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BubbleVision
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   Topic: Conviction vs Stubborness..
Posted: 15/Sep/2006 at 9:57am |
This is something that i have just read... This is ever true
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"One of the things which first puzzles the novice in stock-market affairs is the constant reference he hears on every side to some mysterious 'They.' He hears traders say, 'They' are buying, 'They' are selling, 'They' made a killing, 'They' are doing nothing. If one ask a trader to whom he refers when he says 'They' he will probably reply, 'The big fellows.' If pressed for a more specific answer he will say, 'The big men in New York.' In reality, the great stock market swings are the result of unseen economic forces, far beyond the power of any man or group of men to control. For fundamentally the stock market as a game is not a game between the big fellows and the little fellows... It is an unequal contest between those who know the game and those who do not.
"On the one side are those who know that stocks ought to be bought when they are low and below the line of real values, and have the courage to buy them at such times. They know, too, that stocks ought to be sold, however attractive they may appear, when they are high and above the line of real values, and have the courage to sell them. On the other side are those who play the game but who do not know, or have not the courage to follow, the principles which lead to speculative success — the sucker public." -- Ch. VII, "Beating the Stock Market" by R. W. McNeel, excerpt. Copyright 1926.
Edited by BubbleVision - 15/Sep/2006 at 9:58am
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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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reetesh
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Posted: 15/Sep/2006 at 11:56am |
I agree what ever is written above, we can read all this and know what is good and bad and apply them in our stock market activity, but one and the most important thing that nobody teaches and can be tought is "Conviction".... without this becoming a good investor is not possible.. leave a side great investor..
Regards,
Reetesh.
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When going gets tough, that’s when tough (people) gets going.
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kulman
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Posted: 16/Sep/2006 at 12:21pm |
Very true Reetesh jee
Conviction is very very important and the most difficult because it's all in the mind.
As the popular saying goes:
SHARE BAZAAR, BHAAV AUR BHAVANAO KA KHEL HAIN !
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Life can only be understood backwards—but it must be lived forwards
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basant
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Posted: 16/Sep/2006 at 12:24pm |
The 10 letter word "conviction" can come by only through another 10 letter word "experience". It cannot be taught or learnt. An investor has to see his portfolio fall by 40% 50% before he sells out. Once he sells out the stocks would go up. The next time his portfolio falls by 40% - 50% he would know what to do and that is when he can tell the world ' See my conviction".
There is a dividing line between conviction and stubborness. Most of the
big boys become stubborn and that brings about their downfall. Ketan Pareikh was an example. After the do com he could have cut his positions and walked away but he wanted to hold the market. At one point he was long 10 million shares of HFCL @ Rs 1500. ALl this on badla (margin financing).
When a seasoned investor takes a view he does not want to change it until it is too late. But the markets do not listen to any one. We are all aware of how certain sections of the market spread apnic at 8800. They are still thinking what to do. Now once you have missed the upmove human tendency (reading does not help here) will make you look for stocks that have not gone up and they have not gone up for a reason.
As a result people get more confused and load onto DUDD stocks.
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kulman
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Posted: 16/Sep/2006 at 12:36pm |
The human beings become victim of "mental heuristics" and take impulsive investment decisions.
Now that media is crying "index levels of 12000 breached", the guys who sold at 8800 will reenter penny stocks because of the feeling "can't miss the rally". Why, because they see that their cousins, colleagues, juniors, seniors, neighbours all getting notionally rich!!
On this subject, let's go back to the master:
The worst of the seven deadly sins must be ENVY, because it makes the person committing the sin suffer more than anyone else! (at least GLUTTONY, which I could fault myself with at times, and possibly LUST had some upsides for the sinner!!)--Warren Buffet
Edited by kulman - 16/Sep/2006 at 12:37pm
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Life can only be understood backwards—but it must be lived forwards
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BubbleVision
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Posted: 16/Sep/2006 at 12:51pm |
That is why it pays to be disciplined in our approach and should look at the markets objectively. Only mental strength is the game between winning and losing. This is where the ED quote (posted in ED forum -- read it) of Pain and Joy helps me...
As it is rightly said in the above paragraph i posted...
It is an unequal contest between those who know the game and those who do not.
I once heard -- In a Stock market.. two kinds of people are present.. one with experience and others with money.. after a while .. people with experience have the money and people who earlier had money get the experience .. I hope i am clear..
All the above posts are great.. keep going guys so that we may become mentally strong after reading really inspiring stuff...
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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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kulman
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Posted: 16/Sep/2006 at 12:58pm |
Hmmm... good one BubbleVision: In a Stock market.. two kinds of people are present.. one with experience and others with money.. after a while .. people with experience have the money and people who earlier had money get the experience .....
This forum "TheEquityDesk" would help us in gathering knowledge based on other's experiences. This forum, as I stated earlier shall not become a stock-tips kind of chat room.
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Life can only be understood backwards—but it must be lived forwards
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reetesh
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Posted: 16/Sep/2006 at 1:02pm |
MR. Basant, your last post has confused me, rather than solving my problem.
You said there is very fine line dividing Conviction and Stubborn, and mind you, you have chossen the worst kind of investor (Ketan Parekh "Market Terrorist") to give example, I dont think he has any relevance as far as investor is concern, no investor can say "I am an investor but with margin funding or financed money" at best he could be smart trader thats what he was....
Now lets talk about fine line dividing Conviction and Stubborn.. Rakesh bought CRISIL in early 90`s and that did`nt moved untill 2000 or so till 99 you can say he was stubborn he is not selling this stock is worth peanuts and in 2006 we all including him praise him for his Investment in CRISIL, now look at buffet he bought so many stocks in 70`s and still holding on as his biggest holding I think he would have seen so many Kentan Pare-kh and so many down turns in the market...
Regards,
Reetesh..
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