There is a lot of talk about markets fluctuating, algo trading, high speed trading..etc. as the reasons why people money. High speed trading is nothing new. At various points in time various ‘hi speed’devices have been used. For example even when the Telegraph was used in 1840 for the first time the the US markets, there was complaints about speed.
What the common man does not accept is that there is no way you can make money by high speed trading. Well not the common man. There are great traders who know how to earn money, but that is a terrific skill and has to be learnt. The retail investor has to INVEST, not trade. Investing means buying and staying with that position for long periods of time. Most of the under performance by the retail investor is because of trying to jump from one share to another, or even from one fund to another. Activity makes money for the BROKER, and it ensures that you keep watching TV or reading the pink papers.
Look at all those people who cashed out of the market at 10000 index in 2008. Are they not looking foolish now?
However, do remember if you were in a Fmcg / pharma portfolio from 2003 to 2007 you would have looked foolish too. I was in Colgate, Hul,…kind a portfolio even during that period. Yes LnT, Cholamandalam, Hdfc, Kotak, Siemens, Cummins….etc. did well and I was damn damn lucky to have sold Tata Power at a pe of 100, if I am not wrong.
As investors many a times we miss the mega trends. Go to the internet and see the amount of energy that India is generating using solar power. It is not funny. Cochin airport runs fully on solar power. Welspun energy is doing great work in MP in solar power. Gujarat has the biggest solar power farm in the country. There are at least a couple of villages in Odisha that run on solar power.
What impact will solar power have on our power, steel (each house generates its own requirement, so no cables for transmitting) also no transmission loss…so the demand for coal, oil, and steel comes down dramatically. Are we prepared for all this? Will we miss the megatrend in the power scenario?
Young people in the USA are refusing to treat the car as a status symbol. So Uber it is! Well Uber will use the car much more – and it is likely to be at the bottom of the chain while buying. What happens if Uber says “clients prefer a Maruti car made in India” or “Indica made in Thailand”. ….we could go on and on….
Ignore the mega trends and let the fund manager manage it. Or get into learning by reading the balance sheets….and damn the macro…well not exactly damn, but learn how to cope with the markets…
Post Footer automatically generated by Add Post Footer Plugin for wordpress.