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Last Updated : Jul 07, 2020 03:15 PM IST | Source: Moneycontrol.com

It’s no Tinseltown! Nepotism doesn't work in market, patience and experience do

Coming from a family of traders or investors may have some advantages but the market is a dynamic place, where you learn and grow, pedigree is of little use there.


Talent and hard work are two essentials for success. Are they? No, if you are talking Bollywood, politics or business these days. As debate rages over nepotism, the fine art of dishing up favours to family and friends, markets are insulated from this scourge.

The market is full of surprises, a level playing field with no patience for privilege.

"Thankfully nepotism does not work in the markets. You could come from a generation of master traders or investors but the market treats you as a rookie and does not give out freebies," wrote Gautam Shah, Founder of Goldilocks Premium Research, on Twitter.

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Investing is a skill honed by experience and patience. Coming from a family of successful traders or investors may have some advantages but the market is a dynamic place, experience and knowledge are no guarantee to success.

The coronavirus outbreak is a case in point. The unprecedented disruption caused by the pandemic has taught that it takes courage and discipline to be a smart investor and there is no playbook to fall back on.

While such black swan events have a strong short-term impact, in the long term, patience always wins. The people who lose are those who try to time the market.

Nepotism has a tendency of promoting stereotypes but in the market this seldom works.

It is important to understand that the market works in cycles. Each sector has a time of ebb and rise. There are emerging trends due to new technologies, new developments and socio-political changes and investors have to learn about these on their own.

One of the most important parts of investing is the ability to find good stocks. Knowing what works in the market and finding the right path to investment comes with experience.

Experts say one must avoid decisions based on a pattern that probably does not exist and merely represents investor behaviour.

Actor Sushant Singh Rajput’s death late last month once again triggered the nepotism debate in the Hindi film industry. The industry, critics say, is very hard on the so-called outsiders as the tribe of star kids grows.

From the church, nepotism has come a long away. You often hear of how easy it is for an “insider” with little talent to carve a place for themselves while much-talented “outsiders” have to toil to get their due, if at all.

Market teaches one to deal with setbacks and failures and there is little scope for nepotism.

As Kavita Kané writes in her book Sita's Sister: "Privileged did not mean special; just fortunate. And fortunes could change in a flash."

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions
First Published on Jul 7, 2020 03:13 pm
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