Cost-Free-Ness completely does away with Fear

When nothing from your end is invested, but you still have a holding in the markets,…

…you have created for yourself the state of cost-free-ness.

Cost-free-ness carries with itself a feeling of intense satisfaction…

…because of the sheer magnitude of the feat.

Well, congratulations.

With cost-free-ness comes absence of fear with regard to one’s cost-free holding.

When it’s not costing us, we’re not bothered.

Markets can go anywhere.

They can come down to zero, for all we care.

Fine.

Still unshaken?

Yes.

Why?

If markets comes down to zero, we can look to enter en-masse.

We’ve got principal, remember? Took it out, to create cost-free-ness, tu te souviens?

When markets come down to zero, owing to absence of fear, …

… our focus is not on our (cost-free) holding.

Instead, our focus is on the lucrative entries coming our way.

After markets come down to zero, if they do, they’ll soon reverse.

Then, our new entries will start becoming cost-free, as prices climb.

Soon, we’ll pull principal out again, and will have have new cost-free holdings, which we can transfer to our consolidated cost-free holding account.

Fear is nowhere in the equation.

From Cost-Free-Ness to a Unified, Singular, Comprehensive, 360° Market-Field-Strategy

So you’re cost-free in the markets…

…and are contemplating your further market-journey ahead.

Yeah, now what?

First-up, let’s grab a hold of what you have in your hands.

You are holding high-quality material which fits your risk- and long-term holding-profile, and, most importantly, this material has now been freed up of its investment-cost.

That’s (very) huge!

So, how does it go from here?

I’ve been here, and have always bungled it up.

This time, I won’t.

Why?

I’ve finally realized the supreme importance of being at this point, and, …

… I wish to keep coming back to this sweet-spot, …

… again, and again and again.

It’s a wonderful feeling.

One feels deep satisfaction, of achieving something big.

Yeah, at Magic Bull, we sheer achieve, write about it, and then achieve more.

We’ll just go on achieving.

We’re not stopping.

The writing part is only to keep a log and to help others on the path.

And of course, it clears one’s thoughts, making one arrive at gems of strategies…

…which all converge and unify into a singular market-approach.

Let’s talk about singular.

At this sweet-spot, the ghost of trading arrives.

One feels like riding the highs by video-gaming through the markets.

And, one falls flat.

It’s not familiar territory, because the approach till now has been one of investing, and investing and trading are diametrically opposite in nature. Meaning that it takes some time to rewire.

Before rewiring properly, …

… one’s already pressing buttons as if buttons are soon going to become extinct, since one is seeking thrills. It’s normal.

One’s achievement-vector points only towards falling flat, such is one’s behaviour.

How do we conquer this pitfall?

We’re going to exhaust this ghost’s potential to our benefit.

We are going to trade, …

… because otherwise, ghost’s not going away.

However, we are going to trade only those scrips that are already inhabiting our cost-free portfolio.

We trade these, as new units, in a different trading account.

Entry is worth one small quantum, whatever small entry-quantum one has defined for oneself.

The objective is to ride a quick run, and make, let’s say, 20% of the traded units cost-free.

That’s would be good, hard, tangible bang for our trading bucks.

Assuming we succeed, we then transfer the cost-free units to our long-term portfolio.

In the event we fail because markets start to reverse, it’s still ok.

It’s a holding we are comfortable holding, into the next market cycle, where we’ll again try and make it cost-free, and we’ll then have cost-averaging on our side, since we’ll have reversed to an investing approach.

It’s win-win everywhere.

Failure comes eventually, because markets ultimately reverse.

No one knows when.

Till them we keep trading and increasing our cost-free-ness.

When failure comes, it’s once, and eventually we hold and try to turn it around.

Because we’re holding quality, the probability of turning the situation around is high.

Before this one failure, we are poised for many possible trading wins, with each win adding to our cost-free-ness.

And there we have it…

…voilà…

… , yes, it’s a unified, singular, comprehensive, 360° Market-field-strategy…

…courtesy your friend and comrade-in-investing. …

… Magic Bull !

🙂

How Big is your Win?

Assuming you cruise…

…cost-free in the markets now…,

…how big exactly is your win?

Have you stopped to ponder over this fundamental point.

Let’s go over it together.

The question you need to be asking is, …

… “What will happen to my cost-free-ness from this point onwards?”

Well, what’s going to happen solely depends upon your behaviour.

We’ll just study a best-case scenario.

Let’s assume you leave your hard-earned cost-free-ness be, in the markets, for the next 25 years.

What would become of it?

First-up, let’s understand the very nature of your cost-free-ness.

It’s high-quality.

It urges you to hold onto itself, forever.

The fact that you can’t let go of it despite such highs speaks of it as being the essence of your struggle, in terms of quality, if you know what I mean.

High quality material would typically compound at 15% per annum, over the long run, adjusted for inflation.

The figure of 15% per annum compounded, adjusted for inflation, is very achievable for your high-quality material – let’s put it like that – in a market like India’s.

Let’s do the math.

1 * (1.15) ^ 25 = 32.91

There you have it.

Your cost-free portfolio is slated to increase almost 33-fold in the 25 years to come.

That’s 3300% in 25 years when seen as pure appreciation, making 132% per year simple appreciation (not compounded).

That’s how big your win is.

Yes, staying invested with your cost-free-ness will make your cost-free-ness typically burgeon almost 33-fold over the next 25 years.

Go figure.

🙂

Cost-Free-Ness

Why…
 
…do we play this game?
 
I play it to…
 
…win.
 
What’s one’s definition of a win?
 
It’s different for everyone.
 
I’ll tell you mine.
 
I want to be completely cost-free in the markets before the end of a bull-run. 
 
What does being cost-free mean?
 
It means that whatever one has in the market, has been completely freed up of its principal. 
 
That’s done by taking the principal out, over time, as markets climb. 
 
What purpose does cost-free-ness serve? 
 
Firstly, whatever’s in the market now, in a cost-free state, is all high quality material. 
 
It can’t be otherwise. 
 
What’s not high quality will be pulled out as markets persist in their climb. 
 
Why?
 
The impulse to book is very strong. 
 
In that state of mind, whatever is not worth holding anymore, will be automatically booked. 
 
It’s human nature. 
 
Secondly, what’s in the market now, can stay in, like, forever, without causing us any tension. 
 
That’s an ideal state of mind for the creation of multibaggers, and the underlyings in question are all multibagger material, being the essence of one’s entire market-play. 
 
Thirdly, one has gotten one’s soldiers home, to fight more battles, as valiantly as ever, in the times to come. 
 
Ya, cost-free-ness means that one has pulled one’s principal out. 
 
This very principal will now be utilized to make more and more shares cost-free.
 
Fourthly, we are not going to suffer any pangs about the markets climbing and climbing further. 
 
Further climb benefits our material in the market, immediately. 
 
More material, picked up at trading levels, is likely to yield a small chunk of cost-free shares, in the form of a winning trade. As one exits such trade, one leaves one’s profit in the market, in the form of cost-free shares. 
 
Sure, eventually the market will collapse, and we’ll be left with some material which is not only not cost-free, but is now losing, perhaps big.
 
That’s ok.
 
Why?
 
Because, quantities are relatively small. These are trading levels, remember? Thus, entries will be small.
 
Then, these are the same underlyings as already existing in our portfolio. 
 
We want to hold these. 
 
We are holding many cost-free units of these very underlyings. 
 
Current loss-making units of these underlyings can be averaged as markets sink further, because we are highly convinced about these holdings.
 
Eventually, the curve will turn, and a new cycle will start.
 
As markets climb in the new cycle, eventually these new units will start becoming cost-free.
 
Such positive loop outlined above is the market sweet-spot I always wish to be in.
 
It’s the essence of almost seventeen years of first-hand, in-the-field market learning, with personal funds on the line at all times, struggles, losses, beatings, the works and what have you. 
 
And now, there’s cost-free-ness.
 
That’s my win in the markets!
 
🙂