…do we play this game?
I play it to…
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.
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.
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!