I once went for a walk with my 5 year old niece. She asked for a balloon, I walked on ignoring her requests. She pleaded, cried,..but I went on. She stopped asking for the balloon and started talking about icecream. She knew I would buy her an ice-cream.

I was intrigued so I asked her why she stopped asking for a balloon and shifted to ice-cream. She said ‘the balloon fellow was too far off and I reasoned that you will NOT walk back’ – so I knew it was a wasted effort. THIS FROM A 5 YEAR OLD.

On the way back she had an ice-cream in one hand, and a balloon in the other hand.

The retail investor is like that..he wants a new toy every few hours if not every few minutes. I have met ‘industrialists’ with such a short term mindsets. If they have money it is because their fathers left them a lot of money. As an investor you need to take a long term view on the same asset. I first bought Coromandel International, Cholamandalam, etc. in 1986. I have since then bought it many times and done short trades many a zillion times. When I look at a new nbfc I ask myself “is this better than Chola” if the answer is NO, I go and buy more of Chola. If the best share is already in your portfolio, you just go and buy more. Coromandel and EID Parry are in my portfolio and both are commodities. Both will go through a high and a low. You need to sell when it is high and then replace it when it is low. Of course shares like Coro give you a lot of opportunity to buy when they give you a merger ratio arbitrage like it did when it got merged with Sabero.

Go back a week ago and see what disturbed your investment peace of mind? or go back one year – do you remember? the chances are that you do not. It was not important who won in Bihar or who is going to win in UP. It did not matter which IPO got listed at what price. IPO pricing is MEANT to hurt the small investor. Indigo got such a big boost on listing that the merchant banker must have got a flak for bad pricing. Thank God I did not hear the expletives!!

Be steady in what you want. CONCENTRATE and MEDITATE both these things are worth LEARNING and cannot be taught. You just have to know it. It is easy to get distracted by too many shiny things in the market. The fancy looking anchor on the business channel is not going to make you rich.

Relax. Stand there doing nothing. That is the essence. Of course I am assuming that your asset allocation is fine 🙂

 

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  1. Subra sir, can you pls. explain difference in commodity and equity.
    If a long term investor have both of them in his portfolio – what are pros and cons.

    Thanks

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