August 24, 2015 was a Black Monday for the stock markets across the world. I knew NOTHING about it.
As a financial advisor and with more than 70% of my money invested in stocks, this would surely shock you.
Was I stranded on some deserted island or lost in deep African jungles? No. I was very much in town and working. So how did I miss one of the biggest crash in the stock market in many years?
Two reasons:
First... I have been in the stock markets for around 25 years now. And, in these more than two decades, I have witnessed many such historic falls — and many historic gains too.
So I have become immune to these wild movements. They neither scare me nor turn me ecstatic. I can now maintain a zen-like calmness among both turmoil and euphoria.
How is that possible?
Because, in a growing economy like India, these are a mere short term volatility. In due course of time, they will even out. In due course of time, markets will trend upwards.
That's the nature of the stock markets. You have to learn to live with these dramatic ups and downs.
In 1989, when I started working and first dabbled in stocks, the BSE Sensex was 400 (yes, four hundred only, its' not a typo error). Today, 26 years later, BSE Sensex has sailed through numerous peaks and bottoms, to around 26,000. That's 65 times growth in the value or 17%+ returns per annum... and of course tax-free.
Even if I had earned 11% p.a. returns from fixed deposits, I would multiplied my money only 15 times... and of course taxable.
This difference is simply too big to ignore.
Second reason... and this is important:
I have no interest in the stock "markets"... except as a tool towards my objective.
What is my objective?
My objective is to make money from other peoples' businesses. Be it Tata, Birla, Reliance, Infosys, Google, Apple, Facebook and others.
So I study economies.
So I study businesses.
So I study companies.
So I study mutual funds.
This will make me money. So that is where I focus. And that is where I was on 24th of August 2015 when world over the markets cracked and crashed, losing trillions of dollars in market value.
Movement in stock prices don't impact the businesses or their profits.
Traders, playing the stock market game, have no consequence on any company's growth potential.
Buyers and sellers will come and go. But good businesses and good managements will be here for many decades.
What happens at the stock markets on a day-to-day basis, is completely and absolutely immaterial, irrelevant, and inconsequential to making money from stocks.
I hope you appreciate the BIG... BIG... DIFFERENCE between "studying stocks" and "studying stock markets".
So I DON'T study or track the 'stock markets'. Stock markets are merely a place to go and buy businesses. They are just a tool to execute my plans. Nothing more. Nothing less.
In fact, but for the many panic-stricken emails and phone calls, I would have said or written nothing about this crash in the stock markets.
As a financial advisor and with more than 70% of my money invested in stocks, this would surely shock you.
Was I stranded on some deserted island or lost in deep African jungles? No. I was very much in town and working. So how did I miss one of the biggest crash in the stock market in many years?
Two reasons:
First... I have been in the stock markets for around 25 years now. And, in these more than two decades, I have witnessed many such historic falls — and many historic gains too.
So I have become immune to these wild movements. They neither scare me nor turn me ecstatic. I can now maintain a zen-like calmness among both turmoil and euphoria.
How is that possible?
Because, in a growing economy like India, these are a mere short term volatility. In due course of time, they will even out. In due course of time, markets will trend upwards.
That's the nature of the stock markets. You have to learn to live with these dramatic ups and downs.
In 1989, when I started working and first dabbled in stocks, the BSE Sensex was 400 (yes, four hundred only, its' not a typo error). Today, 26 years later, BSE Sensex has sailed through numerous peaks and bottoms, to around 26,000. That's 65 times growth in the value or 17%+ returns per annum... and of course tax-free.
Even if I had earned 11% p.a. returns from fixed deposits, I would multiplied my money only 15 times... and of course taxable.
This difference is simply too big to ignore.
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| Why I missed the historic stock market fall on manic Black Monday? |
Second reason... and this is important:
I have no interest in the stock "markets"... except as a tool towards my objective.
What is my objective?
My objective is to make money from other peoples' businesses. Be it Tata, Birla, Reliance, Infosys, Google, Apple, Facebook and others.
So I study economies.
So I study businesses.
So I study companies.
So I study mutual funds.
This will make me money. So that is where I focus. And that is where I was on 24th of August 2015 when world over the markets cracked and crashed, losing trillions of dollars in market value.
Movement in stock prices don't impact the businesses or their profits.
Traders, playing the stock market game, have no consequence on any company's growth potential.
Buyers and sellers will come and go. But good businesses and good managements will be here for many decades.
What happens at the stock markets on a day-to-day basis, is completely and absolutely immaterial, irrelevant, and inconsequential to making money from stocks.
I hope you appreciate the BIG... BIG... DIFFERENCE between "studying stocks" and "studying stock markets".
So I DON'T study or track the 'stock markets'. Stock markets are merely a place to go and buy businesses. They are just a tool to execute my plans. Nothing more. Nothing less.
In fact, but for the many panic-stricken emails and phone calls, I would have said or written nothing about this crash in the stock markets.
