Wimbledon 2008 Gentleman’s Final played between Roger Federer and Rafael Nadal is considered to be the most epic in tournament history. Nadal won after gruelling 5 sets to lift the most prestigious trophy in Tennis. World no. 1 Federer was obviously disappointed that he could not win his favourite Wimbledon crown for 6th straight time. Now if you like statistics Federer hit more aces, got more 1st serves in, hit more winners, made less double faults as compared to Nadal. However, Federer still ended up on a losing side.It’s interesting to know why this happened. Roger Federer made too many unforced errors than his opponent Rafael Nadal. This was the difference between losing and winning. Nadal played within his limitations, making fewer mistakes and triumphed. Federer played sublime Tennis, perhaps one of the best but in the process gave away too many points by making unforced errors.
What’s the learning for investors???
Everyone must define his/her investing philosophy and stick to it. Most of the time we get swayed by next best thing or themes prevailing in the market and start chasing them with a greed to make instant money.
“If you buy fancy stocks in the market, sooner than later that fancy ends and you end up with a fancy loss.” – Parag Parikh
Warren Buffett never invested in IT stocks(Now his company holds IBM) because he couldn’t understand how IT companies make money. Warren Buffett, George Soros, Peter Lynch, Seth Godin, Seth Klarman, Radhakishan Damani, Vallabh Bhansali, Raamdeo Aggarwal became successful investors because they stuck with their competencies, followed a well defined process and applied utmost discipline.
My sincere request to everyone who wants to start investing in stock markets is to invest via mutual funds in systematic manner. As you gain confidence and learn the nuances of long term investing you will surely remember me for my advice. But equity funds must be part of your portfolio to convincingly beat inflation and to sustain your standard of living.
“It is remarkable how much long term advantage people like us have gotten by trying to be consistently not stupid instead of trying to be very intelligent. – Charlie Munger
So to be successful in investing all you need to know is what blocks the success, it’s better to avoid stupidity rather than seeking brilliance. If you understand this, you will do well as an investor.
Thanks and keep learning with a curious mind.
Happy Christmas & an advanced prosperous new year ahead !!