If you are an investor the last 10-12 days would have unnerved you. Should it have unnerved you? Yes. It takes a lot of investing experience to see your portfolio wipe out wealth everyday for 3-4-5 days and still remain unfazed. IT DOES NOT MATTER whether you need the money, you surely get scared.

The worry is not so much as what has happened, it is about what you should be concerned. You should be concerned about the amazing amount of ‘gyaan’ thrown at you, and you not knowing how to react.

Now that Namo’s govt has reduced oil prices by a token amount, there will be criticism – which will sound FAIR. Pappu and his team will now criticize Namo for destroying government wealth (the market cap destruction of OMC) – and say ‘the cost has been to high’. Sadly for many of us that might sound right. We need to understand basically Pappu is looking for ways to get access to the Treasury. That is all. He will blame Namo for bailing out ILFS using LIC money, but that has been something that all governments in India have done.

If you were a Hillary Clinton supporter, YOU WERE SURE that Trump could not win. If you are a Namo supporter you are likely to say ‘how can UPA come back’. However, the electorate and markets are here to surprise you. If you learnt in 2018 that “financial companies should not leverage so much” – is this not what you were supposed to learn reading about 2008 American crisis? Well, lessons are not taught, they are caught or learnt.

Now it looks “inevitable” that Nbfc have to fall and IT has to go up. Right? Well you might end up making money playing a contra call too!! Who knows? One just plays all parts of the market and hopes that we put enough money in strong convictions which turn out to be right. What if I say “sell IT and buy Nbfc will work” but sell 50 TCS and buy 100 Cholamandalam? Well then the conviction is not strong and I am doing this just to please my intellect. If I have to please my bank, I should be selling 500 TCS and buying 1000 Chola ATLEAST to make some impact on my portfolio.

THAT is a big worry. We not having enough confidence in our strategies. We should not get carried away at some fund manager in some obscure fund doing well. That is not enough. We need far more evidence of that being skill and not luck.

The old old old strategy of being invested for the long run – in the form of a sip – will work. Only thing is that during market downturns somebody will show you how their strategy of 55% Equity and 45% debt would have worked better. Sure, it will look good in the short run, but in the long run it CANNOT beat a 78% E and 22% D.

Give me enough data and enough time frame, I will prove ANYTHING. It is not difficult. I can prove that a 10 year sip can under perform a PPF. I can prove a 3 year sip in an ELSS can underperform PPF. It is not difficult.

Keeping calm, keeping your long term money in GOOD QUALITY equity will create wealth for you. This is the basic, and does not change.

Do you have the patience to sit in one place, meditate, and not worry about your fund performance?

Or will you keep trying new strategies on a regular basis? that is the thing to worry about.

The market behaves EXACTLY as it should. If there are excesses in a particular company (industry) it will reach a frenzy level, and then fall. Of course this happened to NBFC.

Cholamandalam a company in which I am invested was at a price of Rs, 1700. It has fallen to Rs. 1140. Awful, right? And it must now be a screaming buy no?

Well I am not sure. By any stretch of imagination, at a dividend yield LESS THAN 1%….i DO NOT consider it a screaming buy for sure. I may not sell what I have, but I am grateful to a fund manager who told me:

Subra if you sell Nbfc now, you will curse me in 3 months, but you will thank me in 12 months.

Smart thing about this advice? the dumb me took it seriously enough to act on this.

Luck or skill?

Luck to have met him.

Skill to have known over so many years who to listen to.

The biggest risk in EVERY MARKET is the same – whom do you listen to!!! There is more learning in a downturn than in an up market. You should be MORE worried about going wrong than about being right, and importantly listen to the right people. Not msm or worse Social media.

In a market where you want to invest, stay away from Wassup, websites, fb,….too much shit being dished out by half baked advisers.

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