It was the winter of 1990. During my Christmas vacations, I was on a visit to my aunt’s place in Guhagar, a beautiful village in Coastal Maharashtra. Mornings were filled with visits to the sea, afternoons under lovely mango trees and nights under the open sky. It was under the open skies that my love affair with the moon, stars, planets and heavenly bodies began.
The “love affair” soon became an intense passion and by the age of 12, I was reading books on Astronomy and watching Discovery Channel. As I grew up, the passion became unwavering; however, it never became my career option as Engineering and MBA were perceived to be more “tangible” and “job-worthy”. I went on to become an Equity Analyst, crunching numbers and navigating through excel spreadsheets rather than romancing stars, planets and galaxies.
“What a waste!!” one may think. A guy with a penchant for stargazing was left gazing at charts and screens. Actually, it wasn’t really a waste. In fact, nothing ever goes waste. My learnings from astronomy helped me in my profession as well. Sounds a bit hard to believe, right? Well, don’t think I’m uttering gibberish. I mean it. The (amateur) astronomer in me laid out some ground rules for the Analyst (and investor) in me.
Accept that you are miniscule in the grand scheme of things
Our Earth is a small planet that goes round the Sun, which is about 1 million times the size of the Earth. However, the Sun is an average-sized star, one among 100 billion other stars that form our galaxy – The Milky Way. Mind-boggling, isn’t it? But wait, there are 125 billion galaxies in the observable universe. The observable universe is the part of the universe that we have been able to see or estimate so far, through our most advanced telescopes. Now that’s mind boggling!! So that just shows how miniscule we are, compared to the extent of the universe.
As a retail equity investor, you are to the stock market what the Earth is to the Universe – miniscule. How much ever you try, you will not be able to influence the market through your BUY or SELL actions. Accept it. The wisdom lies in finding your set of stocks, the quantity you can afford to buy and staying put with those for a considerably long time. Remember, the Earth can’t find another star and start revolving around it. It has to play by the rules.
Stay away from “black-holes” of misinformation and rumor-mongering to become a successful equity investor
Black holes are enormous structures of destruction. They are formed when a huge star dies out after burning up all its fuel. The remnant structure becomes so massive that it begins to suck everything that ventures anywhere near it – stars, planets and even light (that’s unfathomable but I don’t want to get too technical here. The object that is sucked inside a black hole is lost forever and can never come out.
In stock markets as well, there are “black-holes”. These are filled with misinformation, rumors, lies, “social media universities” and many others. People get sucked into these, if they taste success (accidently) earlier on. After that, there’s no coming out. It is so addictive that serious long term value investing becomes a boring task. Such people end up losing money subsequently and then call the stock market a “casino”, “gambling den” and many other bad names. So remember, the more boring investing is, the more fruitful it will be in the longer term.
I have tried to live by these ethos as much as possible throughout my investing journey so far which has helped me to become a better equity investor with every passing day. As informed investors, we have to play the patient game. Always stay loyal to your investing “orbit”, don’t get sucked into a “black-hole” of misinformation, there is a “galaxy” of stocks out there, but the most bankable of those are found only once in many “light-years”. Once you find them, make sure to thank your “stars”. Happy Investing!!
Read more: How Long-term investing helps create life-changing wealth – TOI.