Markets & Detachment – Possible?

We’re pushing limits here.

Making the improbable possible – doesn’t that give you a kick?

Am I even qualified to talk about detachment in the markets?

Well, I can at least tell you how I’m approaching the subject.

Hmmmm – where to begin, let’s see…

Let’s start at the nascent stage where a pang of attachment causes you to worry.

You sit up.

What’ll happen to my stock?

What if there’s a huge crash overnight?

What if I get wiped out?

What will my wife think of me?

Will I become the laughing stock of the Universe?

It’s ok.

Worry.

Burn your heart out worrying.

One needs to feel the pain of the disease to want to weed it out comprehensively.

Worrying and burning your heart out is not the only thing you are doing, though.

You are simultaneously making a list of all the questions that are cropping up courtesy your burning heart.

Yes, yes, make the list. Cast aside the silliness of the questions. No matter how silly a question is, include it in the list if it has cropped up even once. Get on with it.

There then comes a time where you can confidently say, that yes, my list of questions is pretty much complete. No new question seems to be asking itself.

Wonderful.

Now go about creating the circumstances for each question to not crop up.

Meaning that you have undergone actions that are now enabling you to answer each question with “this will not happen because I have created such infrastructures that exactly this will not happen”.

How are you addressing those question for which you can’t create such infrastructures, like an imminent market-crash, or what your spouse might think of you?

To address these particular questions, you create circumstances that cause you to be least affected in the event of the appearance of such questions.

For example, to be mostly insulated from the effects of crashes, buy with margin of safety. Or, set stops. Or, don’t buy. Short. Hedge. Do what suits you, but do it.

Regarding spouse, he or she will think what she thinks. You can’t change that. You just need to have a clear conscience. Commit those actions that give you the clear conscience. Hahahahahaha! 🙂

Right.

There then comes a time, where all queries have been comprehensively addressed. They stop cropping up.

Next, you need to stop committing those actions that can act as catalysts for a query to pop up.

Only look at the market when you have to. Don’t, otherwise. Try only looking at the underlying. Broader markets – well, poisonous, keep these at a minimum. Try and bring down your market action to once a day. Limit the action to the minimal time possible.

Weed out any kind of market conversation with other individuals. There’s no need. There’s you, there’s the market, there’s your system. That’s all you need.

Keep brokers and middle-men at a manageable level. Preferably at zero, and maximally at lower single digits. Only do business with them, no loose-talk, no exchange of tips. Tips are another big poison.

Find your own investments or trades. Resources are phenomenal today. You have everything at your beck and call with a computer and an internet connection.

Shut off business TV. More than a glance at the business page of the newspaper is unnecessary. Business magazines? Forget it. Every piece of info is accessible pinpointedly on the net. You wish to enter into an investment at the nascent stage, right? By the time the story gets published, smart money is already in, and there’s already been a run-up. Your margin of safety is gone.

Finally, take a look at yourself now.

Your results are improving drastically…

…and you’ve detached in the markets…!

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Nath on Equity – Some more DooDats 

Yawn, the story goes on… 

Let’s 21). not think about our folio at night. 

We’re also 22). only going to connect to the market on a need-to basis, no more. 

If there’s a 23). doubt, wait. 

24). Clarify doubt. If it goes away, proceed with market action. If not, discard action. 

Don’t spread 25). too wide. 75+ stocks means you’re running a mutual fund. 

Don’t spread 26). too thin either. Just 5 stocks in the folio means that risk is not adequately spread out. Choose your magic number, one that you’re comfortable with. 

Once this number is crossed, 27). start discarding the worst performer upon every new addition. 

28). Rarely look at folio performance. Only do so to fine-tune folio. 

Don’t give 29). tips. Don’t ask for them either. 

You are you. 30). Don’t compare your folio to another. 

Due diligence will require 31). brass tacks. Don’t be afraid to plunge into annual reports and balance sheets. 

32). Read between the lines. 

Look 33). how much the promoters personally earn annually from the underlying . Some promoters take home an unjustified number. That’s precisely the underlying to avoid. Avoid a greedy promoter as if you were avoiding disease. 

Is 34). zero-debt really zero-debt?  Look closely. 

Are the 35). promoters shareholder-friendly? Do they regularly create value for the shareholder? 

Are 36). strong reserves present? 

Are the 37). promoters capable of eating up these instead of using them to create value? 

Is the 38). underlying liquid enough to function on a daily basis? Look at the basic ratios. 

Is any 39). wheeling-dealing going on with exceptional items and what have you? 

40). Is the company likely to be around in ten years time? 

Yeah, things in the equity world need to be thorough. 

We’re getting there. 

🙂 

The Tipping Point

What is it about tips?

Why do they have that lure? That magnetic effect? That greed-invoking element? That goosebumps-causing energy?

Tips thrive in any market. 

They are given at the drop of a hat. 

The giver feels he or she is doing a favour. The receiver feels obliged. 

What has led to the giver feeling complaecent that he or she has something one his or her hands?

The giver was a receiver, a very short time ago. 

He or she got sucked …

… into the story. 

The story is tempting. 

It builds upon many half-truths and binds them together in such a presentable manner, that one’s defences, if any, are just maimed. 

In comes the tip. 

Off goes the mind, counting the unmade bucks.

In goes the money. 

Mostly, it doesn’t materialize. 

Why?

Tips do the rounds as short-cuts in people’s half-baked minds. 

A short-cut to wealth. 

The 99% here don’t want to do the spade work. They don’t want to get their hands dirty. They want spectacular returns, though, and they want them now. 

That’s the short-circuit. 

Investing is about doing lots of research. You dig. And then some more. It’s about patience. You wait. And then some more. It’s about having a sorted mind, and then going in. It’s a full-time occupation, unless you streamline it so well, that it then goes hand in hand with your other daily activities, and drops into the background like a mantra that keeps resonating with your breath. 

Does one become a brain-surgeon in a few hours?

Do you ask the brain-surgeon to teach you brain surgery in a day?

NO. 

It takes time, study, effort, will-power, finances, mindset, etc. etc. to become a brain-surgeon. 

It takes a lot of similar things to become a successful investor. 

You make yourself into one. 

It’s your effort. 

You don’t become one following tips.

People ask for tips. Daily. It’s a disease. I’m scarcely able to deal with it. I just evade. 

Folks, those who ask for tips are expecting to be made a brain-surgeon in one day. Not happening. It’s a short-circuited way of thinking. Don’t ask for tips. Invest on your own. Do the study. Invest the time and effort. Make mistakes. Become fully baked.

Go for it. 

The whole nine yards. 

Yeah, the whole hog.