Actionable Insights (22nd May 2024) : Why most of the market participants don't make money even in "long term investing" and who really makes it BIG?

Once you have committed, stop doing micro management, stop checking Q o Q results, stop listening to social media gurus, have faith and believe on the promoters and give them sometime to execute.

👉 Forget about trading or speculating in the market like doing intraday trades, Future & Options etc. where hardly anyone makes money. Even if you make it, you will eventually lose that money and the vicious cycle of recovering the losses will start which will lead to your bankruptcy because we as a human beings have BIG EGO and this is the real cause of our downfall.

👉 Well, if traders don't make money then investors must be making it right? But this is again not true. Here, we are not talking about make 20-30% returns in few months or may be making 100% returns in your portfolio over a period of 2-3 years, here we are talking about making 25-30% CAGR for longer period of time, at least 10 years which means multiplying your portfolio 10 times in 10-12 years!

👉 Actually the so called long term investors (anyone who buys a stock & hold it for 3-5 years can be termed as long term investor) are NOT really a long term investor. Either they are "forced investor" or they are "trader pretending to be an investor" or they are "momentum seeker".

👉 In the world of instant gratification (I call it, like, share, subscribe generation), YouTube short videos makers & consumer generation, Instagram reels addicts where everyone is trying to grab everyone's attention. Our attention span is becoming shorter day by day, it is close to impossible not to do anything and be a lazy investor.

👉 Faster information flow, distraction / noises surrounding you via social media where you people look for their endorsement, it is not only difficult to stay calm, stay invested for long without mind getting diverted but impossible to have patience to hold something unless you get excitement or thrill seeing the stock price going up. Actually, you want activities in your portfolio and this wishful thinking goes against the philosophy of wealth creation which happens slow, steady and over a period of time.

👉 If the stock prices doesn't move, it's a problem for you because you don't get excitement or thrill and if stock prices moves you start getting insecurity of loosing the profit on the table because your mind start considering unrealized profit as actual profit (even my mind does so). So, an investor is trapped between greed to earn fast and fear of losses what he has made.

👉 Smart & educated investor with some basic knowledge of fundamental research do big another mistake. They start doing micro management of a company, they look for perfection in the company. They will monitor how much order the company gets, what is their quarterly numbers, what broker or Twitter gurus are saying about this company and so on. They think that it's their duty to do so but it's duty of management not yours. If you are really so much concerned about this then go and join that company as an employee or manager.

👉 For any business there are 4 key entities (Promoters/Management who drives the business, Employees who executes or works day in day out, Clients/Customers who pays for the products / services & Investors who provide capital for a business). Out of all these 4 entities, Investors are like a silent partner actually doing nothing. So, the duty of an investor is to do a proper due diligence of the company before committing their capital and once committed stay calm and let the other 3 entities do their work.

👉 Investors are like "King Maker" but unfortunately they behave like "Slaves". Their main job after investing is to keep quite and stay invested but they feel that they have duty to do micro management which shows that they have not does their homework properly and have insecurity of their investment. This micro management like checking everything about that company, checking Q o Q results and getting worried which makes them behave like a trader not investor.

👉 First try to understand this. Promoter of a company always plans something for 3-5 years or 5-10 years in mind. While investor knows this before investing in that stock but they start expecting results in 3-5 months or at most 1-2 years. This is where mis-match happens, when your goals are not aligned with the goals or plans of the management, you are bound to sell your stock immature or early.

👉 Ask any successful investor today, they all have one single regret / mistake - "Selling a winner too early in it's life span". So, if you want to make big money, you have to change yourself first because it is not the stock which makes money for you, it is how you behave with that stock makes money for you.

👉 So, once you have committed / invested money, stop doing micro management, stop checking Q o Q results, stop listening to social media gurus, have faith and believe on the promoters/management and give them sometime. You have invested in the business which runs on the ground not on your XLS sheet. You are king maker and you have to behave like a king not a slave!

Happy Investing....

~ Team 3C Capitals