Beware of the bears

Bear argument always sounds smarter.

We have all seen people around us, that always want to contradict popular opinions. They don’t offer ideas or solutions of their own, but only want to ridicule everyone else. They would always come up with most bizarre explanations for things, and will always fail to see the simplicity of things.

Truth is that these people are con-artists. They have understood that they canhijack conversations by projecting confidence and hurling insults to others. It is very important to beware of these con-artists.

Over the last 5 years, I have seen many PIs who used to project confidence go bust. In 2021, when Chinese stocks started falling they failed to see the structural issues in Chinese economy and governance and doubled down on their investments in China. They were calling people fools to be missing out on the opportunity in BABA 0.00%↑. You can imagine how things turned out for them.

There were so many blew all their money shorting TSLA 0.00%↑. There was one in particular who called Tesla a bubble and bought GME 0.00%↑. They said people will never adopt EVs. They said 400km of range is too less. They said EVs are worse polluters than ICE. They said legacy automakers will demolish Tesla. Meanwhile, those who put all their money in TSLA 0.00%↑ didn’t do very well either as the company has lost 40% value so far this year.

Today you will see so many PIs with a single strategy that AI is over-hyped. They’ve bet heavily against NVDA 0.00%↑ and other players in the space. Yet others have bet too much on these stocks. It is unlikely that either of them will survive.

You will also find those with large leveraged shorts against $NSDQ100, bickering about how people are idiots to still be buying stocks. They may be right in saying that the market is over-bought, but most of them will get margin calls they can’t match before the market does finally correct.

Don’t even get me started on the crypto junkies.

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All you need to be successful on the stock market is a simple and boring strategy. I also call it a Common Sense Investment Strategy.

• Buy stocks of companies that are executing their strategy well.

• Do not try to pick a winning horse, diversify your bets.

• Limit allocation to individual stocks and individual theses.

• Secure profits and maintain a balanced portfolio.

• Don’t be too easily swayed by pundits or market trends.

• At the same time, don’t try to be too contrarian, the market is very stubborn and you don’t need to fight it.

• Know that you are here to make money, not to prove your point. Always introspect and fix your mistakes. Take a loss from a bad investment and put the money to better use.

• Remember that there is no shortcut to success.

Here’s another post where I explain this strategy in detail.

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