Why people waste time to know view on market?

 

Why people waste time to know view on market?

Most people (investors or distributors) want to know views about market, what will be market level in future? When will Sensex touch 1 lakh etc? In my training these questions are often asked. My answer is I am neither God nor a financial astrologer. Only God knows about future and even the most knowledgeable expert does not know it. I say this because of undermentioned reason which is based on fact and logic.

Market movement is decided by billions of people and hundreds of factors. Which factor will affect which person in what way who can correctly say? How long that factor will stay and how again people will react who can say?

When people ask me my view on market, I simply ask that person can you please tell me what you will be thinking 24 hours from now or what will be your mood 3 days from now? We don’t know. So, if I do not have a 100% correct answer about myself, which I know the best and have lots of control (not full) then how can we say about billions of people who are involved in market?

Sometimes my trainees ask me that then how come Mr X is saying such thing on a TV channel. My simple reply is whatever he says is on some presumption, assumption based on today’s fact. But when we all know our mind has changing thoughts then how some human being can say what billions of people will be thinking 1 day, 1 month, 1 year, 10 years from now w.r.t market? Assessment or analysis on present may or may not turn true later on. I also say, go back and check yourself what he had said few or some years back and judge how accurate he had been.

Why people are interested to know about view on market, its future level? It has to do with human psychology. Anything which is glamourized, expressed in story, give some visualization, do catch attention and interest. An urge to know something of future which I don’t know also creates curiosity. Many people think if they talk such things before others they are accepted as more knowledgeable and get respect.

The experts can give somewhat correct answer about quality and not quantity (return or price or level). That too as per assessment of facts as on date. Someone asked me about investment in one of the top IT companies. I said yes as of now seems it looks as one of the best investment opportunities. But can I say the same 10 years from now. Answer is “I don’t know”. Reason is, the future prospect of growth banks upon the quality of people who are managing the business. Their decision affects the quality of product/service, their financing decision, their investment decision, their service quality etc. Who can say who will be handling these decision 10 years from now or the status quo will remain in future also. People, process, competition etc changes with time.

Most investors think risk comes from economy, market, company, product, business etc but if we go deeper the root cause of all the risk is the human being itself. They are the consumer, they are in the management, they are investors, they are policy makers etc. Human being thinks, and behave irrationally most of times (i.e. emotion). No one can predict who is thinking what. The only thing one can predict is everyone wants betterment in their lifestyle i.e. growth. So, any investment decision should be based on “growth” only. Safety which many people think is different from growth is in fact a part of growth only. (Watch my coming article: Is growth and safety same or different?)

My advice to each and every investor is please don’t ask about view on market but do investment based on your own margin of safety (Watch my coming article: What is an investor margin of safety). Don’t even ask is it right time to invest or not. All time are right to invest. The better question should be how to invest (lumpsum or SIP or lumpsum then STP). Ask in which asset and security there is possibility of making loss and why or making gain and why. Don’t ask how much you will gain or how much you can lose.