After a gap of over a year, I decided to accept CNBC's offer to be a speaker at an investor camp in Agra. The city of the Taj and the opportunity it offered to visit the beautiful monument played no small a part in my decision. Another reason for accepting was the opportunity it provides to interact with retail investors.
Once again, I was struck by the picture that most retail investors have of the stock markets. It seems, most think of the markets as the playground of manipulators - with no "logic" applying to it. This, despite the fact that the Indian equity markets are one of the best regulated and technologically most advanced in the world. The preponderant impression is that since the investor has lost money (or atleast failed to make money despite a huge rally), the problem must lie with the markets since the investor cannot be irrational. In other words, I'm ok. you're not.
As any market participant knows, the markets are far from perfect. There are sharks, and manipulators operating in the market. However, these form the minority. Further, the market operates with a logic of its own, that investors can understand and make money off. That requires effort and patience, and like every other art, a lot of practice - something most investors are loathe to do. Instead, it is much easier to blame the system.
An analogy comes to mind. Most non-swimmers would not jump into a rapidly flowing river without help or proper equipment. They would also not blame the tides, rapids, or whirlpools that they may encounter along the way on malicious forces. Instead, they would blame themselves for not making the effort to learn how to negotiate these. To me, the markets are like the river. You either figure out how to swim, take a boat, or use the bridge. You don't jump in if you cannot swim. I wish schools would make personal financial management courses mandatory early in life.
Till then, we as market participants, are doomed to be looked upon with suspicion and opprobrium albeit tinged with a bit of envy
1 comment:
very true..
as Peter Lynch puts it "its very rare to find an investor who would say that I lost money because irrespective of everything else I was not upto the mark"
Its only when you start taking responsibility that you start learning..
Rahul
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