SHARMA JI: ” Hey Kanwal, never invest your money in markets. “
SHARMA JI KA BETA: ” Why Dad “
SHARMA JI: ” Because it is a bad thing to gamble. All these investors are gamblers “
SHARMA JI KA BETA: ” Yes dad, it’s not good thing to gamble off your hard earned money “
Me : ” Dafuq ???????”
The above conversation, although a hypothetical one, is a mirror reflecting the perspective of 95% of people regarding investments.
And seriously, whenever I hear people giving out such an argument, I want to slap the finance godmen who have totally poisoned the conscious of masses.
Investment-The Biggest Lies in Investments That are Being BROADCASTED
Who doesn’t know Bill Gates? Microsoft’s CEO and one of the richest man in the world. But what if I tell you that most of his fortune isn’t from Microsoft, but due to the investments, he has made in various organizations.
The inspiration for this article was the TED-Talk with the title “The biggest lies in investment that you believed in”. It exposed one of the lies that people believe about investments. We, as a tribute to the dedication of all fellow investors and traders around the world, present more.
1. Stock Markets are the Biggest Casinos Where Gamblers Party
This fact is prominent in the uninitiated audie1nce of the world that stock market is a casino and traders just gamble off their money, by rolling a die with a beautiful woman to blow air on your hand for luck, relying on wild intuition due to all the extravaganza of cash flow.
This has seeped into the popular culture by media which fully ignores all the hardcore research and the telescopic and microscopic insights it takes for traders to put their hard earned money into a product(or portfolio).Well, the reality is a lot less sexy and lot brutal. Media often relates investing to buying a stock which is touching the seventh sky, at any price, not taking the cat out of the bag that why it is the way it is, and what can lead its prices to drop down to the infernos of hell.
If done with the right research, investing can be the greatest passive income generator for you, which will ensure that you don’t have to cry over your bank’s heavy interest rate for that car loan or your old age pension’s small amount when the time comes.
2. Borrowing is a SIN. Once You Borrow, You Have Already Paved Your Path Towards Huge Losses And Debt
One of the most prominent prediction that the Nostradamus’ of media have made for every person on earth is that borrowing and investing is hitting your head with a hammer. They take the notion of losing money and returning to be in a greater debt, being uninitiated with the right tools and techniques of borrowing and investing( Such as Margin Loans).
The top research-investors make a killing not because they have a lot of money, but because they have the skill to borrow money at low-interest rates. All it takes to make the stock markets your submissive is the hard work to do research and analysis, and the skill to borrow money, well because both aren’t so easy that you can do in your lunch breaks while playing candy crush on your phone. So either go to a bank or find your rich knight in shining armor(like most of the hedge funds and asset management company’s do).
And no, we aren’t asking you to pull off something like Mohammed Islam. Companies such as Walmart and Ford Motors made their initial setup by borrowing only. So wipe off that egg of your face and work hard.
3. Real Estate Dances on top of Stock Markets
One of the most common myths included in the trading world is that Real Estate is the kingpin of determining how stock travel the charts. Debunking it, we claim that actually, it’s the other way round.
Usually, stock markets are considered somewhat the son of the real estate market. considering the fact that one cannot live with a portfolio of stocks, but can in a home. But the liquidity that stocks offer to make real estate just something you would only want to live in, and not make money through. The usability factor adds a dimension, as a material asset class.
Usually, finance priests and preachers do not take into account all the baby that real estate bores along with it, like property taxes, a new roof, maintenance etc. liquidity is the prominent factor, as a mutual fund can be traded in seconds, but it does not stand with real estate.And well, who wouldn’t like to keep his eggs in multiple baskets, rather than getting just a big basket which MIGHT bore returns in a decade or two.
4. Your our Affair With Stocks Should Last Only an INTRA-DAY
I always feel jumping off the balcony of the balcony of my apartment(which is on the 17th floor by the way) whenever I hear someone claiming how they make money by the so-called short-term trading. This is one of the biggest myth that has been syringed in the consciousness of the masses by media is that if you cannot GAMBLE your way in(or out) of the stock market, then you should cheat your relationship by making it last only for an Intraday.
Kicking in the truth, the term easy money is a myth in stock markets! If you see traders like us making good money, it’s not coming easily. It might come once or twice by sheer luck but in order to be persistent, you have to choose the consistent research oriented and hard work approach.Think and strategize, starting with how much can you lose, before thinking about earning.
Never formulate your trading strategies in accordance to the god-men of media, you will get butchered and your money will cease to exist.
The single greatest edge an investor can have is a long-term orientation.
– Seth Klarman
5. Only B-Schools can get Your Cerebral Cortex to COUNTER-PUNCH the STOCK MARKETS
The straight bullet is that you purchase shares of companies, and if they perform well financially, then your shares increase in value. And the pioneers of financial world do not follow any different basic rule. No, they are not super-humans. No, they do not carry a brain the size of an Atlantic Giant Pumpkin. They are just hard working humans, who research the market well and are in the ever-ready stance to make a move as the market jumps(or falls). As a matter of fact, much of the traditional finance curriculum taught in B-Schools may well make you a less proficient investor. There are certain things( which are the most important ones too) that you can only learn when you start trading in real markets(Like rational perspective), rather than your hostel dorm. Long-term thinking, efficient research and patience are perhaps the best tools available to investors. And these tools can’t be pulled out from the corners of B-School libraries.
Every drop fills the pot. Financial Literacy needs to be inculcated at an early age. The thing is that this is not a gamble. Investment is one of the most research-oriented fields, involving a lot of sweat and pain, and an even sweeter result.
” Very small investments can release the infinite potential that lies in us all”
Start small, go ahead and take the leap. And don’t be Sharma Ji(and neither his son).