Investors and worrying

We are still in the caveman’s times. So we are worried about whether we will live. When we see sugar and carbs we stuff ourselves – it is fat and survival. So we eat sugar…to make sure we have enough energy to run when a wild animal chases us.

Now come to the markets. We have a group that worries. We worry about Modi, Raga, Trump, oil, China, India, RSS, cow, beef, veganism, Texla….- well we are ACTUALLY looking for reasons why the market should fall. We said GST. We had said demonetization, we said NPA. We said EPS not going up will bring PE down.

Nothing happened. We had 200 solid reasons why the market should go down – WE WERE SURE AND OVER CONFIDENT that the market will go down. It did not. Then we started worrying about volatility. Then we found that volatility is just a vague number – and it hardly shows what will hapen AFTER the calm. Well there was not enough evidence about what would happen AFTER the calm.

So we needed to intellectualize it. We said PE is too high. Then we said…..but again nothing worked. Now we are worried that other than us nobody is worried.

Sorry this was a joke….but yes I do find investors and distributors with zero ability to understand trends and long term data worry. They pick up some random data and assume that it is a trend. They can miss the OBVIOUS elephant in the room and break their heads over something insignificant while their moneys are in risky assets. Risky for me can even mean cash in the savings account! Imagine meeting somebody worried about macro but earning Rs. 93,000 in SAVINGS BANK interest. You know how smart he has been!!

If you are an Indian investor there are no VIX returns – so that possibility too does not exist…

WHAT CAN YOU REALLY DO?

learn Vipassana and other forms of meditation for a start. You obviously cannot get complacent. Shares aren’t significantly more likely to go down after a quiet period than after a time of turbulence. But even a small drop can hurt you –  so you had better be prepared.

Ask yourself whether you have enough cash to make it through a falling market. Make sure that you ARE OVER EXPOSED to the market and alert to company wise positions,  rather than a pure ego. . Taking sensible, calm, and structured actions like these will help prevent you from regret…hopefully!

 

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