I’ll give you some examples, followed by comments. Since this article is about learning, let’s start with this:
“What we learn from history is that people don’t learn from history.” When investors get either too fearful or too greedy, they sometimes hide behind the notion that “This time it’s different.” Usually they regret it.
On fear and greed
“Two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. … We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” This is the simple recipe for being a contrarian investor. Continue reading
I have done series of random posts on this topic; it always questions the investor’s behavioral aspect. The term “Greed” may not be a better word for the society but as Gordon Gekko said “The point is, ladies and gentleman, that greed, for lack of a better word, is good.
Sharing you a classic example of an institutional investor – NatWest markets bought shares of HDFC Bank in 1995 for Rs.40 crores.
Few years down the line, in 1999, they sold the same for Rs.400 crores. Money multiplied by 10 times in 5 years
NatWest might have patted themselves on their back for such a wise decision. It’s a rarity to make 10X money in 5 years. Continue reading
Sharing some one liner sales pitches that became famous on Wall Street and people should really avoid them & most of them used by many advisory firms and they have embraced a culture of sales and monthly quotas. If you find these pitches be afraid it’s a caveat…..
- “It’s like a CD.”
- “Buying on margin will greatly increase your returns.”
- “This fund did really well last year.”
- “As long as the music is playing, you have to get up and dance.”
- “Do you want the confirmation sent to your office or your mansion?” Continue reading