When the masters play, they make it look easy. In summary, we need to understand that the game of investing requires a lot of hard work and dedicated effort. Maintaining a decision journal in the initial years might also be very useful. The way to build the right psychology is to reflect on your past buy/sell decisions, the reasons why you took them and what would you do differently if the same situation arose again. Two people buying the same stock at the same time at the same price may end up with completely different results as one may be able to hold on through many ups and downs and the other may sell in panic or euphoria. Inculcate the right mindset: The biggest determinant of returns over longer periods comes from investor psychology.Learn the language of investing: You need to be able to read the financial statements.If this was easy, if there was one formula, one way to do it, we’d all be zillionaires.” I get very nervous about the retail investor, the average investor because it’s really, really hard. The legendary trader Paul Tudor Jones once said, “This skill is not something that they teach in business schools. Repeated exposure to investment gyan and discussion provides an illusion of knowledge. The same thing applies to investing as well. You need to live through it, experiment with it and then slowly after a few times, you will get a hang of it. How hot should the oil be? How much do you beat the eggs? How much salt to add? How long should you fry one side? When do you flip sides? None of this can be learnt from watching omelette-making videos. Making a great omelette is really not easy. #SCUTTLEBUTT CORNER HOW TO#It may not even occur to you that you may not know how to even light the gas stove. It is like if you see a cookery show about making an omelette every day for six months, you will start getting a feeling that you are an expert at it. The availability of information today, especially on social media, is so much that just by repeated exposure people tend to get a feeling of expertise. He is perhaps the greatest tennis player in the history of the game". The tennis director turned around and said, "Ma'am, yesterday the person you saw here was Roger Federer. And here she was huffing and puffing and yet not able to make a single shot. The guy did not even seem to be making an effort. She went to complain to the tennis director saying that the game which she saw being played by the young man seemed so easy. It was either sailing wide of the court or hitting the bottom of the net. To her dismay, the lady found that the game was really difficult. The next day she approached the tennis director at the country club who promptly enrolled her on the tennis program. The lady decided to try her hand at the sport. The young man who was playing seemed to be doing it effortlessly. Now that they were retired and extremely wealthy, they thought that picking up tennis would be a good thing. They sold their business and chose a peaceful retired life. This couple had spent their entire life engrossed in their business and had never really followed the sport. One day an elderly couple saw a young man, probably in his early thirties, playing tennis in one of the corner courts of their exclusive country club in Florida.
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