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Sunday, September 5, 2021

Teachers Day: Mr.Market Ambareesh Baliga Talks

Happy Teacher's Day

I started investing in the stock market in the early 1980s when it was known as "Satta Bazaar," which means "Gamblers' Market" in Hindi. Unlike today, when you can access a wealth of information at the touch of a button, or take a slew of online courses to learn how to invest in the markets or hire a dime-a-dozen consultant to tell you what to do, the stock market was not a commonly talked topic in the 1980s. Even those who were investing or trading — the ‘uncles' I knew who were investing – did so behind closed doors. It was like being a member of an exclusive club where teenagers were not permitted.
Happy Teachers Day

I was able to persuade two of them, who introduced me to their friendly broker, Gupta ji, and vouched for my integrity, allowing him to take orders from me and execute them in the Calcutta Stock Exchange's outcry system. These two uncles were also my first professors in this stock market trip, which began as a passion, progressed to a hobby, and eventually became my profession.

The first significant thing I learned from them was to conduct my own research (it wasn't called research back then) - they recommended that I read the ILO Book on "How to Read the Balance Sheet," which assisted me in deciphering Annual Reports as an undergrad. And, except The Economic Times and the Bombay edition of Financial Express, which arrived late in the evening, it was the only information available in those days.

Despite regular interactions with seasoned market participants, one only obtained more "Khabar" – or "inside knowledge" – heard on the street. Annual General Meetings (AGMs) were attended more for the lunchboxes and refreshments supplied than to learn about what was going on in the company. These contacts, on the other hand, aided my understanding of the market's technicalities.

I've read enough and more books by and about the greats, as well as different high-end business journals, during the last four decades. Business India was the only magazine I could get my hands on back then. We've gradually been spoiled with choice, and now we're drowning in knowledge. If you read five of these must-read investment books, you've probably covered 90 percent of the "how to invest successfully" mantras in the stock market.

The most crucial component of investing, though, is how you may use these mantras and develop your own investing approach. Most of us make the mistake of trying to be like another successful investor - regrettably, this does not work. Every person is unique, and we are doomed to fail until we can successfully develop our own personal style.

Mr. Market becomes the best teacher of all time at this point. Unless you're lucky enough to have developed a style early on, developing your own style is always a case of 'trial and error.' Mr. Market teaches you the hard way through losses and missed chances with every mistake you make. And he keeps punishing those who don't learn from their mistakes, and he never feeds you. As a result, one should keep a diary of judgments made, which will allow us to go back and analyze where we may have gone wrong, and take corrective action the next time.

Mr. Market also taught me to disregard the majority of the noise around me, particularly the daily ones. There was a time when my daily emotional swings mirrored the stock market's performance. Fortunately, I learned early on that the cost-benefit analysis was not favorable for me or my family, so I honed my filtering skills.

Mr. Market can also throw you a long rope at times, especially during euphoric periods when you believe that making money is just about getting the proper recommendations without putting in any work. It's only when he whacks you and those tomorrow's "Blue-chips" bite the dust that you realize how much work wealth development entails.

My original professors are no longer with us, but Mr. Market is still there to teach me anytime I allow a smidgeon of arrogance gets the best of me. Teachers' Day is today!!!


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