China Stock Market Meltdown

China stock market meltdown, screams the headlines. True that Shanghai Composite went down by a gut-wrenching 32% in 18 days despite China’s best efforts to stem the selling.

Let us read this news again keeping in perspective that China market more than doubled in last one year.
Do you think that China economy more than doubled in last one year. NO. In fact it grew at the least pace of 7% in 25 years.

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Grief & Happiness : 2 sides of same coin

Happiness and grief are 2 sides of the coin. If some thing gives you grief then the opposite should get you equal amount of happiness.

Let us try applying this principal in the stock market.

You don’t kick yourself as much when you are sitting on a profit than the losses you make in the stock market.
This means that the grief associated with loosing money is far more than happiness that you get when you make money.

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Cinderella Story

What do I do if my stock has appreciated more than 20% in one quarter. Cash out as it is likely that your Cinderella story will turn in to pumpkin and mice if you overstay at the festivities.

What do I do if my stock has depreciated by the similar % in the similar period. Sell. Book the loss. Don’t let your ego come in to play that you made the wrong choice. Take this money and look for another Cinderella story

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Is Your Brain Wired To Diversify

After reading loads of books and attending multitude of seminars, here is my verdict.

The only key to making money on sustainable basis is diversify, diversify and diversify.

Sounds easy but goddamn so difficult to implement. Simple reason being that an average human brain is not wired to handle diversification. Most of the guys in the trading community fail to see beyond a basket of 5-6 shares.

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Know Your Limitations

It is a fact proven by data that 90% of people in the stock market loose money. It is also a fact that so many of us loose so much money with in one year of entering the stock market that they swear not to enter it again.

And yet we have so many new comers in the market year after year.

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