Tag Archives: #You

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.

Courage

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Tariff knife is…

…blunting.

500 will need to come on to have any strategic value.

500 is many things.

Call it a joke. Dream. Litany. Madness. Moronic. Ridiculous to the power of n. Whatever.

It’s still getting headlines.

500 will kill.

Since it’s do or die, all sides are coming out in the open.

Yeah, there’s real activity.

There was a 105 minute state visit yesterday. We know who flew in, and where to, with what mandate, etc.

Before that, the German chancellor, accompanied by a powerful team, came to India too.

French and German teams went to Russia.

BRICS counter is very busy, the busiest it has ever been.

New deals. Alliances. Promises. Protection.

Currency?

Yes. Coming.

This one will bypass being bullied.

New world order.

Process is in spurts and then there’s brief time for whatever equilibrium that can be achieved under the circumstances.

And that, exactly, is our style of transferring out…

…of cash…

…and into…

…assets.

Spurt, balance, spurt, balance and in the middle, somewhere, at any resulting low, we go in.

What assets?

The ones we are comfortable with.

Can the blunt knife still hurt?

Yes, 500 will kill. Businesses, relations, trade…

So what then?

The idea is to make 500 work for oneself.

How?

In the wake of 500, there will be many lows, in many assets. Those are entry points. You need to have the courage to buy.

What if there’s a lower point later?

You buy more there, later. This chronology might continue for a while.

How long?

Till the wealth transfer is complete from the old world order to the new world order.

So how long?

Don’t know. 15 months. 5 years. Anybody’s guess. I’m banking on about 3 years or so.

If your liquidity lasts 15 months, how will you manage to buy for 3 continuous years?

As I said, everything is happening in spurts. There will be pockets where my exit rule will trigger for various entries.

Oh, so your entries will generate liquidity along the way, rule-based.

Yup.

Additionally generated liquidity will lead to more buying, along the way.

True, after taking care of my personal liquidity needs.

Hmmm, that’s something.

Yeah. Keep going. Don’t be afraid. Don’t let the screamers knock you off your game. This one will be won if we don’t blink. Stare the bully in the face. Wear the bully down. At the bully’s core, there is huge fear. That’s the difference between the bully and us. At our core, there is …

…conviction…

…which results in…

…courage.

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.

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. 

The Difference between Winning and Losing

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It’s a whisker. 

You’re doing everything right. 

You’re following a proven strategy. 

You’ve adapted. 

You’ve removed many mistakes from your resumé.

Your strategy has undergone refinement. 

Why haven’t you started winning yet?

Yeah, we’re used to asking million dollar questions by now. 

In fact, such questions are all we ever ask. 

What do you think is the answer?

The answer is you. 

Yes. 

There’s something about you. 

It’s not fitting. 

You’ve got two options. 

Either make your strategy fit to this something, or …

… make yourself fit to the strategy. 

Both options can work, and you can start winning. 

Which option is easier to implement?

I think the more relevant question here is a different one. 

Which option befits the situation?

I’ll give you an example. 

I’ve got time issues. 

I make my market strategies fit my time issues. 

I can’t change my time issues, for something or someone will fall short then. Like everyone, I have many commitments too. 

Therefore, I fit my market strategy around me. 

I keep fitting, fitting, fitting, till the strategy either works, or is discarded for want of a win. 

Yeah, that’s me. 

Maybe your situation is different. 

Maybe you need to cater to the public. 

You’re not expecting the public to change to your whims and fancies, are you?

Not as a newbie, no no, that would be a cardinal sin. 

After all, the public is your paymaster, right?

Customer is your king, or queen. 

It becomes different when you turn into a celeb. 

Then you can dictate fashion. 

However, till you become a celeb, fit to the public, if you want to win. 

Behave in a manner that people want to pay for what you have to offer, again and again and again.

Maybe there’s a slight whisker of a trait in your behaviour that people don’t like. 

Change it. 

Whether you’re changing yourself, or fitting your strategy to meet your unchangeable nature or schedule, sometimes it’s only a whisker that makes the difference between winning and losing. 

People have lost olympic medals by one-hundredth of a second. 

What’s that millisecond lag in your own life that you need to get rid of?

MP vs MoS : the lowdown on Trade-Entry

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Margin of Safety (MoS)… 

… hmmm… 

… wasn’t that in investing? 

Well – surprise – it’s in trading too. 

You can enter a trade with MoS. 

How? 

Ok.

ID the trend. 

Wait for a minor reversal.

Let the reversal continue towards a pivot, or a support or a what have you. 

During this reversal, whenever you feel that you have considerable MoS, well – enter. 

Why shouldn’t you wait for the pivot to get touched? 

Things happen real fast at a pivot. Upon a pivot-touch, you can lose your comfort-zone even within minutes. 

Two vital things can happen at a pivot. 

Either there’s a quick bounce-back, or the pivot gets broken. 

Bounce-back means your trade is now in the money, and that you can go about managing your trade as per your trade-management rules. Wonderful. 

Pivot-break is not a worry for you. 

Why? 

Because you’ve placed your stop slightly below pivot, after the noise. 

Upon pivot-break, you get stopped out. You take the small hit and move on to your next trade. 

Eventually, things heat up. 

There is movement. 

Tops get taken out. 

Fast money can be made. 

How do you enter here? (Needless to say, for shorts, everything is to be understood reversed). 

Momentum play (MP)… 

… is the weapon of choice. 

You set up a trigger entry after a top or a resistance or a what have you, and wait for price to pierce, and for your entry to get triggered. Then you place your stop, below top or resistance or what have you. 

MP vs MoS is a matter of style. 

If you’re not comfortable changing your trading style to adapt to times, that’s fine too. Stick to one style.

If you’re conservative, stick to MoS. 

In a frenzy, however, MoS might almost never happen. 

In a frenzy, entry will be triggered exclusively through MP.

Take your pick. Adapt. Do both. Or don’t. Do one.

You call the shots. 

This is about you.

Building Your Own

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You do. 

In the process, you learn. 

More experienced ones advise. 

Fine. 

You listen to their advice. 

Ok. 

Stop. 

Think. 

What experience are we talking about?

Their experience.

It’s great for them.

It might be good for you. 

To a point. 

To learn the ropes. 

You need to take it from there. 

Markets are such. 

They give each player a unique experience. 

Why? 

Because each human has a unique psyche. 

You are you. 

You should play like you.

That’ll ultimately teach you how YOU can win. 

Winning is also about implementing adapted systems that suit you and your curriculum in every small and large detail. 

Proper winning might take years to manifest after you’ve ironed out all the niggles in your character that pertain to the market. 

I’ll give you some examples. 

It’s taken me twelve years to tune my multi-faceted life towards the markets in such a manner that I now trade regularly. 

It took me ten years to discard all the tech-overload and work with the bare-required-minimum.

Seven years was what I needed to realize that I was my best friend and my worst enemy in the markets. 

Now, if I need to learn something new, I go it on my own. If it’s still out of reach, I get an instructor. Only to the point I can walk alone again. 

When you’re walking alone, you learn to listen to your common-sense. 

Your systems develop inside you. 

As you keep acting, these keep fine-tuning. 

Soon, because you’re persistent, these develop winning ways. 

Wishing you a successful market-foray, whatever market you are in! 

🙂 

Nath on Equity – almost there

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Market being down 61). should not pinch you. If such condition does pinch you, you might react accordingly, and do something painful. 

You make market-downs not pinch you by being 62). miniscually committed at any given time. 

Also, 63). you continue committing your miniscule quanta during market downs. 

That’s because 64). you’ve made sure you have lots more to commit, by defining such an approach for yourself. 

You are 65). happy that the market is down, because it is giving you an opportunity to enter. 

You 66). switch off market TV. You don’t wanna know from them, because they themselves don’t know what works for you. 

All 67). useless emails and smses are put on block. 

That’s because 68). information overload is your nemesis. 

You 69). learn from everything you experience. 

However, you 70). don’t follow any market-person. 

That’s because 71). you are unique. Only you can benefit yourself, ultimately. 

You are going to 72). teach yourself to become a strong hand. 

Thus, you will 73). not get affected by the behaviour of weak hands, ie. the masses.

Instead, you will teach yourself to 74). take advantage of the behaviour of weak hands. 

Market players 75). commit the same blunders again, and again and again. 

That’s because 76). every few years, a whole new batch of market players starts behaving unreasonably. 

This proves to us 77). that the only real learning comes first hand from market-play, to you and you alone, and only from your market-play.

This also pretty darn well insinuates that 78). theoretical learning from books or universities has zilch value in the markets.

You’re lucky 79). if the market knocks you around during your first seven years of market-play, when the kitty is small. 

That’s because 80). exactly that learning from 79). is going to earn you big as the kitty increases during your meat-years of market-play. 

System Addict

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System. 

Make. 

Now. 

Life in the markets requires a plan.

No plan…no life…in the markets. 

Many don’t know this. 

Some are finding out…the hard way. 

Others are looking for free lunches…and not finding any. 

Few…have found out. 

They’re perfecting their plan…chiseling away. 

When they have something substantial…it’s called a system. 

Have system…will move. 

It’s as simple as that. 

That’s another master-word. 

What?

Simple. 

The most powerful systems in the world…are simple. 

They consist of a few basic elements, woven into a mother element. 

They have an on-off switch which even a donkey can operate. 

But that’s about it. The donkey can operate the on-off switch. Only the maker can operate his or her system properly.

Why?

Because the maker knows the nitty-gritty. 

Nitty-grittiness shows itself while making. 

No one else knows it. 

Only you do, as a system-maker. 

Also, no one else needs to be bothered about your system, because your system only applies to you, and to no one else. Unfortunately, it ain’t so in real life. Many don’t want the hard work involved in developing a system. They just want the system. That’s dangerous. 

Why?

You see, those who have a system falling into their lap, well, they don’t know its pitfalls. They can’t know. They haven’t had that alone time, when the system showed its limitations. That’s why, they’re in for a big surprise if things get ugly. They risk losing everything. 

Don’t bother about anyone else’s system. 

Develop your own. Know how to work it. Know when to work it. Know when to stop. Know when to find remedies. Know when to pull the plug and develop a new system. 

This game is about you. Not about the markets. Not about the money. Not about anyone else. Not about anything else. 

It’s about you. 

Realise that. Now. Please.