Evolution Anyone?

What kind of a game do you prefer?

Do you like to play without challenge? Where you won’t be pushed, to your limit perhaps? Where you know the solutions? Where you’re king?

Or, do you like the game to challenge you? The game pushes you around. You don’t know the solutions. You’re not king. Do you like that kind of game?

Why am I asking?

Well, simply because I concern myself with growth. 

As in evolution. 

I measure life in evolution per unit time. 

The latter kind of game evolves you. You score heavily, though this might not show on the outside, yet. It will eventually. Big time. Promise. 

The former kind of game deceives you. You kinda start believing you’re actually king, and start behaving like one too. The fall from a height can be so heavy, that it can decapacitate you, forever. Who would want that? Not even you. But you’re too busy playing king to remember. This is the reminder, right here, right now. 

Wake up pal, to the coffee. 

Play some latter games. Try converting loser odds to winning ones. That’s the big league. 

If you’re king, fine, be a good one. Do good to many. Make it count. In your spare time, though, do some other stuff which takes you into uncharted territory. That’ll round you off as a king. 

What is it about uncharted territory?

Eventually you’ll find yourself in one. It just happens, suddenly. 

What do you count upon?

Assets. 

Ability to not panic. 

Clear thinking. 

Savings. 

Relationships. 

Gut-feel. 

Courage. 

Mental strength. 

Fill in the blanks. 

All of the above have to be developed / nurtured. In some way or the other, all of the above come by charting new territories. A new relationship is nurtured into a solid life-long asset. A new job becomes a steady earner. Savings accrue. Mental / intuitive assets strengthen themselves by being exposed to tricky situations. These will always be there for you, in your next situation. 

Don’t be a bore. Take that calculated jump. No one’s asking you to jump off the cliff. However, times are such that you’ll need to think out of the box, again and again, and again. 

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Speed of Rise vs Speed of Fall

Specifically, equity markets have this one repetitive characteristic.

Their average speed of rising is lesser than their average speed of falling. Much lesser, I would say. 

Why?

Falling has to do with selling pressure being more than buying pressure. Selling pressure is connected to fear. Add caution to fear, and one has already sold out. 

Rise has to do with buying pressure being more than selling pressure. Buying pressure is connected to optimism. As markets keep nudging higher, slowly, optimism turns into euphoria, with a hint of caution. This caution slows the speed of rising, till greed takes over in the last stage of the rise, and one fails to see any caution anymore. At this time, the speed of rising is the highest, but is still lesser than the speed of falling at the nadir. Why?

What is the prevalent situation at a nadir? There’s blood. People are running for their lives. They take action before asking questions, and before looking here or there. 

Many times, you come across someone holding a stock which he or she has inherited from a parent. This someone comes to you with the ubiquitous query – what to do, sell it now? You look at the chart. Whoahhhh! You see the buy price, one and a half decades ago. You look at the current level. You calculate the profit. Along the time axis of the chart, you also see that the stock fell back to its buy price or below in a market crash, all within a month and a half. After this, the stock has recouped its losses of the crash, and is showing a healthy profit again, six years after the crash. During the crash, how long did it take the stock to fall below the buy price of one and a half decades ago? A month and a half. Holy moly!

That’s the equity playground for you. 

It’s directly connected to human emotions. 

Anything can happen on this playground, so keep your eyes and ears open, and…

… be prepared. 

Taking the Pan out of Panic

Panic – Pan = ic = i see = I SEE.

Times are unprecedented.

We’re breaking new lows of evil everyday.

Ours looks to be a hopeless nation.
Is it over for us?

Shall we pack up our bags and migrate?

Just take a deep breath. Bear with me for a moment. Try and cast your panic aside. Try and think clearly.

I’ll share with you an observation. Take any Indian. Doesn’t have to be an outperformer. Take an under-averagely performing Indian, for all I care. Weed him or her out of our pathetic system, and place him or her in a nation with good governance.

Lo and behold, our candidate will start performing. Not only that, soon, he or she will be outperforming. After a decade or so, he or she will probably have mastered the system and punctuated it with innovative short-cuts.

Get my point?

We are a resilient race. We might look fickle, frail and harmless superficially, but we can struggle, bear, survive, and finally break out. Just give us good governance.
Don’t panic. We’re not going down that easily.

What’s happening currently is a purge. Yeah, it’s a catharsis with a big C. While it continues, asset classes across the board will probably get hammered.

What does that mean for you?

Only one thing.

Stay in cash. Accumulate it. Learn to sit on cash. Sit on it as long as the purge lasts. Let its value depreciate, doesn’t matter. Park it safely with a conservative private bank. Fixed deposits would be the instruments of choice. Yeah, you don’t want to leave unattached cash lying around. Potentially, unattached cash could be susceptible to online fraud. Attach your cash, safely, and keep it before your eyes. Put some watch-dogs in place, as in sms and email alerts. Password-change attempt? You are immediately alerted. New payee added? You are immediately alerted. Watch-dogs bark.

As per my instinct, though we probably won’t go bankrupt as a nation, we might just go a long way down before the purge is over. After the purge, there will be tremendous bargains on offer, across the board, in all asset-classes. Cash will be king. Save your cash and sit on it – for that day.

Meanwhile, your wealth-manager will try to push you into panic purchases with your cash. As in, buying gold at 32k, and the USD at 65. Don’t listen. These are crazy levels. One doesn’t invest at crazy levels. These are not even normal trading levels. Yes, they are institutional trading levels. One does not invest at institutional trading levels.

It’s time to use your common-sense and maintain a cool head.

You can only do that by refusing to panic.