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Last Updated : Oct 18, 2018 07:31 PM IST | Source: Moneycontrol.com

From taking care of minority shareholders to having perseverance, 5 investment lessons to learn on Dussehra

Ram stands as the symbol of many virtues and his life and events surrounding Dussehra can also be used for understanding a righteous way of investing

Moneycontrol Contributor @moneycontrolcom

Shailendra Kumar

Dussehra, also known as Vijayadashami, celebrates god Ram’s victory over Ravana. The festival signifies the victory of good over evil, light over dark and truth over deception. Lord Ram is also called Maryada Purushottam, meaning a perfect man.

Ram stands as the symbol of many virtues and his life and events surrounding Dussehra can also be used for understanding a righteous way of investing, which ultimately brings investing success.

1. Invest in a company that takes care of minority shareholders: Ram took care of everyone around him even the lowest of the low. He took care of Sabri — the old tribal lady in the forest, Jatayu  - the bird king who was slayed by Ravana and the monkey soldiers among many. This resulted in everyone around Ram putting their best effort to ensure his victory.

2. Buy stocks where management mission is shared by all in the team: Many companies ignore the interests of their juniors and that is a sign that someday the management will ignore the minority shareholders as well. Inclusiveness is a matter of habit.

We must check whether the company is top-heavy or is there delegation of authority and sharing of fruits with the junior-most employees as well. In the army of Ram, even the foot soldiers were looked after and were passionate about their mission. This resulted in important contributions from juniors like Nal and Neel by helping the army make the bridge over the sea.

3. Cut the losses whenever you realize your thesis is wrong: At times, we as investors may find ourselves in the situation of Bhibhishan. After doing proper research and building a right hypothesis, one invests in a company but later on gets proven wrong due to an error in research or because the hypothesis on the stock is no longer true.

In such a situation, just like Bhibhishan left Ravana, we need to cut our losses and exit the stock.

4. Keep an eye on changing macro landscape, do not be complacent: When Hanuman entered Sri Lanka and gave a glimpse of the power of Ram’s army, Ravana remained complacent and did not surrender, as requested by Hanuman. He failed to realize the course correction needed.

Similarly, we should avoid companies where the management does not understand and redefine their strategy amid changing business environments.

5. Persevere like Ram: It's not always about winning the race, Sometimes thing will not go in favour for an extended period. It requires a strong conviction in investment philosophy and processes so that one can stay focused till the time victory comes.

Disclaimer: The author is the Director & CIO at Narnolia Financial Advisors. The views and investment tips expressed by investment experts/broking houses/rating agencies on Moneycontrol are their own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
First Published on Oct 18, 2018 12:03 pm
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