When you invest in the markets there is one solid reason to be humble. At least you are not driven to suicide when you get things wrong. At all points in time you have errors of omission and errors of commission. It is human tendency to think of your mistakes as ‘could have been avoided’ and your success as ‘luck’ or ‘strategy’ or ‘inside info’ – it is difficult to say what is the truth.
To make money in the equity market, you need to think a little differently from the market. A strike announcement in HUL Sewri factory allowed me to buy that share when it fell..yes of course it was a Rs. 10 share and it was about Rs. 75 and it fell to 63. Luck or strategy? I am not sure.
Shares that I bought in 2 digits when they were not paying dividends – Essel Propack and Kajaria Ceramics…sold Essel too soon. Holding Kajaria, but only partially.
When you think differently from the market, you need to be ready for some fantastic profits and some fantastic or amazingly stupid decisions hitting you (obviously you know it only in retrospect). Mistakes? Invested and held Crest Animation for a long time. Should have sold when Vallabh Bhansali quit the Board. I delayed the sale!! Mistake or strategic mistake? No clue.
When you are betting against the consensus, chances are you will go wrong. If you had bought Tata Steel when they took over Corus, you would have lost money. If you are holding Ta Mo because of JLR you may not have lost much. I bought the DVR and have a 3 bagger as of now. Not complaining.
Even when I am 100% sure about my ‘buy calls’ for delivery based trading over a 2 year period have been run by my friend who specializes in delivery based shorting business. It helps in knowing whom to call. NO point in asking a fund manager who is handling a Rs. 30,000 crore equity portfolio, he has no clue many times 🙂
The advantage of talking to people who think differently is very simple. See how their thinking process works. Sometimes you will get some very good ideas. I do not talk to them to disagree with them. I talk to them to get a contrarian view. Shows how we could be wrong..After a very long discussion you do realize that it is worth approaching a different point of view with curiosity rather than antagonism?
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