Tag Archives: #time

Cluster of Blessings

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Hey.

We realized…

…that what we’re doing…

…is anti-fragile in nature.

How, you ask.

Since what we’re doing is in stocks. Equity. Robust at best. Not anti-fragile.

?

Well, take a definition, and expand it a bit, and the definition starts to make broader sense. One draws on the definition, and creates a utility for that definition in one’s own line of work. That’s what we’ve done. Creator of the term anti-fragile, Mr. Taleb, could turn around and say, hey, you’ve just taken my thing and used it in your thing. Of course we’ve done that. We stand on the shoulders of giants, giants like Mr. Taleb. And now we’ve got his thing, projecting onto our thing, making something new out of our thing. Bottomline, we have a thing that is anti-fragile, and Taleb gets credit for his thing starting to develop universality, at least across another asset class.

So how are we doing stocks in an anti-fragile manner?

We benefit from chaos, volatility, uncertainty, fear and the like.

How?

Before these conditions cause mayhem in stocks, we have gravitated, in a growth market, over the years, to exhibit meaningful holding power. Both mentally, and financially. So, what do we possess before topsy turvy conditions, like now? Holding power.

What else are we armed with?

Liquidity.

Liquidity is a state of mind. Our state of mind causes us to be liquid at the right time.

Next.

We have…

…high conviction. In a basket of market players. Our due diligence regimen, over decades, has allowed us the means to recognize such stocks. In these, we have developed what?

High conviction.

We are itching to buy these underlyings, at huge…

…margins of safety.

Cut to current conditions. Chaos, volatility, uncertainty, fear, war, maniac, missiles, nuclear threat and what have you.

The margin of safety that we look for starts to abound. We accumulate high conviction underlyings, over multiple buys, ending up with low buying averages.

As conditions amplify, buying averages get lower. We are benefiting from chaotic conditions in that our buying averages are getting lower and lower.

Perceptions change for the better. They always do. Gone is 1929, where it took the better part of two decades for circumstances to change. Till 2019, one used to talk about max 15 to 18 months being the length of a bear market. Information flows very fast. When efficient, whenever that is, markets are then super-efficient. Factoring in is taking days, perhaps only a day. A change in perception is incorporating very, very fast. Frankly, we’re talking months, not even years. And, we’re mentally and financially prepared, with our holding power, for a time-frame measured in years.

Comes the turnaround. Sooner than later, such are the times.

Our low buying averages multiply fast. In fact, very fast. The lower they are, in our high conviction holdings, the faster they multiply. We start to hold many 2-baggers in 3 to 6 months, for example.

Now we call the shots. In fact, our very low buying averages do.

We can choose to pull our principal out, full 100%, at 2x, 3x, 4x, 5x or what have you, depending on our muse.

The moment we go cost-free, we have moved into 100% margin of safety. Nothing can break our cost-free-ness (except ourselves). We can choose to leave our cost-free-ness to our children, by which time it will have majorly compounded. Since we have no principal invested in our cost-free-ness, we won’t be in a hurry to liquidate it. In fact, we won’t even be looking at it.

We’re calling our low buying averages anti-fragile. The lower they get, the more anti-fragile they behave in the aftermath of chaos. We’re adding an allowance towards fast incorporation of change in perception to the definition of anti-fragile, because of which our inherently anti-fragile low buying averages get to benefit from their anti-fragile nature (thanks again to Nassim Nicholas Taleb for giving us the framework of anti-fragility).

And what are we calling our cost-free-ness? I mean, it is seeming to be beyond fragility. It is giving benefit beyond any scale. Generational benefit. I don’t have a name for this effect, yet.

Our cost-free-ness has generated generational well-being. It has allowed us to not liquidate it, by the state of mind it has caused in us. It has allowed itself to be passed on.

Hmmm. Taking a phrase from Nichiren Buddhism, it is our…

…cluster of blessings…

…that we pass on…

…to the next generation.

Constants

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Hey.

We play the game…

…with numbers.

Numbers are…

…our thing.

The thing with numbers is…

…that once we create a constant for ourselves…

…a pivot…

…something like a compass…

…AI doesn’t have access to it.

It’s our number.

It’s in our mind.

By the time AI gains direct access to our mind, we’ll be gone.

For example, we establish a low buying average, over many buys, in something we consider to hold value.

Each individual establishes their own, meaning…

…it’s each person’s own low buying average.

It decides the multiple.

It’s the centre-half. The libero. It creates the play. It’s unique to a person. No AI access. The whole game has been taken away from AI. It remains a human game. It’s not what the masses are doing. It’s contrarian. It’s going to make money.

Volatility is a constant.

Disruption is a constant.

Fear is a constant.

Greed is a constant.

Mass-behaviour is a constant.

Pigs getting slaughtered is a constant.

We play it by constants.

We’ve even started using unique mass-logic defying indicators, that only we have defined, that no one else knows about or can dream of, and we’re using them successfully, with no access to AI.

We’re functioning from within a matrix where we control the game, AI doesn’t.

Beauty is, outside of our protective matrix, we have access to all of AI’s capabilities, should we choose to use them.

Not yet though. Specifically after the 160+ girls murder rumoured to be caused by intel provided by AI, correct me if I’m wrong. AI as it currently is doesn’t seem ready for seamless implementation. All those foolishly believing so at this moment are the pigs referred to above. Pigs get what? Slaughtered. I didn’t say this first. It’s a common market saying. Markets are a – constant. We trust constants.

There will be many more blow-ups before seamlessness is achieved.

Think of banking systems causing and compounding massive errors because of blind reliability on AI.

This of AI suggested war strategy backfiring because of lack of understanding of human psyche.

Think of investment strategy imploding, left with eyes wide shut to AI, owing to lack of proper understating of human behaviour and its unpredictability. Anyways, on the plus side…

…think of any level of positive upheaval that AI will cause.

Think maximum.

Thought?

Since we play it by constants, we’ll continue to thrive, maximum disruption and beyond.

Such is the power of constants, that we successfully harness.

Matrix Diaries

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Hey.

I think…

…you’ve pretty much understood…

…that we’re buyers in this whole mess.

I’d like you to add one more word to your understanding.

We’re…

…fearless…

…buyers.

We were not always fearless.

The human being is born with fear built in as a protective emotion.

During the process of rewiring, we wired this emotion out.

How does one do that?

Before I delve into it, wish to reiterate the we.

Who’s the we here?

Everyone who gets taught forward in this space and from this space, and then goes on to implement successfully, that’s the we. Why do such a thing? Gives me a kick. What’s a good life? A collection of meaningful things that give one a kick, implemented repeatedly.

Now imagine a matrix.

We are in the matrix.

Outside the matrix are all things that cause us fear.

Inside the matrix we implement our strategy without fear.

We have built systems that have automatically thrown out of the matrix all things that cause us fear against acting in the markets.

First we created a safety net. An emergency fund. Perhaps two. Out went fear of existence.

Starting with a small networth, we plunged into the markets. Luckily, we tasted failure fast, and lost it all, broken down, emergency fund to fall back on, young, enough energy and will power to bounce back. Now we had a model of how not to do it. We knew where we didn’t want to land up, and understood somewhat how not to do it. The experience of a blow-up and the knowledge of how not to do it made more fear exit the matrix, as we itched to get back into the game.

Slowly we built a system. Incorporated models. Saw what worked. What didn’t work for us exited. Model developed a slight edge. Tasted some wins. Confidence started to grow. As it grew, more and more fear exited.

Then came replication. Would the model work again? It did. Would it work bigger? Scaled up a bit. Working. Till not working. Fine-tuned. Working again. Knew we had something now. Came a black swan and its aftermath. Model excelled. Realized we were anti-fragile. Whatever was left of fear was now outside the matrix. We were tready for all out implementation.

And that’s where we are functioning from in this crisis.

If you say might last a year, no fear, we silently implement. We’re liquid because the model creates liquidity in good times. Two years? Still no fear. Liquidity might run out after 18 to 20 months, probably, but that’s the whole goal, to be fully invested, as per a model in which one has high conviction. Three years you say? We say still no fear.

The biggest money is made by…

…sitting…

…and we didn’t say this first. Someone you look up to did.

We’ve learn’t how to sit. Sitting is an integral part of the model.

While we sit, we do many constructive things. Since we’re investors, while we sit, we invest heavily…

…in OURSELVES.

Do the math.

Fool?

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I don’t mind.

What?

Being called that.

Why?

For me, it’s an indicator.

How?

When someone in my environment expresses that he / she considers me foolish, this acts for me like a guage.

Where?

In order formulation.

Which?

Good till traded orders.

Explain.

Ok. Let’s say someone considered my 787 GTT HDFC Bank entry foolish. With price having fallen to 745, and still not showing signs of stability, someone might consider me foolish for having entered ‘early’ at 787. I want this to happen. I want to sense this attitude in another person’s behaviour.

Then?

Simple. Formulate and enter next GTT for HDFC Bank at 690.

What’s the logic?

That’s just the way I use this indicator.

Position-sized small quantum?

Absolutely.

Considered bulk-entry at bottom?

What’s the bottom? Who claims to know the bottom?

499?

No idea. How do you know you’ll catch the bottom? What if you miss entry altogether?

What if I get full entry in lumpsum, at 499?

What if price stays below 400 for a month after that? Your lumpsum entry will hardwire you to your terminal, and it’s one month of sleepless nights, I can promise you that. Neurosis. Psychosis. Freeze. God knows how long it will be before you can take another rational decision.

And your staggered full entry with a higher buying average will not cause all these things?

That’s the whole point. It will not.

It will not? How?

Market psychology is counter-intuitive. When are you going to understand this one basic point? Going in, let’s say ten times, between 800 and 499, over three months, at every new entry, the nervous system forgets older price. It focuses on newer price, not even on buying average. It actively registers one small quantum entry at 499 as per this strategy, and forgets other entries above, at least forgets them well enough to suit the purpose. Bottomline – such a nervous system is poised to avoid neurosis, psychosis and the like.

You’re just making this up.

Try it out. This is what works for me towards full strategy implementation. I am able to successfully fool my nervous system into buying maximum units without setting it up to hurt itself, should the market fall more, and stay lower for longish periods. This is my win, and a cornerstone of my lowering the buying average strategy in high conviction stocks during crises. Tested successfully during CoViD. No more testing. Current crisis is about full implementation. Will keep this buying strategy on through the entire crisis, or till fully invested, whatever comes first.

Why put in everything?

This is money sidelined to go in. It’s not daily resources money, or college fund money, or family expenses money. It is investing money. It’s supposed to go in. What’s better for it than to go in low?

Where is the courage coming from?

High conviction is a state of mind. It’s a reflex. Over time and over many, many studies, observations, behaviour analyses etc., you develop it for a stock. Once you have high conviction in a stock, nothing should come in between you and full entry, if price allows.

Am still trying to decided whether you look foolish or intelligent?

Though I don’t care for your opinion, I don’t mind it either if you give it to me, for I will use the encounter as an indicator.

Is that what you’ve gravitated down to, using ridiculous and self-concocted indicators to navigate the markets?

Doing things which no one else has before sets me up for vindication no one else has gotten before. No more questions, do the math.

Miners

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Hey.

We’re miners.

We mine for…

…margin of safety.

Surprised?

As in, can one mine for…

…something abstract?

Sure, no biggie.

Ok, bear with me on this.

Entry quantum = shovel.

Wedge it in deep enough = Good Till Traded (GTT) Order = Poise.

Emotional sell most likely on open or on close = mined material falling into basket.

GTT executed = margin of safety mined successfully.

All the time?

No. In times like this, specifically, when there’s blood on the streets.

Isn’t margin of safety already available in times like this?

Yes it is. However, we want to mine for extra on top of what is available.

Like your yesterday’s experience with the HDFC Bank GTT hit well below trigger, a couple of seconds after open?

Exactly like that. Oh, there’s another add on.

Tell me.

We buy with a lag.

Meaning?

Let’s say something’s fallen big, and has come on our radar owing to levels broken.

With you. Then?

We let it fall for the whole session, setting up GTT only after the session, and placing GTT around 4 to 5% below close. Time and price lag.

Isn’t that way below?

That’s the whole point. An emotional sell will hit, and then price will stabilize.

What if no hit?

Possible. Good with that. What’s also possible is, there could be no hit for two or three sessions, and then there might result a soft execution. We’ve still mined the extra margin of safety, even though it’s taken us a few more sessions.

What was your experience with the recent HDFC bank buy?

GTT was set up on 2nd March, for 809, when price was at 887.

Just fishing in the air or what?

Didn’t want it at 887. Wanted it at 809. That’s all there is to it.

So, 78 points were mined, that’s almost 8.8%, wow!

Hold on. There was so much emotion in play, that scrip opened at 770, a massive 72 points below previous close, order triggered at 773 a second or two later, and was executed at 778 after some more seconds. So that’s about 12.3% mined. It took 17 days and 13 trading sessions. By the way, the extra 12.3% mined goes a very long way.

Explain.

In 25 years, at 15% per annum compounded, it compounds to 4 times plus the entire sum that’s gone in just now.

Tremendous!

Welcome to the world of compounding, and that of…

… mining.

Specialization

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Hey.

Calls have started coming in.

Am I doing ok?

Is the panic getting to me?

Am I going under?

I was waiting for this.

Calls of this nature, coming in, are a fantastic guage for the onset of panic.

You see…

…I specialize in guaging panic. You could call me a fall-specialist. A crash is my field of action.

During the crash in CoViD wave 1, I categorized two levels of panic.

Level I was classified as middling panic and identified at the point when calls were coming in asking if people should cancel their systematic investment plans. Aversion to invest with blood beginning to flow on the streets. Noted.

Level II was classified as grave panic, and identified at the point when calls were coming in of the nature, that now that all companies would be bankrupt, why was I still putting in money, into the markets? Questioning the whole financial system. Noted too.

In current scenario, questions about my health followed by queries about which stocks to invest into, after I had answered with a ‘never been better’ reply, for me, corresponds to level I of panic, identified.

Am still waiting for those other calls, asking why I’m putting in money when everything was going bankrupt anyway. Probably coming soon.

So, what’s the course of action, now that level I prevails.

We take it up a notch.

Meaning?

Look harder for entries.

Weren’t you already entering?

Yes, but wasn’t trying very much. Was letting the market punch me hard into an entry.

Meaning?

I’ll give you an example to drive this point home.

Ok.

HDFC Bank, right?

Right.

I had a GTT on for the last many sessions for entry at 809. Wasn’t coming. GTT remained. Either the market socked me into this position, or I wasn’t entering. Happened this morning. Triggered during open, at 773, executed at 778. Market pushed me into the position with force. I let it.

And now?

Will leave myself open to a lesser force push. Will put nearer GTTs, let’s say ~3% away.

If such prices don’t come?

Then not interested in entries.

What happens at level II of panic?

Even lesser force required to enter. Only GTTs lesser than 1 to 2% away perhaps. Many entries.

How come you are so liquid?

This approach creates liquidity during good times. Entering with small quanta now, as compared to networth. Can go on buying for more than one year from this point, if required. Such is the strategy.

Good to know, thanks for sharing.

Mind you, buying during panic does take a toll on one’s psyche. One needs to recuperate and regenerate. It’s not as easy as it sounds. I try very hard though, to recover mentally before the next session. Wish to last very long in the markets, …

…successfully.

Beyond

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There’s a…

…rulebook…

…and then there’s beyond.

The world beyond…

…abounds with freedom.

The freedom to think…

…like no one’s thought before.

To make seemingly absurd connections leading to clarity.

To crunch numbers and patterns without crutches.

To see with multi-dimensional vision using the eye of the mind.

To function beyond, one first needs to learn the rules of the normal, worldly game, by the book.

Followed by repeat implementation.

There comes a time, when a rule is implemented subconsciously, without having to look.

Extrapolate to entire game, whole rulebook, implemented as if on auto, through one’s reflexes.

Get ready for beyond.

One goes…

…beyond…

…without warning…

…when one is ready as outlined above.

Goes, comes back, goes, comes back, it’s quite random.

Bottomline is, how conscious is one while one is beyond?

Journey can last for just a few seconds, or even a second. Example – one has a flash.

Level of consciousness while beyond allows one to address solutions for complex issues.

What’s the bottom for this market?

Ground-reality of war?

How do I solve my home-situation?

What overall pattern is this market gravitating towards?

Ulterior motives.

Etc.

How much of such knowledge can be incorporated?

Can it even be true?

Is it making common sense?

Does one have the confidence to act upon it?

Well, it’s not all going to add up immediately. However…

…repeated performance over many years allow one to make systems.

To gauge reactions.

To develop counter-reactions.

To write a rule-book…

…for implementation of beyond-insights in actual life.

Implemented together with the entire gamut of logical, human rules of the world, an intuitive, self-written rule book to go in tandem is…

… invaluable.

Constants

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Waldermort…

…overplayed his hand.

Thought he had the nuts…

…and bet the farm.

Turns out…

…that the adversary’s hole cards…

…plus the flop, turn and river…

…are leading to a full house.

As opposed to Waldy’s…

…ordinary nut flush.

Waldy is oversmart and a half.

Backfires at times.

This one has backfired at the worst possible time.

Only one result.

Waldy loses…

…everything.

Reserve status.

Serious player status.

Reputation, if there was any.

Loyalty, which was abundant from former allies, but is now…

…not even zero, but minus.

What more can one lose?

Whatever one can. It’s lost.

When this is over, a new methodology of doing everything business and financial will have emerged.

Meanwhile, a few constants remain.

There are areas in the world, where there is growth.

And will be, for the next 25 years.

Like India.

Semblance of stability?

Yes.

Integrity?

Yes.

Win-win attitude?

Yes.

Loyalty?

Yes.

Balance?

Yes.

Clout?

Yes.

Consumption.

Yes.

Period.

Buy India during this fall.

As long as the fall lasts. One year. Two years. Three years. No one knows.

What one also doesn’t know is whether India will give this buying opportunity again.

So, buy India.

Even if it means that you get fully invested during current fall.

That’ll be just great.

Making Equity Antifragile

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Yeps, Taleb’s the famous one. 

Moi, je ne suis pas célèbre.

Néanmoins, j’aime le terme “antifragile” de Taleb.

Also, Taleb has termed equity as robust.

I do equity. 

I’d like my interaction and future with equity to be antifragile.

Let’s first look at Taleb’s definition for antifragile.

He says that anything that has more upside than downside from random events (or certain shocks), is antifragile; the reverse is fragile.

Robust equity will eventually crack when subjected to shock.

We are aware of that.

What do we do now?

Firstly, we take time, and put it in infinity mode. Meaning, that we stay invested, for a long, long, long time. 

We’re now allowing equity amply sufficient time to recover from not one shock, but many shocks.

Also, each time there is a shock, and equity tanks, we go in and buy some more.

How can we do this?

We are sufficiently liquid, all the time. 

Our small entry quantum approach is ensuring that. 

Also, we’ve chosen such equity first-up that is minimally susceptible to cracking. That’s the best we can do. 

We have either avoided debt altogether or chosen debt-levels that are adding value to the stock and can be easily taken care of in the short-term. 

We have chosen equity with decent quick and current ratios. 

We have chosen adaptable managements that function as optimal human capital, fighting inflation, showering shareholder-friendliness and adding value at all times. 

However, crack they do, eventually, and we keep picking up more. 

Since we’ve kept ourselves “infinitely” liquid as per our small entry quantum approach, we are then also “infinitely”poised to benefit from the cracks. 

As we keep getting more and more opportunities to buy with meaningful margins of safety, markets show us more upside than downside. 

Thus, antifragility comes to us as a function of falling price, given that the underlying has sound fundamentals, low to nil debt and benevolent, versatile and diligent management. 

Now, let the shocks come. 

In fact, let 20 shocks come. 

We want shocks to come…

…so that we can continue to buy at rock-bottom prices, which work in an antifragile manner for us, because of the characteristics of the equity and management we have chosen. 

Profiting from shocks?

More upside than downside? Owing to the effects of a shock?

What kind of behaviour is that?

That’s antifragile behaviour.

Time your Friend or Time your Enemy?

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This one depends…

…on you.

How is time treated in your curriculum with regard to the markets?

Are you in a hurry…

…or is your motto “hurry spoils the curry”?

One can make any market action an extremely difficult one if one squeezes time. 

On the other hand, the same market action yields great results when time is stretched to infinity. 

One can understand this in the predicament of the trader.

Expiry is due. 

Trades are in loss. 

It seems that trades are not going to make it to break-even by expiry.

They would probably be showing a profit after expiry. 

However, time-span for validity of the trades has been squeezed to expiry. 

Hence, the trader faces loss. 

The investor, on the other hand, is invested in the stock of the same underlying, and doesn’t dabble in the derivative. 

For the investor, time has been expanded to infinity. 

The investor doesn’t feel pain from a time-window that’s about to close.

Now, let’s look at the cons for the investor, and the pros for the trader. 

The price for making time one’s friend is the principal being locked-in for that much time. 

The investor is comfortable with that. 

If not, the investor feels pain from the lock-in, and may make a detrimental move that works against long-term investing philosophy, as in cutting a sound investment at its bottom-most point during a long drawn-out correction. 

Investors need to fulfil the comfort condition before committing to infinity. 

After a small loss, the trader moves on with the bulk of his or her funds. 

Traders needs to take a loss in stride. 

If not, future trades get affected. 

The advantage of committing funds for short periods, in trades, is that one can utilize the same funds many times over. 

The price for using short periods of time to one’s advantage, however, is tension. 

One is glued to the market, and is not really able to use the same time productively, elsewhere. 

Friendship with one aspect of time works adversely with regard to another aspect of time. 

The investor is not glued to market movements. He or she can utilize his or time for multiple purposes while being invested simultaneously and then forgetting temporarily about the long-term investment. 

It is easier to forget temporarily about an investment than it is to forget about a trade. 

Over the years, I have found it difficult to combine trading and long-term investing, specifically in the same market.

However, I do take occasional trades, apart from being invested for the long term. 

This works for me when the markets in question are different, as in Forex and Equity. 

Bifurcation Ability – Do you have it?

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No?

Develop it asap, please.

Otherwise, don’t be in more than one market. 

However, who is satisfied with just one market?

That would leave one with a lot of time on one’s hands, wouldn’t it?

Time on hands means looking for another market, and another, and another, till one’s time is fully occupied, and one’s thirst for market activity quenched. 

With multiple markets on one’s radar, one needs to bifurcate. 

As in time and mind compartmentalisation…

…which basically translates as…

…that when you’re working on the one market, you’re not letting any overhang from another market bother you. 

If an overhang is bothering you, take two, or take ten, or take however long it takes to kill the overhang. 

Loss, depression, profit, jubilation, exuberation, whatever cause or emotion is prevailing, let its effect come and let it go. Wait for it to go. Then open the next market. The last thing you want is for the other market to be observed and analysed while there’s emotional bias from a former market. 

Therefore…market done…market closed…next market. There’s no other formula here. 

Most market people are both traders and investors. 

This is the area where they really, really need to bifurcate and compartmentalise. 

Why?

Trading and investing involve diametrically opposite implementation strategies, that is why. 

If you’re making changes within your investment portfolio, but are still in the trading mindset, you are going to make major mistakes, which will most definitely disturb whatever balance you have managed to instill within your investment portfolio. 

Similarly, if you’re looking to open a trade and are still in the investing frame of mind, you are optimally poised to botch up your trade big time. 

This is how I approach the matter. 

I do a first half – second half thing. 

The first half during which the markets are open are for investment decisions. 

Then there’s lunch.

By lunch, I forget how the first half of the day has been spent. At least, I try and forget. 

I let the scrumptious lunch help me drown my memory. 

After lunch, the second half starts, which is dedicated to trading decisions.

Strategies used after lunch are diametrically opposite to the ones used before lunch. 

This works for me. 

There comes a time when there are no more investment decisions to be taken, at least for a while. Markets become expensive, and margin of safety vanishes. One is not thinking of entries. Exits are far, far away, as this is long-term investing. Here is when one can dedicate oneself to one’s trading. One’s got the whole day for it. It’s a great situation, because the need for bifurcation between trading and investing is gone. 

Then there comes a time where no trades are developing. Lovely.

Right, pack up, take a break, let’s go for a short and sweet holiday!

From Park Mode to Flow

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Funds find their way …

… to where they want to be.

Thus, if you’re sitting on some surplus, let it sit.

Pressure will be there, to do something about the funds.

Park.

There’s a German saying.

Aus den Augen, aus dem Sinn.

Meaning, that what’s away from one’s eyes is also away from one’s mind, literally translated. However, you do get the drift.

Park your funds in such a manner, that you can’t immediately see them.

It can be something as simple as a savings account linked fixed deposit.

I prefer liquid funds, with my broker in between.

To call in the funds, I need to dial my broker. Then, a full working day needs to elapse before I have access to the funds in my savings account. I find this activation barrier slightly higher than logging in to net banking and nullifying a fixed deposit. That would give access in just two minutes. Too soon for me. I use my off-set day as a buffer, to perhaps contemplate about really going ahead with fund deployment or not. Access in two minutes would mean firing the gun without proper contemplation.

Yes, put an activation barrier between you and your funds. On purpose. Then they are truly parked. What do you do when you park your car? Handbrake on? Of course. So it is with parking of funds too. You put the handbrake on. Your activation barrier is the handbrake.

Now?

Now nothing.

Sit.

Do other stuff.

Lead a full life. Enjoy your life.

Time will pass.

Opportunities will come …

… and go.

Are they making you jump out of your seat?

No?

Right.

Keep park mode on.

Eventually, something will come along that will make you jump.

Homework gives a green signal.

You will want to be in. Every cell in your body will say so.

Kill park modus.

Let the funds flow to where they want to flow, into this opportunity that is making you jump.

Let it be has now turned into let it flow.

From Target to Target

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What’s your target?

Big one?

Fine. Good for you. Nothing wrong with having a big target. Go for it.

Big targets appear far.

That will need to be tackled.

Why so?

Because big targets are big, they take … you guessed it … time.

Getting to the big target requires handling time.

Yeah, that’s the killer.

Barely anyone around claims to manage time successfully.

Managing time can also mean inaction.

Barely anyone acknowledges that.

Time does us in.

We lose sight of the big target.

Game over?

Or is it?

No, not game over.

Nobody’s telling anyone to not have a big target.

Have it. Fine.

However, have many small ones.

Yeah. Many small targets.

Move from small target to small target.

That’s how you bridge your month, week, or even your day.

Oh, one other thing.

As far as the big target is concerned, forget about time.

Then, as you move from small target to small target, and you’ve forgotten about time, well, voilà, guess what just arrived…?

Yeah, your big target.

Cheers!

Finding your Groove

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Form matters.

Form as in – shape.

What’s the implementable shape of your strategy?

You might have identified your market strategy after a lot of effort.

However, you are still not succeeding with it.

You know it’s the right strategy for you.

What’s off?

Why is your strategy not making you money?

It’s probably not being implemeted in sync with your character-, time- and risk-profile(s).

Your strategy is not in sync with YOU.

Bring it in sync, and then implement it.

You will see the difference.

Tone it down. Tone it up. You know yourself. By now, you’ve also recognized your risk-profile. Play with time. Which time-frame are you most comfortable with?

Make your strategy an extension of yourself.

Sleepless nights means you are doing it wrong.

Keep fitting-fitting-fitting till there’s total synchronization.

If you are not able to totally fit the strategy even after solid tweaking, look for a new strategy.

When a strategy has an edge, and is successfully fitted to oneself, it can be implemented with success.

Find your groove.

What does that mean?

It means the creation of circumstances for yourself where you are able to implement the succesful strategy again and again and again.

The strategy should make you feel like going for it repeatedly.

Nothing in your environment should distract you enough to make you fail to implement the successful strategy. Try and bring it on auto-pilot as much as you can. If something manual remains, try and create a life for yourself where that manual step can be repeated with ease.

There will be many disturbances.

You’ll need to attenuate these enough to put the manual steps in motion.

That is the toughest part.

Constraints keep cropping up, and we are not able to implement because of them.

Yes, the most difficult part is for your groove to keep churning despite constraints.

Finding your groove is the precursor to maintaining your groove.

Stocks and the Art of Sitting

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When can you sit?

When you’re comfortable.

It’s as simple as that.

When can you remain comfortable over very long periods of time?

When you’ve bought with appropriate margin of safety. That’s when.

Not enough margin of safety at time of purchase means jumping around and tension everytime the market rumbles.

Do you want that?

Are you investing to be on the roller-coaster day in and day out?

If yes, why are you investing in the first place?

Why don’t you just trade?

Be on your roller-coaster and recognize what you are doing.

There’s nothing wrong with being on the roller-coaster.

However, there’s something hugely wrong with being on it and not know that you are on it.

Instead, you have told yourself that you’ve pickled away your doubloons safely for a lifetime.

With inadequate margin of safety at the time of purchase, nothing could be further from the truth.

Why?

Biochemistry.

It changes when there’s tension.

Due to a changed biochemistry, we make mistakes.

We sell at a bottom, or we double-up thinking it’s the bottom, only to sink further, and then we actually go and sell at the bottom.

Bottomline is, we are likely to make vital mistakes if there’s something disturbing us.

Let’s remove the cause of the disturbance, so that we can go on to discover the art of sitting.

While investing, let’s buy with adequate margin of safety.

What are your Millions Worth?

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Sure, today they’re worth…

…millions.

Nobody’s taking that away from you.

However, tomorrow is a different story.

What will be the shape of your wealth in the far future?

In what form will it be stored?

Identify that now.

Why?

Because you can start pickling away in that form, little by little, right away.

Moving a chunk in one shot is tricky.

You don’t do it unless you’re absolutely sure.

You don’t bet the farm – on anything – period.

You need to move things quantum by quantum, over decades perhaps.

Final destination needs to tally with your risk-profile.

If it doesn’t, you’ll end up being jumpy and uncomfortable, and you’ll make a mistake.

When it’s about your life-savings, there’s no margin for error.

Why has one taken such a large chunk of time into the equation?

You see, when time is expanded long enough, difficult problems becomes easy to solve, because one ends up actually taking time (read pressure) out of the equation. Time is quasi infinite, so one doesn’t worry about it anymore. One has TIME to think things over and decide at leisure.

Also, over the course of a large chunk of time, you might realize that your risk-profile has changed, and that you are not comfortable with the final destination anymore.

That’s fine.

Change the final destination.

You define the rules, remember.

The bottom-line is that in whatever shape and form your wealth is stored in the end, that shape and form needs to address everything you wish that wealth to do and be.

There’s a lot of thinking that needs to go into this.

Do that thinking now.

It pays to be financially literate.

Nobody really teaches you financial literacy in school or college. Bookish knowledge is not financial literacy. Field knowledge is.

You’ve got two options.

Get financially literate on your own by playing the field, making mistakes, and learning, or…

…find someone who is already financially literate, and learn from him or her, from his or her mistakes.

Whatever you do…

…do it now…

…to ensure that your wealth not only remains intact…

…but also continues to grow.

Auto is our Motto

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What are you doing…

…that’s not on auto?

Next question is, why is it not on auto?

On purpose?

Sure, there’s some stuff that you’d like to reserve for manual. That’s absolutely fine. 

Not on purpose?

Meaning you want it to be on auto, but haven’t done so?

Right. 

Why not?

Meaning, why are you not using that one big benefit of the twenty-first century – to your benefit?

Lazy?

Couldn’t care less?

Too complicated?

In a rut?

Whatever. 

Bottomline is, you’re losing out. 

How?

You’re losing out on…

…time…

…growth…

…evolution…

…prosperity…

…sense of fulfilment…

…sense of purpose…

…and what have you.

You can also start figuring out for yourself how you are losing out on these things amongst other stuff. No spoon-feeding here. 

Automation is the minimal requirement of our times. 

Automation requires transcending an activation barrier. 

This is a one-time input, before the concerned process goes on auto. 

This is also the step which makes many lose interest in going auto. 

Well, from nothing comes nothing. 

You will have to put in that time and energy for the one-time input that pushes the process into auto-mode. 

There is no way around it. 

However, each time you’ve gone auto, you’ll get a huge sense of accomplishment. 

You’ll want to recreate that feeling again and again and again. 

You’ll want to put more and more stuff on auto. 

With so much of auto stuff adding to you from the background, your life will become fuller. More enjoyable. More time to pursue whatever you wish to pursue. More time to be…

…you.

Cheers. 

Going for the Jugular

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It’s time.

Why…is it time?

And, time for what?

It’s time to go for the jugular.

Meaning?

There comes a time, when, after working hard, struggling, doing the whole jig, the rigmarole, you achieve your basics. 

Well done. Pat on your back. 

Then you secure these basics. 

Forever. 

If you can. 

Wonderful. More pats.

Worry factor is now out of the equation. 

Your family is secure. 

Food, safety, education, all basics intact.

Fantastic. You deserve an award. Not that anyone’s going to give you one. Frankly, nobody could care less. Never mind. You know in your mind that you’ve achieved a milestone, and that’s enough for you. 

Whats the next step…

…for you?

Jugular. 

What is this jugular?

Multiplier.

X-factor.

Call it what you will.

What does this mysterious thing do?

Better question is, what is it capable of?

You’re looking to multiply your networth. 

Isn’t everyone?

This is different.

Why?

Because it is coming as a logical conclusion, and not as a first-step with no experience and no secure basics. 

You’re keeping your head-earned basics secure. 

Nothing is touching these. You’ll be surprised at the kind of courage secure basics give you to act further. 

Next, you’ve identified an area where your skill-set can be leveraged into huge profits with minimal risk. 

Specifically in the market, these areas are abundant. 

So what exactly will you be doing?

Playing on a minuscule portion of your net worth. Let’s say not more than 2 %.

Leverage.

Stoploss.

Profit-run.

Position-sizing. Scaling up upon profits. Scaling down upon losses. 

Overcoming your demons. 

Fear.

Worry.

Hypertension.

Exuberance.

Hubris.

Complaecency. 

Going beyond. 

Multiplying.

Going for the jugular. 

Multiples obey skewed mathematics

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Income-oriented linear growth… 

… is single-digit. 

There’s something safe about it. 

It’s going to be there tomorrow, and after that. 

Safety means less return. 

You’re ok with that as far as basic income is concerned. 

Not so the case when it comes to wealth. 

With wealth, the multiple comes into play. 

Multiples dance to a different tune. 

The search for multiples can lead to negative return – for a while at least. 

It’s risky. 

The level of reward is coupled to a corresponding level of risk. 

In comes time. 

Wealth-play is palatable because of time not pushing you to the wall. 

With time on your side, the ingredients of your cooking-pot have ample opportunity to sprout and grow into big trees. 

If growth is not able to take off owing to lack of circumstance, this becomes the breeding ground for negative return. High deductibles add to the bleeding. After all, it’s wealth you’re seeking to generate, and there will be a little blood. 

Such is the game. 

If you can’t stomach the ride till the multiples emerge, play the income-game full-time instead. 

However, once you start to digest the wealth-game, you realize that is really quite headache-free and pretty much an auto-pilot avenue. 

You’ll even start to like it when the first multiples emerge! 

Wealth vs Income – the What-When-Why? 

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Income… 

… comes into your account… 

… on a regular basis. 

You spend a good part of it to keep your ball rolling. 

If you save even a fraction, well you’re good, because this ain’t really an age of savers. 

Saved income goes into an asset. 

The asset either generates more income…  

… or, it generates wealth. 

What is wealth?

Wealth is not income. It doesn’t come into your current account regularly. 

Wealth accrues. 

Wealth compounds.

Wealth multiplies. 

Wealth grows in a skewed fashion, like an exponential curve.

You don’t look at your wealth-generating asset everyday. Once a month is more than enough. 

Wealth funds big events. 

Wealth likes time, to grow. 

Wealth separates you from those who are hungry. Hunger is not limited to food. 

Have you understood the nature of wealth?

What do you strive for, income or wealth?

That’s a huge question.

I’ve answered it for myself.

It’s taken 12+ years to find the answer.

I’ll tell you.

I now strive to create wealth.

Why?

Because income has become just a number to my mind.

Yes, that’s the answer for me.

Learning to define the quest for income or wealth requires the appropriate state of mind.

When income becomes just a number to your mind, addition to it doesn’t satisfy you anymore.

Yeah, the kick is missing…

…the thrill-factor…you know what I’m talking about. 

In an effort to rekindle this missing element, you then look to create wealth.

There’s enough additive securing you. 

You start going for the multiple. 

🙂