Let us face it, when the market was at 15000 most media stories were how:

a) people had lost lots of money in the equity markets,

b) how fixed deposits and PPF had given better returns over 3 years

c) why people should be scared of the equity markets.

One good thing about the media is, they seem to have done a good job. The Indian equity investor will soon be extinct.

At 20,000 there was not much of a story about the market.

At 24,000 the stories were ‘Are we in a bull market’ – after completely missing the ride from 15k to 24k. Awesome media. They do it all the time. Earlier it was in the print media, but now it is the ticker channels who can create the Fear and the Greed. When Buffett said ‘Be Greedy when others are fearful, and be Fearful when others are greedy’ – I am sure OTHERS meant the media.

Then the market reached 32000. Articles were ‘it is the DUTY of the fund industry to be responsible TAKING MONEY.

I hear a few people now saying ‘You have reached your price, now is the time to redeem’. Awful advice. Terrible, awful advice.

Three things to remind you again:

1. Heights by great men reached were not by sudden flight, but they while their competitors slept were toiling upwards in the night: Read it in school, and it is an awesome saying. Spend long hours reading, understanding and do remember that you need to spend long years in the market. The market and the indices are not daily, weekly or quarterly stories. Companies like Hdfc, Bajaj Auto, Reliance, Siemens, Cummins, Colgate, EiD parry, Coromandel International, Tatas,…were not built overnight. Nor will you make money overnight.

2. Media, and therefore the common man have a terrible, terrible, awful ability to time the market. Sadly this is true for 90% of the fund managers too. So please do not use your ‘timing’ brain in the market. God forgot to put it in there. If you entered at a high, do not compound that mistake by selling at a low. Good companies bounce back. Cash flow is a fact, Growth stories are stories.

3. Dull boring companies with solid cash flow will be good in the long run. If you want sex appeal, you are in the wrong market. Go elsewhere. If you want speed and thrill, go to the races. This is a dull boring place where you will get rich over a LONG period of time. Time spent in the market is far, far more important.

4. Watch entertainment and animal channels. Media hurts. If a person appears more than twice in a fortnight on business channels, check his KRA – THAT is his job, analyzing is being done by somebody else. He is just a loud mouth paid to be on TV. Either by the channel itself or by his employer.

5. If I give my age as 445,424 hours, will you not say please say it in years and months? Similarly when I ask you for your portfolio by age…I do not want it in weeks, I want it in years….

AW Gawd. I am sick and tired of telling people EQUITIES are for generating wealth over decades and generations, not weeks.

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  1. Nice. Me too made the same mistake of watching ticker tapes. Fully realised this when my own business is progressing slowly and steadily. Nothing will change overnight. But many nights of hard work will change things.

  2. I can vouch for that too!
    Too much of tinkering with your money is dangerous for wealth accumulation. Stop Trading, its only for the professionals.
    If one can pick stocks, go ahead. Else stick with few good mutual funds or Index funds.
    Keeping it simple help as Subra sir has already said multiples times in his posts.

  3. Golden Words:

    I ask you for your portfolio by age…I do not want it in weeks, I want it in years….

    If everyone follows this sentence, almost there will be good wealth..

  4. I have learnt one thing, never sell a share till you need the money for a important cause or when you see another opportunity which will give better returns. Churning the portfolio makes brokers rich not the investor. I have shares like Cummins,HUL at effective costs below 100 Rs.

    Buy those companies which you understand.

    Problem with electronic media is that information is too easy to get. I miss the days when we used to wait for ET Monday supplement to get details of our portfolio.

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