Monday, August 31, 2009

Top Ten Investor Fantasies!

In the past few months if reports are to believed, lakhs of new investors have jumped into the stock market. Especially after they saw a small minority of experienced investors getting extra ordinary returns. All those Happionaires who invested in some value buys shared earlier would have made in excess of 100% already.

New investors have a lot of fantasies and myths in their mind when they enter. I had them too when I started out! Here are a few of them:

1. I will spend time trading every day and won’t do anything else. Isn’t that how hot shot multi-millionaires make money in the movies?

2. My uncle has been investing for several years. I will get tips from him. Of course it doesn’t matter that my uncle is on the verge of bankruptcy for the fourth time and has turned into a alcoholic.

3. I have magical powers and any company I invest in will give me returns in excess of 100% within a week.

4. The first company I invested in gave me 10% in a single day. This isn’t just co-incidence and luck, but because I am investment genius.

5. Everything I hear on the business news channel and everything I read in the newspaper actually needs to be followed.

6. Rich investors watch every single move of the Sensex and know exactly where it is headed. Yogesh Chabria, the Happionaire surely does!

7. I need to get tips from everybody – specially my broker. I don't care about knowedlge, it won't make me rich.

8. My broker exists only to make me rich and wealthy. He loves me a lot.

9. I need to sell all my assets and remove all my money from the bank and pour it into a single share that can rise by 1000%. I read about it on an online forum – it must be true.

10. No need to study the business model, research reports, read or study financial statements. Losers do that!

I had many of the above fantasies when I started. They lead to losses – luckily I started investing with very small amounts. Following any of the above will most certainly lead to losses. You can be smarter than me and learn from my fantasies!

Keep smiling, laughing and having fun!

Yogesh Chabria

Do you have more investor fantasies? Share them here.

See what fellow Happionaires had to say on our previous post A Wealthy Investor Long Back Told Me...


akshay mehta said... is nice to see some humour and good to read your post once again as usual.

My one : Buying a penny stock at Rs. 2 is cheaper than buying a value pick at Rs. 60. Looking at price instead of value is what I used to do, until I became a follower of the Happionaire style of investing.

Ravi P said...

Hello Mr. Yogesh,

It is really nice to see how you are not only touching the aspects of investing but to create a Happionaire - a Person who is happy from inside, who is up to the mark socially.

I want to bring notice to you that if you could elaborate some aspects of hard work and labor we should put in our work and daily jobs. This is key to create a sound financially literate Indian Person.

We will be successful if we follow our dreams, do our jobs & work with great sincerity and hard work. Create a cash flow as source and then invest the happionaire way.

The first step in our lives is not investing rather it is to do our hard work; to be a karta first. Gita gives us a great example of doing our karma by giving our best shot without worrying about returns. Surely return will come our way and goddess Laxmi ji will bless us.

I hope you'll mention about Hard work in your blogs some day.

Amar said...

Ha ha ha This is a very frankly explained article for new comers because you have bull markets & bear markets. i have one more hidden market which i call donkey market which make fool of everyone and make you good losses in ur account.

see whats happening around you why is this happening, whats happening is not digestible so better be active and try to book most of profits at current time which i already did...........

Thanks to you once again for sharing ur knowledge with everyone

Thanks & Regards

rohit said...

If I start with rs 5000 and make 5% everyday on a compounded basis counting 200 trading days, I will be making 64 cr in an years time.

Rahul Malik said...

My Fantasy :

Share Price is a simple game of demand - supply. For ex, if there are 2 buyers and 3 sellers , the share price will go down and vice versa. I suffered losses following this. My Friends : Beware !

kiran said...

My one: Randomly buy 10 shares after consulting your astrologer. Sure way to become rich!

Anonymous said...

hi rahul,

i agree to your way of thinking on supply and demand. but heavy demand will come only on low prices not high prices high prices will always seee pressure becasue there smart investors will try to sell heavy always.........

Gopinath Mavinkurve said...

Good one! Enjoyed this list of myths posing as fantasies. The day trading one is both common and most dangerous one. When my friend found me dabbling in shares, he came back and told me he earns much more than his job in day trading and planned to quit his day job - he was surprised to find me opposing his plans! But that does not mean I did not fantasize about earning daily without having to work. My favourite line is: "My goal in life was to become stinking rich through stock market activities - now I have already achieved 50% of my goal - I am already stinking!"

MovieBug said...

A good Book to read...

Sunil said...

Hello All,

This is quite a funny Post, but guys on a more serious note never make a mistake of leaving your day Job and jump into markets thinking that you can make a good money out of it ... things are not that easy as it looks like. One can always keep their day job and alternatively carry with market activites

I would like to know if there is anyone out there who have documented/recorded the markets events of 2008/09, cause just couple of days back I had lost my file ... Yoeshji I am sure you must have written down the events in details that unfolded in 2008-09along with the market movement

The Happionaire™ Blog said...

Akshay - Very true. I thought that way very long back too.

Ravi - A very important point was raised by you. I have always mentioned that one needs to invest to create wealth and not as a means of daily cash flow. Without work and a goal in life, there is no sense of living. Very well quoted from the Geeta. I feel that the Geeta and other holy books have lot of answers to everyday challenges.

Amarji - Very true. But please remember there are still some good value buys which are ignored. The companies shared earlier have been exited at excellent profits.

Rohit - That is something I am hearing for the first time. Must be a day traders fantasy! Good one.

Rahul: I had that one too. But the issue is that we can't depend on herd psychology as human beings are not at all rational. Also with events and news, things can change within seconds.

Kiran: Or randomly consult your stock broker. The results will be the same.

Gopi - As usual must compliment you on your superb sense of humour. I shared your one with my family and friends. We all couldn't stop laughing.

Sunil - This is a point I have always believed in. Also another issue is to never borrow and invest. Investment should be out of one's own money. You can read this blog archive and will get a time line.

Keep smiling!
Yogesh Chabria