MARKET WISDOM: TRADER OR INVESTOR ?

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QUOTE 

Investor Action can Depend on two factors in a stock.
Price Action or Business Action. 
Focus on the 2nd. As long as business still makes sense and valuations still supportive, ignore the first and stay invested.

Jiten Parmar

Thoughts/Lessons from the Quote

  1. Most people buying shares (even as investors) don't understand the business (let alone business action).
  2. Most people understand the price action.
  3. Emotions move with price action because emotions does not have the anchor called understanding the business (and business action).
  4. And many times, business action waves the red flag, price action is bullish and the ignorant investor gets trapped.
  5. The first step is to acknowledge whether we understand the business or not. In most of the stocks I have invested, I have to confess that my business understanding is limited (as compared to some of the seasoned investors).
  6. If our understanding of the business is limited and/or non existent then we are better of recognizing ourselves as traders and follow the price action as the gospel truth (Bhav Bhagwan Che).
  7. Most failures and big losses come from confusing our intellectual and emotional capability with our financial capacity.

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Thank you for reading the Blog and Stay Tuned in.

Disclaimer :

This blog is for educational and awareness purpose only. The views are intended for discussion and exchange of views rather than an expert opinion. This is not an recommendation to buy or sell or invest in the stock market and derivatives market. Kindly exercise caution and perform your own due diligence before investing in the market, after fully and clearly understanding the risks involved.

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