Expert Advice...

After keeping away all my life, I finally added the vice to the long list of the ones that I already possess... well, I quit smoking last year and had a big empty space for a big one... I thought it was only fair and took the plunge (how the human minds rationalize – big asset and bigger liability)... I am talking about the share market – i started trading actively, especially in futures and options (F&O)... the fact that i had quit my job helped the matters – i had all the time to trade and do the “research”...

(if u r planning to quit because i am talking about share market, pls don’t... stay on...)

The experience of the last few months has been exciting... The things started very well... I made money for the first 2 months... (i know, i know – i am the same guy who kept preaching people to keep away from the evil called F&O and how everyone i know who did not has only lost money and how i am yet to see a person who has made ANY money... may be i am like one of those catholic church priests...)

Anyways, you can call that beginner’s luck... it indeed was – for the next two months, i lost all the money i had made and more...

I did some thinking and realized that after having made money for two months, my mind rationalized that i had become an expert, that i had cracked the code and as a result i was doing deeper research and was making the “sure shot” calls... i knew everything!

Oh, that was so stupid – to think that i had become an expert...

Let me give you an example of how the so called “experts” assess the market... i get a weekly mailer, following are the excerpts –

It starts thus – “We understand the need for the right research to make smart investment decisions...”

That’s good, very reassuring... then it goes blah blah bluh bluh bleh bleh, sprinkles some data points from here and there and comes up with the following conclusion –

“For the Nifty, the 5,150 remains an important resistance sustaining above which it can test 5300 levels. On the downside, the 4,960-5,000 zone would act as support for the coming week”

For uninitiated, it simply means – the market will go up, go down or remain where it is right now!! And they call themselves experts!!!

In other words, the so called experts are no experts – their predictions are as good (or as bad) as the “daily forecast” column of the newspapers OR the weather predictions...

And there I was, fooling myself thinking I had “cracked the code” and was making “sure shot” calls... no wonder i lost money...

So what did i do? Very simple... i went back to the basic reality of “i do not know anything about the share market”... which is what i was doing for the first 2 months... i was going with a very basic technical call to assess if the share is going to go up or down... it worked more often than not...

Result – the approach worked and i started making money again...

So, where do i stand right now? In the 6 months of existence in the share market, i have broken even – made, lost and made... wait a minute... that’s if i don’t consider the brokerage... after considering brokerage, i am still in the RED...

So here is an “expert” comment – the only people who definitely make money are the brokers – doesn’t matter if you make or lose money in the process... they definitely do...

So do i plan to stick around or get out?

Of course i plan to stick around – it’s so much of fun! And what’s wrong in making money when “you don’t know anything”...

ps – If you need help with “making money while not knowing anything”, i provide “expert advice” at a very reasonable price... call me!