any similarity between running and investing…well a few for sure.
Investing is normally for a long term – as is running. The shorter form is called trading and among runners it is called sprinting. So when a runner says he is a short distance runner – it means he runs 100m (sprint) to a distance of about 5km. The 10km run is neither here nor there!
The long distance runners run for long distances like the half marathon (21km), Full Marathon (42km), Ultra marathons,……etc. There are races where the distance, weather, etc are unbelievable – almost out of the world.
Now let us look at running….It has many new teachers who have either discovered newer methods of running, training, eating, resting etc. which allows you to run longer distances. These include forms like Chi running, heart rate based running, – these reduce the pressure on the heart while working on the same set of muscles as ordinary running. This ensures that the body burns the fat more efficiently – thus helping the runner run for long distances.
Now in case of investing too, PRESERVATION of capital is very important. After all if there is a boom in the markets and YOU have no capital, there is no way how YOU will ride the boom. Running out of capital and running out of energy to run are both disastrous. Warren Buffet sums it up well when he says ‘To be there first, you have to first, be there’. So being alive, having the energy to run, the money to invest are a MUST for capital creation and growth.
The trader on the other hand is like the sprinter. The sprinter runs in a way very different from the runner. He runs and lands on his toes (unlike the runner who normally prefers a mid foot strike), he spends some time warming up before the gun shot, he does not worry about burning fat – he is running an aerobic pace. Trading like sprinting requires a lot of patience, speed, learning, making notes, and a quick reaction.
We can clearly see that both the sports – running and sprinting look alike, but they are different. In an exactly similar manner Investing is for the long term and has different things to learn and train for – value investing, asset allocation, portfolio averaging, calculating the moving average and standard deviation while evaluating returns…Trading on the other hand expects you to know – trend lines, stop loss, moving averages and charts.
Make no mistake running and sprinting requires a lot of training – and all participants benefit having a coach. In fact at a professional level it is impossible to train without a coach.
Similarly in investing and trading there is a lot of learning that is required. So go and learn, train and then come into the market.
Like Amit Trivedi says ‘choose your sport’ and then play. If you choose football your hands cannot touch the ball, if you choose basketball your legs cannot touch the ball. Different games, different coaches, different rules. Remember that.
If you just want to open an account with Hdfc securities, Icici direct, Indiainfoline, Kotak, Motilal Oswal, Sharekhan and dabble in shares, you are neither a trader NOR an investor.
You are a royal member of the ‘Contributors to the Brokers Welfare Fund’ – welcome, I have live off this fund for long periods of time. Gratitude is at least what I should have apart from an acidic tongue.
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