Lot of people feel that market memory of 2008 is forgotten. March 2020 was a stark reminder on 2008 (in case it was forgotten). I feel market memory of 2003 - 2007 is forgotten. People have forgotten what a bull market feels like. Why is it imp to know this is bull market? 1/7
Knowing where we are in the cycle of market is very important. And I would recommend 2 books for that. 1. Mastering the Market cycle - Howard Marks and 2. Edwin Lefèvre’s book: Reminiscences of a Stock Operator. 2/7
Howard marks book is good but it is theoretical and it does not give you the flavour of how it "feels" at various stages of the market cycle. 2nd book I highly recommend because it makes you understand the emotions at every stage of the cycle. 3/7
We have read how IQ is not the most important thing in Markets. People those who have made it big in the market always had very high EQ (Emotional Quotient). If EQ is so important and your stomach (ability to sit through ups/downs) is the most imp body part. 4/7
If stomach is so important then you must exercise that part of your body to strengthen it (No I do not mean crunches or plank). One has to know how one will react when unthinkable events happen For eg 9/11 attacks - markets close for few days 5/7
eg continued....NDA 1 loses by 1 seat - 20% down ckt, UPA 2 comes back to power 20% up ckt and more, worldwide pandemic and country-wide shutdowns. Emotions felt at those moments are not easy to forget. Put yourself in a situation and imagine losing 50% of the portfolio. 6/7
Visit here tischendorf.com/2009/07/02/jes… and read the couple of pages from the reminiscences to give you a flavour of what it means when someone says - we are in a bull market. 7/7
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