Making Time Our Friend

Hurry…

…spoils the curry.

Specifically with regard to Equity…

…one should never, never be in a hurry. 

You see…

…there will always be a correction.

You will get an entry. 

Wait for the right entry. 

You will, eventually, get a prime exit. 

Wait for the time. 

Make time your friend. 

How?

Simple.

Take it out of the equation.

Simple?

In the small entry quantum strategy, time is, by default, taken out of the equation. 

It loses its urgency as a defining factor, for us, psychologically.

We don’t have any immediate timelines. 

We go with…

…the flow. 

When opportunities appear…

…we act.

When they don’t…

…we don’t act.

Most of the time…

…we don’t act.

Then there are black swans, and we act many times in a row. Like now.

Action, or lack of it, depends on what’s happening. 

We don’t force action.

Why?

Because we have all the time in the world. We’ve made it our friend, remember.

We know that we’ll get action…

…eventually. 

We conserve liquidity and energy for when action comes.

You see, when the pressure of a time-line is gone, quality of judgement shoots up.

We make superior calls. 

Of course we make numerous mistakes too. 

However, the quantum going into the mistake is small. This is the small entry quantum strategy, remember. 

Once we’ve made a selection mistake in an underlying, and have realised this, we don’t shoot another quantum chasing our error. Instead we let it be, and wait for a prime exit from our error. It will come. 

We keep going into identified underlyings not falling into the error category, with small quanta. 

Many, Many times, we make a price-error. Price going against us after entry is a price-error, because the market is always right. It’s us who are wrong when things go against us. 

Never mind. After a price-error, we enter the same underlying with another quantum, and this time we get a better price. Once gain one observes the friendliness of time, even after price has gone against us, all because of our small entry quantum strategy.

When price is going in our favour, we might not enter after a level. Though we’re not getting further entries in the underlying, appreciation is working in our favour. 

It’s a win-win on both sides of the timeline for us…

…because we’ve made time our friend. 

Trigger-Happiness triggering your happiness?

Action?

All the time?

Do you crave it?

And, are you in the markets?

Boy, do you have your work cut out for you, or do you have your work cut out for you?

Ideally, your long-term investment should not give you action.

When it does, it should push you to act.

What backfires is when you act to push it.

Unless you’re convinced by a stock, you don’t buy it.

Unless there’s margin of safety, you don’t buy it.

Unless there’s more margin of safety, you don’t re-buy it.

Unless you’re fed up with the stock or the antics of its management, you don’t sell it.

The whole long-term game is biased towards inaction.

Those who master the art of inaction are good long-term investors.

Bridging gaps is paramount.

What do you do with the vast amounts of time at your disposal?

Do twenty other things.

Create value in many walks of life.

Let the areas not overlap with any of the markets you are tapping.

Capture the attention of your mind.

What happens if you don’t?

Boredom, inaction or the need for action will propel you towards making a mistake.

Mistakes in the market cost money.

That’s how they’re defined.

Do yourself a huge favour.

Approach the markets after having embraced inaction.

Stocks and the Art of Synthesis

A lot comes together.

This coming-together is called synthesis.

The word synthesis has now become universal.

It is applied in various fields, including Chemistry, manufacturing and the like.

It is also applied in areas where deep thought boils down facts to unity, to arrive at a conclusion.

What all are we looking at, with stocks?

No action.

Action.

Time-frames.

Market-level.

Selection.

Entry.

Management.

Exit.

One can list other stuff, but this list should do too.

One needs to synthesize the ingredients in such a manner, that the resultant matches one’s risk-profile. [[Why? Matching means successful market-play. Try it out.]]

That, my dear friends, is the art of synthesis, in a nutshell.

 

Adding No-Action to your Repertoire

Action with positive outcome vs…

… no action vs…

…action with negative outcome…

…hmmmm.

Sometimes we become oblivious to actions with negative outcomes.

Society preaches to be active.

We listen.

We feel that doing something means a step forward.

Well, it ain’t necessarily so.

Many times, and especially in the markets, it actually pays to do nothing.

The most successful investors in the world will tell you, that the biggest money is made while sitting. They’ll also tell you, that almost no one has learnt how to sit.

They’re right.

Meanwhile, I’m telling you, right here and right now, that you can sit comfortably upon your investment without jumping only if you’ve bought with margin of safety. Think about it.

Also, the most successful traders in the world will tell you that the number one action that saves money in the markets is no action. Yeah, when markets move sideways, which is about 60%+ of the time, trades tend to get stopped out both ways, and the trader loses money repeatedly. At such times, it’s better not to trade.

What’s vital here?

Recognition.

Recognize that it’s a time for no action.

Then, do something else.

For this to be practical, make trading and investing your bonus activities.

Meaning, that if your bread and butter depends upon another mainstream activity, you can easily switch off from trading and investing for a while, at will, and without any negative impact upon your basics.

Also, you need to be versatile enough to have fall-back activities lined up, which switch on where trading and / or investing switch off. These need to take over then, and keep the mind occupied.

The danger of not going into no-action mode is the continuous committing of actions with negative outcomes.

That’s precisely where we don’t want to be.

 

 

 

 

 

 

 

That nagging nagging push towards action 

Yeah, it’s always lurking… 

… in the background…

…waiting for an opportunity… 

… to catch you unawares… 

… and spring to the forefront. 

Market-play is a mental battle. 

Your mind wins or loses it for you. 

Make your mind understand the value… 

… of action… 

… and of inaction. 

Make your mind pinpoitedly choose… 

… the time for action… 

… and for inaction. 

Make your mind automatically switch from…

… a state of action… 

… to a state of inaction… 

… and vice-versa… 

… and feel perfectly normal doing the switch… 

… again and again and again. 

The above by itself is a winning state of mind for you, which you can build upon. 

🙂 

The Promise of Far 

I like “far”… 

What promises me far? 

Science fiction films. 

The Interstellar, Gravity, Inception and Contact types. 

Such films relax me. 

What relaxes you? 

Have you identified it? 

Why is this important? 

Many times, we must just sit. 

Action is harmful at such times. 

We are tense. 

We suffer from the fallacy, that action is better than inaction at all times. 

Relaxation-source identification is exactly for such times. 

Go ahead. 

Get your acts together. 

Your full acts. 

Your planning needs to incorporate strategies for inaction too. 

The Promise of Far”  strategy works well for me.

It’s not my only inaction-strategy. 

However, it’s a successful one. 

Action Oblique Inaction Upon Field-Proof

You.

Field.

In.

No theorizing.

Just get into the field.

Act upon field-proof.

Or, don’t act…

… upon field-proof.

That’s just about it.

There’s a time for theory.

It’s to tune your mind.

Learn the ropes.

Baby-steps.

Away from the field.

So you’re yet safe.

Fine.

That stage gets over.

The onus is on you.

Real world is different.

It’s not like theory.

If it were, everyone following theory would be a billionaire.

Today’s professors don’t even put their own money on the line.

If you don’t get a feel for the LINE, your paper-knowledge has no value whatsoever.

On the field, LINE is big. Very big. You have to handle the line well. Otherwise, your money’s gone.

So, gauge the field.

What proof are you observing?

Is it compelling you to act?

Yes?

Act. Forgot about everything else.

Is it compelling you to sit still?

Yes?

Don’t act. Sit still. Forget about everything else.

Carve your own dazzling destiny.

🙂

Constant Activity doesn’t necessarily mean Progress

Beware…

…of the urge to…

…constantly remain active.

The times preach it.

Maybe it was valid for different times.

Today, sitting still is an asset.

Many things happen while one sits still.

Systems cleanse.

Systems rest.

Space is created.

Recuperation is paramount.

Strength is built up, to come out firing on all cylinders another day.

Lack of activity thus becomes a secret weapon.

Weapons are double-edged.

If you’re not careful, they cut your skin from their other side.

We guard…

…against unnecessary food…

… and drink…

…laziness, sloth, mental over-zealousness, gossip and / or any kind of evil…

… while we’re inactive.

If we let such cracks seep in, it’ll have been all for a waste.

We’re not going to be inactive and be called a waste, because that’s a double-whammy.

We’re going to be pinpointedly inactive, and still be more productive than the 24×7 active ones.

We’re going to lead a good, full life with activity amidst productive periods of inactivity.

Yeah.

Do You Know What the Most Underrated Activity is?

C’mon, try guessing at least… 🙂

Yeah…

… doing nothing is the answer, in my opinion. 

We want to move. Be active. Do this. Do that. We’re a “doodat” society. 

For us, activity has become synonymous with achievement. 

How wrong is that?

Completely. 

One can be active…

…and be achieving zilch. Nix. Nadda.

The moment we realize this, the value of doing nothing dawns upon us. 

What are we achieving by doing nothing?

A lot. 

Believe me. 

A lot a lot a lot. 

For starters, we are not taxing our eyes with media. That’s one of the greatest side-effects of doing nothing. Our eyes take a hit in today’s media-packed world. Doing nothing gives them a very valuable break. 

Furthermore, while doing nothing, we are perhaps watching our thoughts and not reacting to them. Or, we are listening to our breathing pattern. These two activities fall under the category of “meditation while doing nothing”. 

So now, doing nothing is a form of meditation…wow! Already we are moving in higher circles. 

While doing nothing, we are refraining from most or all activities, and these include all negative activities, so we’ve got our Karma-usage pretty much on hold. That’s already very big. 

Meanwhile, our thoughts drain. We are getting empty. Positive energy flows in to fill the vacuum. We are getting healthy by doing nothing, and are filling ourselves up with goodness by default. 

Our focus turns to our breath. Wow, we breathe. We are a wonder. There’s metabolism happening. We realise that our existence is already something big. All this while doing nothing. 

We rest. Our senses get a break. Our heart needs to beat less. Poor heart, it never gets a full break, until the very end. In the interim, it has to make do with beating less per unit time. It is grateful for such small mercies. 

Resting makes us gear up for forthcoming activity. Our bodies and minds refresh themselves for new endeavours…by doing nothing. 

Try it out. 

Do nothing. 

Perhaps it was lacking in your repertoire. 

It won’t be lacking now. 

Use it like a secret weapon!

Loneliness of the Successful Investor

Walked alone?

No?

Please try.

Success needs original ideas. Original ideas need solitude.

Successful investors walk alone.

Sometimes, they’re lonely.

Investing is more about sitting than action.

Sitting around inactively breeds loneliness.

The antidote is activity – other activity. Not market-related.

Successful investors do other stuff to tackle this loneliness.

Buffett plays poker.

Branson is breaking into some virgin territory or the other.

Gates is busy souping up his home.

Trump blares his trumpet on a TV show.

Jindal plays polo.

Mallya’s sole focus has been other stuff, so much so, that he’s become unsuccessful.

Mahindra loves to tweet.

Tata walks his dog.

Sachin watches Wimbledon live.

Mr. Bean is seen on the F1 circuit.

You get the gist.

These people follow one or more “other” activity / activities so passionately, that they forget about their main activity for a while.

Their system recuperates. Time is bridged to the next instance of main-frame action. While traversing this bridge, body, mind and soul have recuperated. System is fresh, ready and waiting for new action.

When you’re walking alone next time, you’ll be able to deal easily with any loneliness on the path.

One might make moderate returns, investing with the masses.

To outperform, though, one needs to walk alone.

The successful investor realizes that he can’t get out of this one.

Therefore, the successful investor creates a way to still come out winning.

This is human capital at peak performance!

Happy Third Birthday, Magic Bull!

Hey,

We turn three.

You know it, and I know it…

… that this year’s been a slow going.

Sometimes, life is slow.

Such junctures are great times to recuperate and consolidate.

Inaction is big in the markets.

Very few know how to be inactive – and stay sane.

Those who do – well – they make big bucks when it’s time for action.

That’s only if they haven’t gotten rusty and lazy by then.

Yeah, inaction is an art.

In the markets, it is at least equal in importance to – action.

So, for the most part of the year that’s gone by, my market activity’s been practically zilch.

It’s not that I’ve been sitting and twiddling my thumbs. No! For heaven’s sake! Of course I’ve been doing other stuff.

Inaction in the markets must be coupled with action elsewhere, if one plans to stay sane, that is.

Also, inaction in the markets leads to preservation of capital. That, what you made during active times, remains safe, pickled and intact.

Then, when there’s opportunity, you’ve got your whole arsenal to cash in with.

While changing gears, don’t jump out of your seat with your saliva drooling, though.

Have some rules in place for opportunistic action.

I have some basic rules for myself at such junctures. I don’t put more than 10% of my networth on the line, while pursuing an idea. This rule applies for me while changing gears too, more than ever. Also, I don’t pursue more than two ideas at any given point of time. Most of the time, I’m not pursuing any idea, till an idea appears, refuses to break down, and just sticks.

Safe.

Simple.

Comfortable.

Ideal circumstances…

… to hit the sweet-spot…

… when it’s time for action.

Wishing you happiness, safety and profits in whatever market activity you pursue,

Yours sincerely, and just there for you, period,

Magic Bull.