Hello FY2015! Introducing ‘The Calm Investor’

This is our “Hello World” post. Welcome to thecalminvestor.com!

‘The Calm Investor’ is an informational website on the topic of equity investing, mainly in the Indian markets.

Investing, and particularly equity investing is an industry with high-visibility. An industry associated with shiny tickers, slick graphics, smartly turned out commentators and the big headlines in the pink newspapers. There is something irresistible to the idea of “buying” and “selling” companies based on opinions formed about their short or long-term prospects. There are few things as reaffirming to one’s intelligent self-image as it to make the make the “right” call and to be able to talk of a “multi-bagger”. “…120% on so-and-so in just 2 months!” Conversely, one could feel like they were missing the plot if their stock market activities were delivering anything below high double-digit returns as they seem to for others

However, the reality is that dabbling in the equity markets is a lot like those situations where one tends to laugh along with the group even when one hasn’t understood the joke. Only, in this case, very few have in fact got the joke.

Much time and effort is devoted to “techniques to beat the market”. Fact is a lot of the heartburn from investing losses come from speculation, excessive trading, reacting to what everyone seems to be doing and our own inherent behavioral biases when it comes to money.

The Calm Investor looks to go back to the basics of equity investing, dispel common misconceptions, present basic concepts and approaches to invest in the stock market. It will keep the dense jargon to an absolute minimum and instead use examples that strip away extraneous details in highlighting the underlying principle.

Calm Investing Principles

  1. Markets have and always will be always unpredictable and often volatile in the short term. Anyone who says they know where the market will be a week / month / year from now is guessing (or has super powers). Accumulating wealth is therefore based on the realization of this inherent unpredictability
  2. In spite of all the mentions of arcane mathematical concepts, there is no formula that can completely explain market movements. Stock prices move due to a combination of changing company fundamentals and the interactions of hundreds of thousands of human beings aka “investor sentiment”. Excesses in sentiment ranging between greed and fear are what makes stocks over and under-priced
  3. No investor can eliminate the possibility of periodic and significant drops in value of their equity holdings. They can however refuse to overpay by ensuring the price they pay is reasonable considering the underlying business
  4. Behavioral biases like loss aversion, anchoring etc. are prime enablers of destructive trading behavior. Being aware of and managing them is more important to successful investing than developing complex analytical models and methodologies
  5. And finally, no approach, no matter how wildly successful, is worth the time if it leads to frayed nerves and sleepless nights. A good investment philosophy is one that lets you reduce time spent thinking about wealth and lets you go out and do things

On thecalminvestor.com, we will post articles that go into more detail about what tends to work and does not by using basic principles and past examples. Know more about us here ‘About‘  and also do read the Disclaimer on what we are and are not.

Do subscribe to email updates or the RSS feed (on the sidebar). Also can connect with us on twitter @calminvestor. We’d love to hear from you at [email protected]. Queries, feedback are all most welcome!

Happy Calm Investing…

2 thoughts on “Hello FY2015! Introducing ‘The Calm Investor’

  • July 22, 2015 at 10:14 pm

    Hi. I stumbled across your website while doing a google search. Have read a few of your posts and enjoyed them. That’s why I thought I’d start reading from the very beginning – always a good place to start in my opinion.

    I am a 100% equity guy and have been at it (value style) for over a decade now. I regularly follow the other older sites in your genre like Fundooprofessor, Safalniveshak, stableinvestor etc and the works of Basant-ji.

    Your’s is a very good addition to this list. Keep up the good work!

  • July 25, 2015 at 10:22 am

    Those are very kind words. Thanks Subhodeep!

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