I have an awesome luck of dealing with rich, very rich, and can never get rich people!! Ok that was just to get you here. I am planning to pen down some of the things that I have observed about rich people and those who cannot get rich.

Here is one about how the real rich handle RISK and how the ‘cannot get rich’ handle RISK.

The real rich look at all aspects of a transaction. It might mean that they will ask ‘what should be the stop loss even if Subra says wait’ price. Suppose they buy an equity share at Rs. 70 based on MY RESEARCH and recommendation. They will want a price at which they will sell if the circumstances change. For e.g. they may not panic at 50, but will want to know if they should add more. I can answer: a) yes b) no c)I am lost as much as you are, let us play it by the ear.

However, for whatever reasons, they will want to know the BASIS of saying any one of the 3 answers. No, making losses does not hurt them, they are ONLY trying to reduce the probability of such events happening.

Imagine, if I had asked them to buy Vakarenge at Rs. 500. Most of them, no all of them perhaps, would have sold it off at Rs. 300 Simple – they had kept a 40% fall as a moat. Below that they were willing to hold. I ccan still ask them to buy, give a fresh story…but the original story HAD TO END – because if I did not end it, I was ignoring a very important market message – everything is not fine!

Most of them take calculated risk. Some of them will jump headlong wanting to get the steepest part of the risk curve – like Bitcoins. Some will not touch bitcoins saying ‘Subra I like your view on bitcoins – if it is illegal or unregulated, I will stay away! Nothing wrong, but none of them put Rs. 60L in bitcoins (even on a net worth of Rs. 50 crores, Rs. 60L is a big sum of money). A doctor asked me “if it was all right to put Rs. 60L in bitcoins – his LIQUID personal (not business) net worth was ONLY Rs. 2.5 crores!!).

Most of them can run a masterclass in business risk. They are PhDs in the art of self learning and self teaching. Many of them have done a big successful business and at least a few UNSUCCESSFUL business. I guess their discipline in getting out of losing business makes them standout unlike some stupid businessmen who can run businesses funded CONSTANTLY by equity shareholders! That’s no way to manage risk right?