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The magic of Good Investing.

People always say that one hasn’t learnt about investing unless they have invested in the markets for long – until one has invested, lost money, earned money, booked profits, in the markets – both the Up and the Down!

I always add that one hasn’t really “experienced” investing until one has the full experience of managing other people’s money and understood how to handle their EXPECTATIONS, especially in a bad market where you had over promised, or the client had over expected.

I’ve been an investor, sub-broker, main broker, investment adviser, trader, and a brokerage business owner for a long time. I must say that my experience is pretty rounded. It is rounded but yet, it is not complete.

Let me explain :
I’m a slow and boring investor.  I can take 4 months to decide to buy a share, and hold it for 25 years after deciding to buy it. That is pretty slow stuff.

With the spread of the internet, I’m now sent a link by someone almost everyday which either describes the route or talks about getting rich fast.

I do read all of these blogs. Most of these blogs are written by people who may be traders – momentum traders, positional traders, journalists, historians or veteran investors.

Some of the writers are extremely famous, some not so famous, but they are all awesome individuals with experience in investing and perhaps a deep love for the markets and an abundance of wisdom.

Interpreting what they mean is really hard. Knowledge can be easily shared. To share wisdom is much harder.
Wisdom is often best assimilated only with experience.

One of the most widely given advice about is pretty obvious and straightforward. Do a SIP in a large cap fund, and you have NO RISK. Nice. The first part of the investment journey is simply a long slog up one big incline.

So the advice is : “Be cautious and don’t rush into investing”. “Keep your pace in check”. “Do not invest in mid cap and small cap funds”. “Work with stop loss”. “Be careful when writing options”. Great.

This is obviously good advice and I agree. However applying it in practice is a challenge.

What does “being cautious” mean ? What does “keep your pace in control ” really mean ?

It means different things to different people. It means different things to a long term investor and it should mean something different to a newbie trader.

It means something different to a 23 year old rookie and something different to a 50 year old looking to invest for his retirement.

It can even mean different things to the same person on a given day. It could have meant something different to the person giving the advice.

And herein lies the challenge. Do you really know the story of the man/woman giving you the advice ?
One really needs to put oneself into the shoes of the person giving this advice and understand where he/she is coming from.

Are you made from the same fabric that he/she giving the advice is made off ?

Can you give the words the same meaning that he/she intends to give ?

It’s well meaning and correct advice but am I able to truly apply it to myself in the true sense based on my investment understanding and experience so far?

If I make make the mistake of not understanding the word “caution” and go out “too cautiously”, I could lose my capital. If I go out “too fast” I could finish my capital at age 72 – then what? I’ve done both. And I know this. I have this part of the Wisdom !

That then, is the challenge for the trader. Then there is need to find your own right pace essentially based on your experience and training – how did we manage to invest from an index of 3k to21k and see it fall from 21k to 9k.

To find your own perfect pace is the key.

It is a pace where the whole can become more than the sum of the parts. It is poetry.

Mess up learning and pace of investing even for a small part of the investing journey and one might never reach ones true potential. It isn’t just about strength or self-motivation or dreams and desires. It’s about hitting ones right pace at every moment of that long undulating investing road.

Only ones gut can tell one what is too slow and what is too fast. But then even gut feelings can go wrong. IN fact gut goes wrong most of the time. You need good excel sheets and advisers who can guide you through the route. A stop watch and log book are essential in investing. Find yours.

That then again, is the beauty of this game. It is so hard and so long that there is only so much planning one can do.

Go out too slow and one will not fulfill ones true potential, go out too fast and one might crash and burn. Have too much in debt, and not reach your goals, have too little of debt and a long recession forces you to sell your shares at the nadir of the market.

People ask me why I keep coming back to be in this game after giving up being a broker. I think I’m slowly coming to figuring out an answer in verbal terms.

To hit upon the right pace and fulfill your true potential in investing is like finding an elixir to everlasting happiness. It is pure magic. Many have found it. Many are struggling to find it. But the search is universal.

To go through life, doing at each point, exactly what one should be doing, is magic.

Hitting the right pace at investing is much like hitting the right pace in life. It is like magic.

It is our search for wisdom. It is our search for fulfillment.
It is our search for happiness.

To invest to your true potential. To reach the best investing potential. I haven’t found it. But I know it exists.

I’m searching for it.

this post is inspired by Amit Seth…a big time businessman and a successful Comrades runner.