Dalelorenzo's GDI Blog

Why the market heroes you follow should not influence your buy-sell ideas

NEW DELHI: Hero worshipping has been in vogue in the world of expending for as long as it has existed. And it’s no different on Dalal Street.In the early 1990 s, people followed the original Big Bull, Harshad Mehta, then came Ketan Parekh in the late 90 s, and now investors follow every buy-sell move, every furnish spoken of and every note made by the likes of Rakesh Jhunjhunwala and Radhakishan Damani keenly and try to execute them.Cult Investing is an expression some marketplace professionals use to refer to the herd behaviour of a group of investors, who buy or sell whatever their favourite investors are buying or selling, with ended indifference for their own risk profile.Such attitude, market ex-servicemen say, more often than not, ensues in losses.Shyam Sekhar, Chennai-based value investor who also guides the asset advisory firm iThought Wealth, says whenever there is influx of apprentice investors on Dalal Street, it presents a perfect opportunity for such sects to grow.“In every sell hertz, a new regulate of investors are now in. They try something which will assist them in standardise or follow a set structure. This is the perfect providing for an investment cult, ” Sekhar said in a video he posted on his YouTube channel.“It is not new. When I came to the market, the investor cult was to follow the large-hearted adventurers. In 1992, all of you would know who the operators were. In 2000, you had another person getting a religion following; in 2008 you had proponents of business groups getting religion following, ” he said.What mostly attracts investors to follow a faith of a acclaimed asset temperament or an institution is the narrative they create around themselves. People, who do not want to do their own research, speculate following the' successes’ of those investors will create money for them.In actuality, yes, we are capable of realize some coin next following a faith. But it is not something that can work for everybody and the needs of people who propagate cults eventually come to hurt the investors following them. “The fundamental problem with following worships is that they are created, propagated, grown and proliferated really to spawn other beings buy stocks, which they already own or realize other parties follow a thinking into which they are already heavily devoted. When this happens, people who come into this last are the ones going to be thumped the most, ” Sekhar said.In propagation of cults, the failure of investors is usually not highlighted as much. Even Rakesh Jhunjhunwala has said in many of his interviews that people know about the success of Titan, but they do not those investments that bombarded for him. Someone who follows an ace investor needs to be aware of this.“If a large group of beings follows a particular fixed of stocks, a particular thinking and a particular person , nothing is wrong. But you need to know what is the other side of the legend, which you are able to never hear, ” Sekhar said.“When you hear only the greener surface of the storey, you don’t have the much needed balance in your investing, this effectively leadings more people into believing that the stock price has moved up and, hence, this is the only way to think and that eventually dominates their financing approach, ” he said.It is not that only retail investors which has recently started their wander fall for such faiths, countless reputed investors and wealthy person likewise tend to fall prey, he shows. “So, in a sense sects democratise collapse, if that fantasizing fails to live the test of the time, ” says Sekhar.

Read more: economictimes.indiatimes.com

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