Category Archives: Emotions

Nadir Non-Focus

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Scared to enter?

Things look gloomy?

Forever?

NO.

Look at History.

Markets are where they are despite what’s happened. 

Governments, scams, frauds, bribes, wars, disasters – the list is endless. 

In the end, we are still where we are.

Is that good news?

YES.

What does it mean?

Growth – reflects in the corresponding market – eventually. 

Sure – we might not be growing at 7%+.

We definitely are growing at 5%+, perhaps at 5.5%+.

In a few years, growth could well accelerate.

Why?

Earning hands are growing.

So are aspirations. 

The consumption story in India is alive and kicking. 

What we’re seeing currently is a result of eighteen months of bad news. 

Such a long spate of negative stuff churning out gets the morale down. 

People start letting go of their holdings in despair. 

Maybe there’s another eighteen months of negativity left – who knows. 

That’s not the right question.

Don’t worry yourself about the bottom and when and where it is going to come. 

Why?

Please answer something far more fundamental first.

If you don’t have the courage to go in at this level (with small quanta of course, we do follow the small entry quantum strategy)…

…do you really thing…

…that you will muster up…

…anything remotely resembling courage…

…at a number that is let’s say 20% below current levels?

Gotcha there?

Listening to Time

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Market work…

…has some eccentricities.

One can’t work in the markets all the time.

That’s normal, right?

Well, yes and no. 

At a place of work, one should be able to work. 

Markets don’t always allow work.

So don’t other work places, sure. 

At other times, you don’t feel like doing market work. 

Aha. 

This happens multiple time a year. 

What do we do here?

We create an environment that incorporates this eventuality seamlessly. 

First up, why is this incorporation essential?

Let’s assume that we need to work in the markets all the time. 

When we don’t feel like, and we have to, well, then, we are likely to make mistakes. 

Read mistakes as losses. 

Mistakes in the market translate into losses. 

(Amongst other things), we are in the markets to …

… minimize losses. 

Therefore, when we don’t feel like doing market work …

… we just sheer don’t do it. 

So, back to square one, how do we incorporate this seamlessly?

By making market work our secondary source of income.

Our basic income needs to be sorted through our primary source. 

Now, we can shut off the markets at will without this affecting our basic income. Whether we can also emotionally detach is a discussion for another day. 

There are times when one just doesn’t feel like opening up the terminal. 

Listen to such times. 

Shut out the markets at will…

…only to open them up again when they’re a go for you.

We’re still at step 1, which you’ve just cleared for yourself. 

Now we try and gauge whether times are such that markets allow work.

Listen to such times. 

When you feel like working and markets allow you to work, go all out. Exhaust existing work potential. 

When you feel like working, and markets don’t allow work, do other stuff. Get your research ready. Become poised. 

Sooner than later, your action criteria will be met…

…and you will be able to act. 

Nature of the Beast

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Stocks…

…crash.

It’s the nature of the beast.

Stocks also multiply.

For stocks to multiply, one needs to do something.

What is that something?

One needs to buy stocks when they crash.

Let me give you an example. 

Let’s assume markets are on a high, and there’s euphoria.

Excel Propionics is cruising at a 1000.

The prevailing euphoria seeps into your brain, and you buy Propionics at a 1000.

For Propionics to multiply 10 times in your lifetime, it will now need to reach 10,000.

Likely? Wait.

Cut to now.

Stocks are crashing. 

The same stock, Excel Propionics, now crawls at 450.

You have studied it. 

It’s debt-free.

Positive cash-flow.

Ratios are good.

Numbers are double-digit.

Leverage is low.

Management is shareholder-friendly. 

You start buying at 450. 

By the time the crash is through, you have bought many times, and your buying average is 333.

For Propionics to multiply 10 times in your lifetime, it will now need to rise to 3330.

Which event is more likely to happen?

Just answer intuitively.

Of course, the second scenario is more likely to play out than the first one. In the second scenario, Propionics will need to peak 3 times lower.

Simple?

No!

Try buying in a crash.

You are shaken up. 

There’s so much pessimism going around.

Rumours, stories, whatsapps, opinions. The whole world has become an authority on where this market is going to go, and you are dying from inside.

What’s killing you?

The hiding that your existing portfolio is taking, that’s what’s killing you.

Are you liquid?

No?

Very bad. 

Why aren’t you liquid?

Create this circumstance for yourself.

Be liquid.

Optimally, be liquid for life. 

Then, you will look forward to a crash, because that’s when you will use your liquidity copiously, to buy quality stocks, or to improve the buying averages of the already existing quality stocks in your folio. 

How do you get liquid for life?

You employ the small entry quantum strategy.

Yes, that’s about right. 

We’ve been speaking about this strategy in this space for the last two years.

Read up!

🙂

Dance the Bawwdy Music!

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..dance the body music

makes you feel so happy

dance the body music

music makes you happy

hear the music play

feel your body sway

hear the dj say

oh what a big smash big smash

dance the body music…

 

Osibisa, was it, late ‘70s?

Yup. 

What an cool swingy number, sung by an unforgettable band!

Disco beat. Rhythm. Easy peasy lyrics. Synth. Floor’s going crazy. Song’s all over the people. People are all over the song. 

Euphoria. 

Why are we talking about it?

Music or euphoria?

Euphoria. 

I used the music element to paint a picture of euphoria in your mind.

What is it about euphoria?

Why does it push me on alert?

Is it that I don’t wish to enjoy my life?

What could I have against euphoria?

I’ll tell you. 

Before I tell you, I’d like to mention that I love the feeling. 

It fantastic being in the feeling. I’ve got one eye on my alerts though. 

WHY?

We make our biggest mistakes when hit by Euphoria. 

Yes. 

Surprised?

Don’t be. 

Under the influence of Euphoria, our biochemistry is so, so different. 

We’re far from peak. 

Our defences are down. 

We are highly capable of plunging into…an abyss…oblivion…call it what you feel is befitting. 

We let go of safety. 

We bet big. 

We bet dangerous. 

We bet the farm.

That’s what euphoria can do to us. 

I do feel euphoric, at times. 

A trade’s gone well. 

A deal’s come through. 

Stability at home. 

Euphoria. 

However…

…as I told you…

…one eye is on my alerts. 

If even a single thought emerges of betting big, bigger than my normal size, well, my predefined red-alert also goes up with such a thought. 

I see my alert’s red flare, and the unwanted thought subsides. 

I am able to sick to within the confines of my position-size rule.

If even one thought emerges of trying a new untested line, just because all current lines are doing ok, well, my predefined strategy saturation alert also goes up with such a thought. 

I remind myself that I’ve decided upon financial strategy saturation, and don’t plan to add a new line, at least not in a hurry or upon an impulse. 

I’m able to stick to my strategy saturation decision. 

Are you understanding what I’m trying to tell you?

If yes, I’m so happy for you. 

You’re not leaving it for later. You’re understanding it without being hit by the aftermath of a decision taken under the influence of euphoria. 

Cheers mate!

🙂

Frozen

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Frozen? 

It’s ok. 

Breathe. 

You need to acknowledge that you’re frozen. 

Without that, the next step won’t come. 

It’s normal to freeze sometimes. Just acknowledge it. Then learn. 

For example, I acknowledge that I’m currently frozen wrt to the USDINR short trade. Missed entry. Next opportunity to enter never developed for me, and the underlying is currently in free fall. Don’t have the guts to short it at this level. Yeah, I’m frozen all right.

However, the fact that I’m acknowledging it opens up the learning window. 

Why did I miss entry?

I know why I froze. Fear. What I need to understand is why I allowed a situation to develop that would lead to fear. 

Ok. 

Was running super busy. 

Neglected the underlying. 

Kept postponing entry… 

… till free-fall started. 

It’s good to be busy. 

Hmmm, so this can happen again. 

How do I stop this from happening again? 

If I ID a setup, I need to take it. 

No second-guessing. 

What about strategy? 

Meaning, am I going with a short strategy for USDINR? Or am I keeping the window open for a long strategy?

See, that’s it.

Keeping short and long windows open makes me second-guess all the time. 

So can I go in one-direction wrt USDINR all the time? 

What speaks for it? 

Underlying is falling from a height. Good. 

Short only means no second-guessing. You just go short, period. 

Stoploss will save ruin. 

Not nipping profits in the bud will amass fortunes. 

Can the underlying keep falling over the next few years? 

Why not? Modi’s looking set for 2019. 

Hmmm, so a short only strategy has a lot going for itself. 

There’s more. Future month contracts are quoted at a premium. The premium evaporates over the current month. This move is in your favour if you’re short. 

Ok, enough. 

Yeah, there’s enough on the table to warrant a short only strategy for USDINR. 

SEE? 

Learning process. 

Why did it happen?

Because I acknowledged that I had frozen. 

Now, my strategy is more fine-tuned and I’m probably less prone to second-guessing. 

You need to pull off such stuff when you freeze. 

Use the freeze to evolve. 

Lost for Words, Mr. Nath? 

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Yeah, sometimes I really am. 

With very few people, and in very few situations. 

Call it Karma. 

That’s not the point. 

In the event you find yourself in a similar situation, we’re here to size up options. 

What do we fall back on? 

Silence. 

In its solitude, a thought processes emerges. 

What are we looking for? 

Cool, calm straight-forward common sense.

Found it? 

It will speak to you. 

Let it. 

It’s got the words, remember? You don’t. 

Listen to it. 

What’s it telling you to do? 

Difficult? 

Can you do it? A yes is great here. You’re sorted already. 

No? 

Next option. 

Nothing. 

Can you sit tight? Doing nothing? Till your path emerges? Yes is good. 

No? 

Ok. 

Can you stop yourself from doing the wrong thing? 

Wrong? 

Violence, anger etc. You got it? 

How, you ask? 

Occupy yourself with something else more captivating. Possible? A yes here is your last “amicable” option. 

If it’s still a no, you might want to consider new company, or a new environment. 

Sometimes, we get stuck in life. With a person. And / or in a situation. For good reasons, we can’t get out. What’s the silver lining? 

Learning. 

Our difficult situation is ironing out some fault within us. As long as the fault remains, the situation seems desperate. No fault anymore? Situation vanishes. 

It’s called evolution. 

We don’t evolve for free.

Similarly, we don’t learn to navigate through the markets for free. 

Difficult situations teach us. They cost money.

We survive small losses through the learning process, to win big later. We want the learning process to come at an early stage, when the stakes are low. 

The biggest wins come when we use our evolution to capitalize upon a difficult situation, because we know its nuances. That’s good for the markets. 

In real life it won’t pay to take advantage of somebody’s nuances. That’s actually devolving. 

Maintaining perspective between market life and real life is an evolutionary exercise too. 

Yes, Jack Ma is a Champion

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I only know one thing about Jack Ma.

He didn’t give up.

That’s enough for me.

Jack Ma is a champion.

Champions fight till it works.

They’re somehow able to extract extra energy from somewhere, and stand up again, that umpteenth time.

That is what separates champions from others.

Look at Abraham Lincoln’s example.

Steve Jobs.

Cassius Clay.

Recently, West Indies cricket.

List is big.

What do champions have in common?

They don’t give up.

They keep at it.

They keep throwing potentially knockout punches… till something gives.

Sure, champions cry.

They too are human.

It’s ok to cry.

One’s system cleanses.

Tears only make them fight harder.

So what’s the champion gene?

Meaning, what makes a champion keep going at it, despite disappointments, tapping extra energy out of nowhere to keep landing potentially knockout punches?

Yes, what are the dynamics?

Body and mind are functioning at full-stretch. Perhaps beyond. What is this beyond? We are a continuum, remember. We flow. The Bell-curve of our energy, at full-stretch, actually flows to a certain extent into 4th, 5th, 6th or nth dimensions. You’ll either have to take my word for it, or experience it for yourself.

Mind over matter, ever heard that one?

Describes the above phenomenon.

Resonance.

You vibrate at a common frequency with something, and are able to tap energy from that something.

That’s what happens.

For it to happen, full-stretch needs to be there.

Bell-curve needs to go over and beyond.

Feel the energy coming in.

Feel that tiredness go away.

Land the knockout punch, you champion.

Limits will keep you Safe

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Safety is under-rated.

People scoff… at safety.

Ask someone to belt-up.

Or, ask xyz to take a backup.

Emergency fund, anyone?

Insurance?

Plan B?

Is anyone really interested?

Ok, don’t have a plan B. Fine.

Then, you need to watch your plan A like a hawk.

You need to install safety nets.

One such net is a limit.

Limit movement of funds.

Nowadays, this takes but a few online clicks. Setting fund-movement limits in your netbanking is not difficult at all.

What does a limit do?

It says ballyhoo to your emotions.

Greedy?

Too bad, fellow, funds more than your defined limits can’t leave your savings account, in case you wished these to depart for your trading account.

So, greed is in check. With force. Order of the day.

Limits will keep you safe.

Over-optimistic?

Same check.

Limits will keep you safe.

So on and so forth.

A little self-control is required though.

You’re not going to tamper with your limit, right?

Right.

Patience and Nerves Anyone?

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As someone I look up to put it recently – “It’s a game of patience and nerves!”

What is?

The stock-market. 

For whom?

The long-term investor. 

Do you have any?

What?

Patience, or nerves, or both?

You do?

Well, then you’ll do well in the markets, over the long-term. 

We look for complication. Meanwhile, we forget the basics. 

These are basics. 

If you’re not patient, you’ll for example jump into a stock at the wrong time, or you’ll jump out of it too early, or what have you. 

If you don’t have patience, well, develop it. 

If you can’t, do something else instead. Trade. Don’t long-term-invest then. 

If you cannot develop patience, you are not cut out to be a long-term holder. 

One method to cause the tree of patience to grow in you is to create the correct environment. 

Just don’t do anything that will make you jump. 

Invest your sur-sur-plus, money that is then pickled away, money that you won’t miss, yearn for or require over the very long-term. 

Go in with margin of safety. 

Stay in a stock you’ve singled out and entered until there’s a glaring reason to exit. Try to exit upon a high. This is the market. Highs are its nature. So are lows. That means that highs come. Wait for them to come, to exit from anything you need to exit from. 

Nervers, well, they come into play if you’ve not invested with margin of safety. 

I do remember two instances though, where everyone’s nerves were tested. October 2008, and March 2009. At these times, stocks sold for a song. Good ones and bad ones alike. Fear did the rounds, extreme fear. That’s what fear does. It creates once-in-a-lifetime opportunities. Take them. Maintain a clear head. Your nerves of steel will do that for you. Create an environment for your nerves to become strong. Or, perhaps expressed another way, create an environment where any weakness in your nerves is not required to show itself, and gets subdued into extinction. 

How?

Again, just go in with your sur-sur-plus. You’re not going to miss this money even if the sky is falling upon your head. And you’ve gone in with margin of safety. Your nerves will stay intact. 

Ensure your basics. Allow them to shine. 

The rest will take care of itself. 

Good investing. 🙂

Did You Hear About the Last Mile?

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Yawn.

So you did, huh?

In investing?

No?

Yeah, I just thought about it.

Sharing it with you.

Churning, churning, churning…

… inside.

As you do your due diligence, information churns inside of you.

What is it that says yes, I’m investing?

Where does that go-ahead moment happen?

In the last mile.

Inside of you.

This is not to take away anything from your due diligence.

DD is central.

Very important.

However, last mile is important too.

One needs to respect it.

First, one needs to know about it.

Knowing about it will stop you from pushing an investment.

Don’t push… …in the markets.

Just be.

Take the shape of the container. Your container is your system.

Wait for your last mile to respond. Learn to understand its style of expression.

It’s a feeling…

… of well-being, …

… or something suffocating, nausea-like.

Embrace the former. Dump what’s causing the latter.

It’s as simple as that.

The most meaningful things in life are…

… exactly…

… SIMPLE.

Manipulation / Fraud / Ponzi – I Reject You

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I detest manipulation, and manipulators. 

I like people who are straight-forward, without hidden agendas. Simplicity is gold. Simplicity breeds success. Simplicity gives satisfaction from within. 

All the twisting and turning, wheeling and dealing, wangling and dangling of manipulation makes me want to puke. 

Therefore, manipulators, frauds, Ponzis, I reject you. Manipulation doesn’t make the manipulator happy. Try it and see. I’m 100% sure your story won’t have a happy end.

Rejection is a simple process. When you reject something, you stay away from it. You get out of its way when it is in the vicinity. You head off elsewhere when that something is headed in your direction. Everyone’s probably been rejected sometime or someplace, so everyone probably understands rejection. 

Well, rejection is one thing, but how does one recognise a manipulator, fraud, or Ponzi?

Recognition is key. 

This breed of people talk sweet. They appear harmless. They don’t lose arguments. Quick, witty, sharp. Fast thinkers. They keep you hanging. Give ambiguous answers. Mostly, they like to not answer at all, so as to keep you dancing around them, making you more vulnerable to their schemes or ulterior motives. If you’re interested in their something, they use silence as a weapon. You’re hot, you’re interested, they’re silent, makes you hotter, makes you more interested. The idea is that ultimately, when the manipulator breaks the silence, you lap up whatever you’re getting. Also, they keep you hungry for more. Manipulators are vicious, vile people. 

Where manipulators push you to act, slowly, but steadily, by twisting and turning your world in the manner they consider appropriate (since you’ve given them that power), frauds outright present a reality which sucks you in to sign the dotted line. Frauds sell a dream. It’s a great dream. You want to be a part of it. It overwhelms you. It’s almost too good to be true.

Ponzis are frauds. They sell the dream of unrealistically large returns. They count on greed to cloud your vision. They lure new sets of investors by distributing investorial proceeds from one set of investors as dividends to slightly older investors, and so on and so forth, till the bandwagon is overloaded with thousands of investors paying full-throttle only to see the Ponzi vanish next day, with everything, never to be heard of again. 

When someone doesn’t give you a straight-forward answer, walk the other way. Don’t bother with benefit of doubt, just walk the other way. With very high probability, you’ll have avoided a manipulator. When someone uses silence as a weapon, walk away ten miles. Warn everyone of a mega-manipulator in the neighbourhood. Analyze sweet- and smooth-talk ten times. Is there any truth in what’s being said, or are the words an eye-wash, hiding a fraud behind themselves? If you’re not greedy, you won’t fall for a Ponzi. Don’t be greedy. Period. 

You’ve hit full cycle. 

You’ve understood the existence of the breed we speak about. It has dawned upon you. Let’s call this “internal realization”.

Then comes “external recognition”, of the breed being in your vicinity, and trying to exercise its powers upon you. 

Lastly, comes “complete rejection”. 

Well done. 

You’ve saved yourself from lots of emotional and or monetary trouble. 

Spread the word. 

Not in the Mood?

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Right, good.

You don’t have to be. And good that you’ve recognized it.

Mood sets the tone for success… or failure.

For example, just now, I’m not in the mood to conduct due-diligence. There’s one company which has sparked my interest, a few days ago. Work needs to be done, to decide whether I’m investing or am out. Quality of work needs to be of the highest order. Otherwise I might take a wrong decision, meaning that I might invest in a dud, or might reject a multibagger. And what happens? I’m not in the mood to conduct any kind of due diligence. For whatever reason. What’s to be done?

Nothing.

I just don’t conduct it.

Period.

What if the opportunity goes away?

So be it. Another will come along. When? Whenever. World is full of opportunities.

Why am I so pricy about my behaviour?

Well why not? It’s called being in the sweet spot. You call all the shots. Including working when in the right frame of mind. Such a condition enhances the probability of success.

When will I be conducting the due due-diligence?

When would that be?

Whenever it happens naturally, without artificial pressure.

Am I just born lucky, to be in a position to work when I want?

Well, I’ve definitely had my share of great luck, and continue to have it, by the grace of Nature. On the other hand, and to put things in perspective, I also have, over the last twelve years, worked hard to create a situation for myself where I only invest when I wish to. There’s no pressure on me to invest. My bread and butter isn’t dependent on it. I call it being in the sweet spot.

Work towards your sweet spot.

Now.

You, and Your Purpose

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Who are you?

Yeah, that question again…

Frankly, I’m not too bothered about who you are.

Yeah, I’m too busy trying to fathom who I am.

Guess who needs to be concerned about finding out who you are?

You!

Nobody else.

In addition to “Who are you?”, here’s another one that goes with the flow…

Where do you fit?

Not stopping…

What’s your purpose?

Yeah, why are you here?

What drives you?

Where do you start?

And sure, where do you stop?

What’s the gauge? How do you gauge where you stand with all these questions and their answers.

Luckily for you, Nature hid this gauge inside you.

Connect please.

You’ll feel… comfortable where you fit.

You’ll know where to start. When to stop. From inside. Below all the huff and puff, in the stillness of mind, lie answers. Find them. Talk to yourself. It’s not crazy to talk to yourself. In fact, those who don’t are crazy.

Where you’re happy doing stuff lies your purpose. That which causes maximum happiness and satisfaction, in you and around you – that’s your purpose.

Your behavior in multiple situations tells you who you are.

Align who you are with your purpose.

Once you know who you are, you can go about defining and delineating your risk-profile.

Small Things are Big Things

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You’ve covered lot of ground, and are now cleaning up the field. 

You’re tying up the loose ends. 

Your small acts here count big. 

Please see them through to their logical conclusion. 

Don’t get up without completing full action. 

An act at or towards the end leans on the main piece of action which you’ve already fulfilled. 

It’s loaded on a spring. It’s effectivity is enormous. However, you are tired. You’re looking to close up. Hashtags, man, what are these hashtags!? Why do I have to put them, you’re saying to yourself. What purpose do they serve? Let me just forget about them.

No.

Hashtags are just one thing. A small thing, but then, a big thing. 

Tying your act into your own seamless sphere is another such thing. 

I know, it’s a pain…but seamlessness is a beautiful feeling. 

I like to imagine that seamlessness is the equivalent of free-falling in a mad, mad world. Maybe that’s a nonsensical analogy, but that’s what I like to imagine. Seamlessness gives you a huge advantage in today’s world. Take it. Make the effort to keep yourself seamless. 

Backing up, yeah yeah. Who likes backups? You’ve got to do them, however. No pain, no gain. I’ll talk to you after some data-loss. Only bother hooking up with me if you’re well backed-up. I don’t have the energy to lend a shoulder that withstands your tears in the event you weren’t back-up. 

Where hashtags stop, that’s where your organisational skills should take over. Meaning, that one hashtag-search could give a thousand results. How do you still find what you’re looking for? Logic. You’ve used your logic while organising your work. Logically, your file should be somewhere, and that’s the somewhere you look. 90%+ you’ll find it there. Follow seamless logic. The first logical avenue that comes to mind…take it. Yeah, your seamlessness also stands on your own seamless logic. 

Staying with what counts is a small thing, but again, it’s a big thing. 

On the path, one strays. One is distracted. What do you do?

The mind is like a baby. 

Don’t deny it outright. 

Trick it. 

Let it stray for a bit. 

Then, when its defences are down, bring it back to the main path. 

Keep bringing it back, until it starts getting a rooting righ by returning to home-base every half an hour. That’s the sweet-spot.

Don’t lose yourself into lost causes. 

Achieve. Fine. Set goals. Sure. Get them done. Great. Move on. 

Moving on is one small step. However, it’s a big step. Not many have the strength or the mental capacity to move on. Make sure you do. 

How?

Open your eyes and see the world. 

If you feel that your one achievement is going to make it spin, fine, stay on there, good for you. If not, please move on to your next achievement. Keep doing this till you find that one big, big thing for yourself. By that time, you’ll have many small things going on auto-pilot anyways. 

Get a grip. Nip something small when it’s small. Get to the big. Go for it. 🙂

Who’s the Driver?

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Are you an artist?

If you are, you’ll already perhaps know who the driver is. 

Or, maybe, you’re in the process of finding out. 

Ultimately, whatever you’re doing can become an art. 

What drives you?

Are you understanding what I’m trying to ask?

What pushes you on, with the art? What makes you want to create… more? What makes you want your art to be more… bombastic? Powerful? Impactful? Meaningful? Lucrative perhaps? What?

Is it mere ambition?

Naehhhhh, mere ambition is not enough. 

There has to be some kind of… pain. 

You have to ache somewhere, to let it out elsewhere. 

Pain drives. 

It can drive you beyond… itself. 

That’s the thing with pain. 

Slowly, you get used to pain, quantum by quantum. Your system doesn’t feel that particular quantum anymore. It’s feeling the surplus, though. How’re you bearing the surplus? By hanging on to your art. Your art takes you away from the surplus pain that you would have felt. You channelize the force of surplus pain into your art. Your art shines. On the side, you don’t feel a lot of pain anymore. 

It’s really important to understand where there will be learning, and where there probably won’t be. 

I’m not saying non-learning areas are to be avoided. They’re comfortable areas. Nobody likes to avoid comfortable areas. Sure. Nor do I. I’m just saying that comfy areas won’t really be enhancing your learning process. Let’s just be clear about it. If you have any art to express, any kind of art, full expression probably won’t come through if you entrench yourself in a comfort-zone. 

Know what I mean?

Yeah?

Good. 

You don’t need to ask who the driver is. You’ve worked with the driver. 

Take that –>@&%# Mr. Peer Pressure

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Dear Mr. PP,

I don’t give in to you, never have, never will.

You’re not that important.

I don’t spend my time thinking about you.

I don’t respect any entity without a backbone, and you certainly don’t have one.

I’ve met you many times.

At first, I felt you, and was taken aback. You wanted me to do something I didn’t wish to do. You were strong.

I was stronger.

When you don’t know anything about the reputation of your opponent, frankly, you don’t give a d*m*. You fight. Till you fall or till the other fellow backs down.

I won my first head to head with you. Thank my stars.

After that I found out who you were. Yeah, who was it exactly that I didn’t succumb to?

After I’d grown up and all, and fully realized your devastation potential, I always leaned back on my first head to head. I mean, you were beatable. Period.

Yeah, I was lucky to have beaten you first up. It’s been a huge psychological advantage.

I’ve carried over this advantage into my market life.

Take a hike, Mr. PP.

[As far as market related activities go, I follow and advocate an unbiased, singular and customized path which doesn’t follow any crowd or any myths as such.

This path certainly does not let me invest under any kind of pressure.

Where there’s pressure, there are vested interests.

Please beware of investments which don’t suit your risk profile and are touted to quench vested interests].

I Don’t Want the Cancer

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Are you hurt?

A.

Do you want the cancer?

B.

I do get hurt. Yeah, things hurt me. I’m an emotionally penetrable human being.

Fine. That’s me.

What I definitely don’t want is option B.

Who wants option B?

Can’t think of anyone.

Who gets option B?

Many.

But who?

Those who can’t forget the hurt. Yeah, people who’re unable to move on.

To forget the hurt and move on, simultaneously saving ourselves from the cancer, we need to forgive.

Someone’s misbehaved. Hurt you. Are you going to ruin your future days? No.

Forgive. Forget. Move on.

Just remove the mould in which cancer can potentially set in.

What makes you think it’s different in the markets?

A loss is a hurt.

Need I say more?

You can do the math.

Dealing with “Situation Change”

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When does a situation change?

For example, one could move on to a new field in finance.

Or, a particular goal could have been achieved. Now, one’s approach is supposed to incorporate predefined changes for financial strategy post goal-accomplishment.

Family dynamics could be responsible for situation changes too.

Sure, health. Never underestimate the power of health. It can make you, and it can break you.

Emotion. Fell in love? Going crazy? Outbursts? Hot flashes? Preggers?

Logistics? Moving? New girl-friend in New York?

Night duty?

Looking after your parents in their old age?

Wife wants to party all the time? Lack of sleep?

Promotion? Demotion? Fired? Jobless? Suddenly self-employed?

Gone single? Date-circuit? Got married? Had a kid?

Situation changes come to all. Not once, but many times in life.

Why are we talking about them?

They have an effect on our financial strategy. That’s suffices.

I’ll tell you how I deal with situation change. You can then BODMAS your way to your own approach, using my approach as a broad outline.

My first approach is to put on auto-pilot as many of my financial activity as possible. Going paper-less helps. Trusted auto-bill-pay channels are assets. Fixed-income generators with auto annual-alerts give financial security with zero involvement. SIPs and dividend pay-ins are further examples of having gone auto.

Then I look at what is left. What has not yet gone on auto-pilot? Can it? Ever? If there’s a chance, I go for it. For example, I’m currently developing a software robot to automate my forex trading.

Lastly, I size up what is not pushable into auto-mode. Do I want to keep it? Can I do without it? Weigh, weigh, weigh, scrap A, scrap B, C is something I just have to do, manually, period, so keep C. Eventually, C, G, P, X and Z are five manual financial activities I keep, having scrapped the others (that refused to go on auto) out of my life, since I didn’t consider them burningly essential. C, G, P, X and Z are the ones that’ll weigh me down when my situation changes. I’ve kept them on doable levels. Some are on semi-auto but do require manual intervention. The others are fully manual.

My situation changes.

My auto-pilot activities continue their smooth run. They are my assets, my stars.

P, X and Z are on semi-auto. I barely gather the energy to look into their manual aspects, just about managing to keep them going with reasonable results.

C and G are bogging me down. Can’t keep up. No energy. No motivation. Situation change has drained me. Relentlessly, I try. C has turned a loser. Beginning to feel sick. I shut down C. Losses.

G is sucking me out. Emotionally. It’s a winner, though. Can’t keep up. Can I turn it into semi-auto? It required constant monitoring till it started winning big. I’ll still need to feed in my stop daily. That’s the manual part. I stop looking at G. Problem with equity orders is that your stop has little technical value overnight. A new day requires renewed stop-considerations. Ok, five minutes daily for G. Open terminal, set trigger-stop 9.99% below opening price, close terminal, don’t look left or right, done.

Phew.

Save health. Don’t fall sick.

If sick, rest.

Recuperate.

Regain health.

Get used to new situation.

Normalize.

Gear up for next situation change, whatever it is, whenever it comes.

Gear up now.

And…How Much Connection Time Exactly?

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Well, somebody’s got to ask these questions…

Don’t see very many around me doing so, so I just thought what the heck, let it be me…

This one’s not for all you test-tube jocks in the lab, you know…

Answer’s not about the math really; it’s more about feeling, again…

Nevertheless, this is a very important question.

Answer it wrongly for yourself, and market-play will wreck your life – all avenues of your life, that is. 

And, answer it correctly for yourself – lo and behold, you’ll actually start enjoying your market activity.

The human being ultimately excels in anything he or she enjoys doing. 

This means that if you answer this question correctly, your market activity will yield you profits. 

Told you. This question is important. Answer it.

Let me tell you how I’ve answered it for myself. 

Before that, please understand, that my answer doesn’t have to apply to you.

However, for those who don’t know where to begin while trying to answer the question, it’s a start.

I detest giving Mrs. Market too much power. This was my clue initially, and I built up on this fact. 

Initially, Mrs. M used to take over my life. She used to govern my emotions. It started to rub off on my family. I knew I had to draw a line. 

I started to trade lightly – amounts which my mind could ignore. Then, I did one more thing. 

I started to connect minimally. The was the key step, and it swung the emotional tussle in my favour. Mrs. M’s days of emotional control were over. 

What does minimal connection mean?

You only connect when you have to. Period. 

When you don’t have to connect, you just don’t.

I’ll tell you when all I connect to Mrs. M.

Order-feed – 0 to once a day. Very rarely twice for this in one day. 

Connection for me is having my trading terminal on, and seeing live price-feeds face to face. 

My market research is all offline, so that’s not a connection for me. 

Squaring-off a position – again 0 to once a day. Very rarely twice a day.

Watching the live price-feed – 0 to once a day, and only if if I’m unclear about the buying-pressure versus selling pressure ratio.

That’s it. 

When I don’t identify a potential trade in my offline research, I don’t connect at all. 

When do I connect next?

Whenever I’ve identified the next trade, or a squaring-off situation, all offline. 

There can be two or even three day stretches when I just don’t connect. 

I use options, because they allow me this kind of play for Indian equities. 

Why am I stressing upon the value of minimal connection? 

Connection means exposure to the “Line”. You’ve met the Line before. If not, look up the link on the left (“The Line”). 

Connection to the Line taxes your system, because market forces interfere with your bio-chem. 

Keeping the connection minimal keeps you healthy, and you can go out and do other stuff in life, which rounds you off and refreshes you for your next market-play. 

Keeping the connection minimal detaches you from Mrs. M. You are able to detach at will. This lets you focus on your family when your family members require your attention. 

Keeping the connection minimal makes the task of swallowing your small losses smoother. 

Lastly, keeping the connection minimal helps you let your profits run. 

So, how does one define minimal?

Do the math, and come out with rules for your minimal connectivity, like the ones I’ve come out with above, for myself. 

After that, while sticking to your rules for minimal connectivity, only connect to Mrs. M when you feel the burning desire to do so, like for example upon the identification of a sizzling hot trade, or for the order-feed of a trigger exit after a profit-run or something like that. 

Yeah, you minimise even after your rules.

That’s your minimal connection.  

So…What Does Trade Selection Hang Upon?

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Feeling.

Feeling first, feeling last. 

Math in the middle. 

That’s my recipe for trade selection. 

For me, trading is an art. 

I rely a lot on gut. 

Many people tell me that’s wrong. 

Everyone’s got a right to their opinion. 

What works for Jill might not work for Jack.

People tell me to get emotion out of the way.

Emotion can be an ally too. 

Just try and get the hang of your gut feel. 

Let the trade speak out to you. 

You’re looking at a chart, and the chart should shout out to you – “Trade me!!”

That’s what I call “Feeling First”.

There’s something about first impressions. 

I mean, whoever made that proverb about first impressions sure knew what he or she was talking about. 

So, after your first impression tells you that a chart is tradeable, you then need to see some kind of a mathematical fit going for you. 

You plan your trade.

You try and fit some mathematical model into the underlying’s previous behaviour, and plan the trade into the near future based upon the future-play which your model spits out. 

You calculate a stop according to your money-management rules. Just more math. 

Now comes “Feeling Last”. You look at your chart, which contains the entire map of your trade.

At this stage, your gut must speak to you. 

Yes or no. 

Nothing else. 

Are you pulling the trigger or are you not pulling the trigger.

If not, then no whys. It’s a no. Learn to take a no. Look for another trade setup, elsewhere. 

If yes, then again – no more whys. It’s a go-ahead. Have the guts to follow through. 

Keep it simple. 

The best ideas in the world are – simple.