Once when I was traveling in a cab passing by the Fountain area in Mumbai with my Uncle & suddenly I saw in front of me, a huge building having three alphabets shining on the top of it. It was not the first time that I saw those three alphabets together, I had seen that building in a movie & once in a newspaper, as well.
Out of curiosity, I asked my Uncle, “What do these three alphabets stand for?” and my Uncle answered, “Bombay Stock Exchange”.
“What do people do here, why this building is so famous?”, were the next questions coming to my mind. He tried to explain about how trading in shares is done at stock exchanges and I could hardly understand anything about what he was saying.
“What is a share?”, I asked with a questioning look on my face.
“Dear, you’ll understand this over a period of time but my advice is that never ever enter into this trap, people always lose money here.”, was his reply which locked all the doors of my mind to ask any more questions.
Well, is it true that people always lose money in stock market?
I got the answer to this question after getting to know about ace investors like Warren Buffet, Rakesh Jhunjhunwala & many more.
What different do they do then the rest of the world which makes them successful where 90% of the people are failing? It’s simple, they have mastered the art of accepting the brutal truth of the stock market.
We have studied that market is driven by demand and supply forces. But in reality it’s more than that, ‘Greed & Fear’ is what drives the market, the sooner we realise this, the better it is.
Here comes another cruel truth, the media perpetuates that, if you’re smart enough, you can always predict the market’s moves and avoid its downdrafts.
But the reality is that no one can time the market.
Peter Lynch said correctly, “I can’t recall ever once having seen the name of a market timer on Forbes’ annual list of the richest people in the world. If it were truly possible to predict corrections, you’d think somebody would have made billions by doing it.”
“The stock market is a device for transfering money from the impatient to the patient”, says Warren Buffet. So another harsh reality is that patience is more important than intelligence in stock market. Your fear of losing money should not be more than your desire to earn it.
What’s the learning?
Losing money in stock market is not a bad thing but how you react when you lose can make you mentally strong or it can make you strongly mental.
For those who always blame others for their losses, it’s a trap but for others it’s a place to make money.
For some it’s a place to lose all the savings of their life but for others it’s a place to create wealth.
To some it gives a hopeless end but to others, an endless hope.
So do have the guts to accept these bitter truths of the stock market and to move on.
This is stock market for you – it can either make you or break you!!!