Teachers' Day | On the Street, Mr Market is the greatest educator: Ambareesh Baliga

I began investing in the stock markets in the early 1980s when it was better known as “Satta Bazaar”, a literal translation means “Gamblers’ Market”. Unlike now, when you can get a lot of information at the click of the button or can attend umpteen courses online to understand how to invest in the markets as well as dime-a-dozen advisors who are there to tell you what to do, in the 1980s, stock market was not a widely-discussed subject. Even those who were investing or trading were doing so in a hush-hush manner – the ‘uncles’ I knew who were investing. It was like an exclusive club where a teenager wasn’t welcome.

I managed to convince two of them who introduced me to their friendly broker – Gupta ji and vouched for my credibility so he could take orders from me to execute in the outcry system of Calcutta Stock Exchange. These two uncles also became my first teachers in this stock market journey which started as a fascination – then a hobby and finally my career.

The first important lesson I learnt from them was to do my own study (wasn't called research in those days) - they suggested that I read up the ILO Book on “How to read the Balance Sheet” which helped me, as an undergrad, to decipher the Annual Reports. And that was the only information one could lay hands on in those days, in addition to The Economic Times and the Bombay edition of Financial Express, which would come late in the evening.

Despite the regular meetings with seasoned market participants, one only got more of “khabar” – heard on the Street or the so-called “inside information”. The Annual General Meetings (AGMs) were attended more for the lunch boxes they served and the goodies they distributed than to understand the happenings in that corporate. However, these interactions, helped me understand the technicalities of the market.

Over the last 4 decades, I have read enough and more books of the greats - on the greats – as well as various top-end business magazines. In those early days, the only magazine I could lay my hands on was Business India. Progressively, we were spoilt for choice and now we have information overload. If you have read 5 of these must-read books on investments – then you have probably covered 90 percent of the mantras of “how to invest well” in the stock markets.

Related stories

Ambareesh Baliga

Market Analyst|Independent

• 
  Correction of over 10% will create panic in market as most people riding momentum with overconfiden...
• 
  Speciality Chemicals stocks rally 300-1,000% in last 5 years: Is there any juice left?
• 
  DAILY VOICE: The ‘beginner luck has played off well with Robinhood investors in 2020: Ambareesh Ba...

However, the most important aspect of investing is how you are able to apply these mantras and create your own style of investing. The mistake which most of us make is to blindly ape another successful investor – unfortunately it doesn't work that way. Every person is different and unless we successfully create our own style, we are bound to fail.

This is where Mr. Market becomes the greatest teacher of all. Creating your own style is always through 'trial & error' unless you are fortunate to have perfected a style early on. With every mistake you make, Mr. Market teaches you the hard way through losses and missed opportunities. And, he continues to punish those who don't learn from their mistakes and never spoon-feeds you. So one should maintain a log book on the decisions taken, which helps us go back and analyse where possibly we have gone wrong, and take corrective action, the next time.

Another important trait which Mr. Market taught me was to ignore most of the noise around, especially the daily ones. There was a time when my daily mood swings were in line with the status of the market. Fortunately I realized early that the cost-benefit of this is not favourable for me nor my family, thus cultivated the knack of filtering.

At times, Mr. Market also gives you a long rope, especially during euphoric times, when you think creating wealth is all about getting the right tips without putting in any efforts. It's only when he whacks you and those tomorrow's "Blue-chips" bite the dust, you realise that wealth creation requires a lot of grind.

My initial teachers are no longer around but Mr. Market continues to be there to teach me whenever I let that tinge of over-confidence get better of me. Happy Teachers Day !!!

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.