This is a honest confession from a Long term Investor or better you can call me Loser.
When I invested for the first time without any experience and without investigating and analyzing about that particular stock it was certain that I will be a loser eventually. But I did not realize this till I lost my money. I will tell you what did I do to call myself a Long term investor.
I bought a particular stock say XYZ for 5k. The moment I bought the stock, the stock price of XYZ appreciated by 2%. I was so happy. I did not monitor the share prices of XYZ for couple of days as I was busy with my work. After two days the price had fallen by 10%. I was worried. I thought of selling the shares immediately but I did not want to lose my money so I thought let me wait for a while once it appreciates I shall sell it. I waited for two weeks only to realize the stock prices were going south, the unrealized loss was close to 25%. I thought let me buy few more shares of XYZ so that the effective cost price of the share decreases and once I get a decent margin I shall sell it. This time I bought the shares for another 5k. As expected by me, the price of the stock went up more than my effective cost price. But I did not sell the share, the only reason I can give is my greed and nothing else. I told myself the prices will increase and I will make more money. I kept telling this to myself only to ensure I lose my money. After a couple of days, the stock prices went down drastically. The unrealized profits were close to -45%. It was a disaster. I was in +15% profit and suddenly after a couple of days its -45%. This was partly because of my carelessness and greed. I did not check my stock prices daily and my greed not to sell the stock when it appreciated for 15% is the main reason for my losses.
After all this, I again bought some more shares of XYZ for 5k and waited for 4 months to sell the stock at 15% loss. This way I became a Long term investor rather a loser. I am not against Real Long Term Investor. I don’t want you guys also to become a Long term Investor like me because of stupidity and greed. I could have made money from this super flop deal. But my greed was way too controlling. This clearly shows that a person with emotions is not a suitable candidate for Investing in Stock Market. A guy like computer who does mechanically stuff and understands numbers will make crores.
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Engineer's Finance 