Getting rid of your Behavioural Traps
Acting in the right manner is the most important for successful investing; because just knowing the right method doesn’t help you earn money, acting on this method in the right way, does.
So, what is it that prevents you from doing this? The main cause is – Your very own mental traps! – the emotions/ biases that prevent you from acting on this method; in the right way.
So, what can you expect, as you read these Shastras? Those of you who haven’t started investing, can expect that you will now start investing directly and successfully; and those of you who already invest, will take better decisions that can give far superior results
Here are the Shastras:
To be successful in investing, you need to have the right mind-set. And the mind-set that will give the highest chance of success is that of somebody owning a fruit orchard. In contrast, having the mind-set of a fisherman or vegetable farmer is unlikely to work in stock investing.
Let’s see why?
Listening to experts is almost like an addiction for most stock investors. While many don’t even realize that they are addicted to this, others who have experienced that experts don’t win for them, are wondering how they can ever get out of it.
Let’s see how investors can get rid of their addiction of ‘listening’ to experts?
Information is like an antibiotic. An antibiotic over dosage can have varied effects on our health, from causing complications to being lethal. But what’s so disastrous about having an information overload.
Stock Shastra #16 helps you avoid the disastrous effects of Information Overload and help you take better stock investing decisions
Stock Shastra #17: Don’t forecast future stock prices, Analyze a Company’s ability to earn future profits
Forecasts are difficult to make especially those concerning the future. In today’s world stock investing has become synonymous to forecasting! But the key to successful investing is having an analytical approach towards your investment, rather than forecasting daily price movements based on market scenario and sentiments.
But how is forecasting any different from analysis?
When planning our stock investments, we cannot afford to have the same casual approach that we have while shopping. Because, going to the stock markets without a predefined list will leave a big hole in our pockets.
Let’s see how.
When the facts change, I change my mind, what do you do sir?’ – following this Keynesian quote in the stock markets may put you on the road to successful investing. But we humans are very reluctant when it comes to changing our views.
Let’s see why.