Many people think that investing is something difficult. Impossible to understand, making it impossible for them to Make wealth by using the money.
Another extreme case is about the investors who blindly follow the ‘CRAZE.’ They follow what a trend in the market is. And as it is not difficult to make any trend in the market, we always listen, “This time it’s different.”
If you ask many investors why they bought any Stock, some of them are not investors, and if they want to hold it, they are doing it because of other people.
In between all of this, the actual quality may be ignored.
Warren Buffett, with his business partner Charlie Munger, come up with a simple tenet.
Invest only if you can understand what it is.
The simple meaning is if you try to understand and fail it. Then don’t INVEST.
A simple example is from my Life.
Pharmaceuticals Sector is something out of the universe for me. As a commerce student, I know the Credit Rating Agency, NBFC, BANK, Microfinance, and Asset Management Company. But for ANDA, I don’t know. What is it? And there are many things. So when I decided to invest in a Pharma company, I didn’t know how much the importance of the company’s products, so I performed poorly.
But in banking and logistics, my Favourite Sector. I know what is going on.
Yes. I appreciate this.
