today i am going to explain the process of selecting quality stocks by giving an example.....



suppose you are very very hungry and  i give you an option from 2 bowls to select which ice cream you want to have....the first bowl contains plain Ice Cream and the second bowl contains same plain Ice Cream but poison mixed in to it.....Now it is been told to you in advanced which bowl contains plain ice cream which you can consume and the other ice cream mixed with poisonwhich after eating will gaurantee that you die....

obviously without any thinking and giving a second thought you will select the bowl with plain ice cream....but what about the second bowl of ice cream with poison mixed in it....you will not even look at it because your brain immediately starts firing DANGER signals and telling to avoid having that ice cream bowl....

so here two process of thinking is happening....

first without thinking to have the plain  ice cream

second to avoid the ice cream mixed with poison......here your brain is thinking and telling you to avoid because you can die....

i hope it is clear till here....now the other story.....

Now in a bull trend and rising market in euphoric phase i am again giving you an option to select one option from the 2 bowls.....the first bowl containing blue chip stocks...like infosys....reliance industries....HDFC Bank....and the second bowl containing Penny stocks like.....Vakrangee....Suzlon.....LEEL....

Now what will the investors do.....definitelt they all would have selected the Penny stocks Bowl and have neglected the Blue Chip stocks bowl....am i right....i think so...that is what the greedy investors do when there is high tide and everyone swimming naked will enjoy swimming in the sea.....

but they forget it is a death path for their financail well being....i mean knowingly they are killing themselves financially....

in the first example they avoid the ice cream with poison mixed in it and in the second example they invest in penny stocks with poison mixed in it and which is a sure path to disaster for themselves and also for their family....because they in return deprive their family of financial stability and security by lossing money in such manner....

in the second example the process of thinking is only GREED and the logical thinking is gone for a toss....i mean in the dustbin....in the first example you will think rationally and save yourself but in the second example you will think irrationally and kill yourself financially....what type of behav iour is these.....please introspect and think...

[2:18 PM, 2/28/2019] Jiten Patel: In Month of February also Nifty was within the trading range of 11000 and 9900..... now comes the decisive months of March or at the most the ultimate month of April...... time wise correction finally will get over and also price wise to some extent..... last few days to fill up  your  treasure chestbox......be smart and intelligent and decide wisely.... don't miss the opportunity......

Above is my personal opinion and view and a recommendation to buy or sell.....
[2:21 PM, 2/28/2019] Jiten Patel: Above is my personal opinion and view only and not a recommendation to buy or sell
[10:30 AM, 3/1/2019] Jiten Patel: Sjvn my long term purchasing formula price between @22/- to 18/-......
Yesterday Sjvn made a low below 22/- and hit the higher band of  my long term purchasing formula price.....

It is not a recommendation to buy or sell and is my personal opinion and view only......
[11:41 AM, 3/1/2019] Jiten Patel: If in 5 years Sjvn goes to 40/- it's all time high price.....then from current price cagr comes to 13% and if you add divided yield of 8:60%......so total cagr return  will come to 21:60%....... which by any standard is very good.....
The above is not guaranteed result and can vary as per market conditions.....it is only a future projection and as per my personal opinion and calculations only......it is not a recommendation to buy or sell......
[5:51 PM, 3/1/2019] Jiten Patel: After 19th March..... anytime Nifty can change its current Trend......
[5:54 PM, 3/1/2019] Jiten Patel: After 19th March..... anytime Nifty can change its current correction Trend......
[2:33 PM, 3/2/2019] Jiten Patel: Nobody in these world does these calculations so they miss the golden opportunity to make wealth for themselves......
[2:33 PM, 3/2/2019] Jiten Patel: If 200000/- after 20 years can give you 7700000/-.....then 20000000/- can give you 77,00,00,000/-........ now you will be shocked to know these.....
[2:33 PM, 3/2/2019] Jiten Patel: If you think of compounding your money only then will you be able to make lots of unbelievable wealth for yourself......
[5:58 PM, 3/2/2019] Jiten Patel: Read why people don't invest in stock market and look for safer heaven like bond investing
[5:58 PM, 3/2/2019] Jiten Patel: Right now in the current market status your intraparietal sulcus part of the brain is activated and is firing intensely and aggressively..... you are visualising and imagining what  the  consequences will be of the actions to be taken by you....but which as yet not taken..... the more uncertain the consequences are the more active the intraparietal sulcus becomes......

The thought of losing money is so inherently alarming that it ends up triggering intense activation in Intraparietal sulcus part of the brain.......
[5:58 PM, 3/2/2019] Jiten Patel: Should I invest in current market....what if war breaks out.....I will make a huge loss..... what if BJP losses the election market will tank and I will make a huge lose....the visualisation and imagination of these two scenarios is happening in Intraparietal sulcus part of your brain and the moment you start thinking again about the above two scenarios it will start firing aggressively everytime....
What if monetary policy rates will not be reduced by RBI..... market will go down and I will incur a loss....
[6:53 PM, 3/2/2019] Jiten Patel: Why people do Bungee jumping or sky diving.....when faced with a probability of injury or death also at times.....
During the time of bunjee jumping or sky diving the fear centre of your brain Insula and the amygdala fires vigorously and intensely and aggressively along with the thinking part of the brain the Cortex to stop and prevent you from taking part in these thrilling adventurous sports activity......but still you do it why is it so.... even after immense activation of the fear centric parts of the brain to avoid it....

Part2.......
At the time of so called adventurous sports activity which are dangerous.....the people who perform these sports are all experiencing the anticipation of thrill and excitement.....the nucleus accumbens part of their brain is firing so strongly and very intensely that the pleasure of excitement and thrill over rules the fear of injury or even death for that matter.....

Now imagine at the time of Euphoric Market Top..... the nucleus accumbens Reward part of the brain is firing so intensely and aggressively to make more and more profits that we cannot even  feel the firing and activation of the Insula and the amygdala along with the Thinking Cortex  which are giving out fear signals that the market is way too high and at unimaginable top levels and it is high time to get out and book profits......
But we still remain invested and infact invest more money at Life Time Top high levels.....so the urge and demand to make more and more money because of the instructions given by our nucleus accumbens Reward part of the brain will not allow us to get out of the market at top levels and will ask for more and more money......

As you must all have experienced how is it possible to get out at the top..... Yes.....it is not possible...... because you are going to crave for more and more of making money at market tops.....
[11:08 AM, 3/3/2019] Jiten Patel: If you invest like the herd.....like ordinary people your results will be exactly like them.....but when you invest differently like the 2% of the smart investors who create wealth by investing in stocks your results will be like their results.....

So you decide for yourself that you want to be the 98% of the ordinary retail investors or with the 2% smart investors.....
[10:38 PM, 3/3/2019] Jiten Patel: https://youtu.be/JgkvTRz_Alo
[10:38 PM, 3/3/2019] Jiten Patel: Why is your mobile phone a Gambling device like a Slot Machine......
[10:33 AM, 3/4/2019] Jiten Patel: A good example.......
Yesterday I was standing at a shop and fully focussed and engrossed on doing my activity..... suddenly I felt something touching my legs and within a micro second without thinking I jumped......so the reflexive part of my brain made me jump because of Fear..... the initial reaction taken by my reflexive brain was to protect me.....so knee jerk reaction.....my reflexive brain thought that it might be a dog fiddling with my feet.....and so I got scared..... but then I realised it wasn't a dog....it was something else  which touched my feet  and I shouldn't have been scared at all.....then my thinking part of the brain.....the reflective brain took over and told me it is nothing to be scared of......

Same way in market when a stock goes down like Zee Entertainment and when we see the whole world selling even our friends and neighbours are selling..... without any faith or conviction..... by blindly looking at them we also start selling...... for a moment we don't even realise why are we selling and for what reason...... have the fundamentals of the company change at all......are the promoters corrupt.....is the company in lots of debts..... without even using this it reflective thinking part of the brain we blindly follow the path chosen for us by our reflexive brain to sell and we do that effortlessly even if we have to incurred a loss for that matter.....

So think twice before you take any decision......
[10:19 AM, 3/5/2019] Jiten Patel: Eicher motors in September 2017 went to 33480 and made a life time high price..... today it is around 19500..... Why is it so in the first place that it went to 33480 and now no one wants to buy at current 19500 price levels......the greed part is over and fear part has taken over.....

It is not a recommendation to buy or sell...... please consult your financial advisor.....
[10:24 AM, 3/5/2019] Jiten Patel: .... because at the time of frantic euphoric buying when the price touched 33480/-  there were two prices in the Eicher motors stock..... Value Price and Speculative Price..... Now the Speculative greed price is being sold off and coming down to the more realistic Value Price......
[2:41 PM, 3/5/2019] Jiten Patel: March 2nd week Kae Baad Varna April 2nd week Kae Baad yeh bull khadaa hokaar daud Naa shuru kar daega......maagar investors sautae rahaa jayaengae.....
[2:41 PM, 3/5/2019] Jiten Patel: These is what going to happen..... investors will be caught napping and nifty will run away.....
[2:41 PM, 3/5/2019] Jiten Patel: It is time to fill your treasure chest
[4:17 PM, 3/5/2019] Jiten Patel: You know one of the most important thing of our Brain....
To not except change and because of it we cannot interpret the changes happening around us...... secondly our brain doesn't want to come out of its comfort zone and maintain its status quo.....and so sudden strong changes are not interpreted by our brain......so we miss most of the rallies when the trend changes.....

The above has no consideration and relevance to the current market situation.....

MARKET CYCLE......

[9:54 AM, 3/12/2019] Jiten Patel: all my messages sent from last so many months on market moving from 2nd week of March  and Investors will be caught napping...... people who won't read the messages will miss out on the next bull market if they are investing in stock market....
[11:13 PM, 3/12/2019] Jiten Patel: SIP equity mutual funds inflow @ 8000 crore per month approximately...... when the same flow in SIP equity mutual funds increases somewhere between 14000/15000 crore per month..... one has to get cautious about the greed factor of the Retail investors because the more the stock market will go up the more money they will pump in the SIP equity mutual funds and more and more Greed of making money......Also as the stock market keeps moving upwards on its trajectory path of making new life time highs the Risk will also keep on increasing and will move in Dangerous zone with market making life time highs...
[7:53 AM, 3/13/2019] Jiten Patel: If I have to give a scale from 0 to 10 for market cycle upwards trajectory from Bust to Boom......Then wE aRe stAnDing At sCAle 6/7 for marKet cyCle upwards trajectory from Bust to Boom......wE sTill haVe tO rEACh SCale 10 of the market cycle.....
[8:21 AM, 3/13/2019] Jiten Patel: We are moving towards Nifty 12000....
[8:38 AM, 3/13/2019] Jiten Patel: Reliance industries
Axis Bank
ICICI Bank

Are going to rock n roll on the upside......

It is not a recommendation to buy or sell.... and my personal view and opinions only......
[9:16 AM, 3/13/2019] Jiten Patel: FII’s have been buying aggressively in March Series From 1st to 12th March ; Total Cash buying worth 13,312 Cr., what have they been buying Summary:-
Top 12 Delivery marked with price gains in March series
ICICIBANK 9.13 Cr. Shares, IDEA 7.59 Cr. Shares, SBIN 5.11 Cr. Shares, ASHOKLEY 5.19 Cr. Shares, PNB 4.79 Cr. Shares, COAL INDIA 4.38 Cr. Shares, AXISBANK 3.10 Cr. Shares. RELIANCE 2.97 Cr. Shares,  BEL 3.42 Cr. Shares, BHARTI 3.30 Cr. Shares , M&M 2.42 Cr. Shares  and L&TFIN. 2.20 Cr. Shares
[9:16 AM, 3/13/2019] Jiten Patel: Fiis also buying from 2nd week of March.....😀
[9:37 AM, 3/13/2019] Jiten Patel: Yes investors are still sleeping in the ocean of fear.....they are scared because of the recency bias story going on in the market about the results of general lok sabha elections......yes the fear stories of election......war with Pakistan will keep them away from the market and because of these fear the market will keep on moving high till the results of general election most probably......the last rally from 11800 nifty to say 12300 to 12500 will be driven by the retail investors because of FOMO......Mae rahae Gaya bhai......duniya kamaa rahii hae.....fiis khareed rahae hae aur Mae saoo rahaa huu......fear of missing out feeling will start from 11800 onwards......

It is my personal opinion and view only and not a recommendation to buy or sell..... please consult your financial advisor for recommendation.......
[10:00 PM, 3/13/2019] Jiten Patel: Whatever people think about my messages but time will show and prove everything.....I have been writing so that I can distribute my studies and knowledge to the people which I have gathered by reading hundred of books ......read thousands of articles in Google and watching thousands of videos on YouTube about stock market investing and my conclusion because of the  information I have gathered from the above books and watching videos is that retail investors investing and speculating and trading in stock market will never ever make money in the long term..... the only few who will make money and get out of the market at right time will be only because of luck and only 1% of the people will be able to do that...... rest all other 99% people have to and will definitely lose money in the stock market until unless they invest systematically and having a process and to follow that process in a disciplined manner.......
[8:44 AM, 3/14/2019] Jiten Patel: Current market uptrend rally should continue around 9th to 10th April atleast......
[8:44 AM, 3/14/2019] Jiten Patel: Nifty sudden upside move towards 11300 have caught investors unaware..... now if the nifty current uptrend continues till 9th to 10th April with very small negligible correction in between then the Anchoring Bias will play a bigger role in investors mind and eventually missing out of the current uptrend rally.....Also the sudden upside in nifty is very difficult to digest because just few days back there were hundreds of bad news and only few good news.....but still the market went up.....how is it possible for markets to go up......disbelief bias will rule over your mind and will keep you away from investing..... investors are still anchored to buying levels of 10300 nifty......if nifty comes to the level of 10300 we will buy.....Now Anchoring Bias and disbelief bias along with the fear of uncertainty..... doubts ..... will keep you away from investing in the market......

It is my personal opinion and view only and not a recommendation to buy or sell
[10:05 AM, 3/14/2019] Jiten Patel: Market will take a breather for its next move upside.....2/4 days of breather and then nifty should resume it's  uptrend from next Tuesday or Wednesday towards new highs.......
[1:51 PM, 3/14/2019] Jiten Patel: By next coming Tuesday or Wednesday if market corrects in a range and does not go below 11100 on closing basis then the probability of nifty going upwards are 85%......
[3:42 PM, 3/14/2019] Jiten Patel: If Nifty have to and wants to go up without letting the retail investors to participate in the current uptrend......then any corrections will be short lived time wise and also small correction price wise within a range....nifty won't go below 11100.....

Suppose say if nifty in the coming correction corrects to 10600/10800 levels....these time the whole world will come to purchase in the downfall and they are waiting for nifty to correct......
But such happy scenarios.... market doesn't entertain and market will not let us purchase stocks at our time and at our price levels......
Supposedly if market is correcting and if investors are waiting to purchase in the market correction...... then such a happy win win situation is never ever presented by the market to the market participants and it is just a wishful dream......
[9:06 AM, 3/15/2019] Jiten Patel: United spirits is a good buy from these price for long term.....
[9:08 AM, 3/15/2019] Niraj Patel Vadodara: 👍🏻
[9:36 AM, 3/15/2019] Jiten Patel: Current market uptrend rally should continue around 9th to 10th April atleast......
[11:57 AM, 3/15/2019] Jiten Patel: It is human psyche and also within you and me and all market participants that what we want to believe we will blindly follow it and take necessary steps.....and follow it up with action..... even after writing so many messages people will read and accept what I have written.... even understand it properly.....but still will do what their belief system will say..... even if they are wrong and which might ultimately result in a Loss....... belief system along with emotion is so strong that it is very difficult to uproot it from its foundations and it is gifted to us by evolution.....so it is no good fighting it.....but realising and being aware of it is the only thing that one can do and it is enough to get you to the shore and save yourself and also save you from future losses.....

People will continue with their beliefs and habits even when good things are thrown towards them...... and stick to and will accept onlywhat they believe......
[2:52 PM, 3/15/2019] Jiten Patel: Where are we in the market cycle.....

I will give you an example.....
Take water in a vessel and start heating the water slowly slowly.....
Phase 1 water is the plain tap water..... which we are heating.....
Phase 2 now after say 10 minutes of slow heating if you notice very few small minute bubbles start showing and surfacing.....
Phase 3 now after few more minutes of heating from small bubbles we can see big large bubbles start to surface.....

So in short from phase 1 of plain still water .....to phase 2 of slightly heated water with small bubbles .....to phase 3 of heavily heated water with large uncontrollable bubbles.....

Now compare the same phase 1 from year 2008 of still water to phase 2 year 2019/20 of small bubbles......

What today we are experiencing phase 2 of market with small bubbles here and there......but the path from phase 2 small bubbles to phase 3 large bubbles have just started which might last till 2022.....and these phase 3 bubbles will be so huge and big and uncontrollable by anybody......and the end result will be there will be no bubbles left...... everything will evaporate in oblivion and so will your hard earned money.......

Today We are in Phase 2 cycle and movie towards Phase 3 cycle......last leg of the Bull market trend........
[10:02 AM, 3/16/2019] Jiten Patel: https://youtu.be/aliXvFdFxzo
[4:09 PM, 3/16/2019] Jiten Patel: https://youtu.be/BE53EkxKWpw
[4:09 PM, 3/16/2019] Jiten Patel: Watch the above video after 40th minute...... And it is about how our brain make us Choke in situations where we face Pressure...... uncertainty...... when facing with a Loss (socially and monetary).....Doubts...... when we stand on a stage to give a Speech in front of a audience......

The same way we Choke ... Freeze and become clueless as to what to do when suddenly the stock we bought open next morning with a 20% circuit on the Downside......
[9:30 AM, 3/18/2019] Jiten Patel: Article Written on 14 th March.....now slowly slowly FOMO will start playing.......


If Nifty have to and wants to go up without letting the retail investors to participate in the current uptrend......then any corrections will be short lived time wise and also small correction price wise within a range....nifty won't go below 11100.....

Suppose say if nifty in the coming correction corrects to 10600/10800 levels....these time the whole world will come to purchase in the downfall and they are waiting for nifty to correct......
But such happy scenarios.... market doesn't entertain and market will not let us purchase stocks at our time and at our price levels......
Supposedly if market is correcting and if investors are waiting to purchase in the market correction...... then such a happy win win situation is never ever presented by the market to the market participants and it is just a wishful dream......
[11:00 AM, 3/18/2019] Jiten Patel: As told earlier when Nifty corrects for next few days and it doesn't go below 11200..... Then before 10th April we can see nifty breaking 11750 and making new life time highs....
[12:36 PM, 3/18/2019] Jiten Patel: Same is for Trading and Speculating in stock market or for that matter in any financial assets......the anticipation of making bags full of  money and a huge kill in the stock market is so strong .....that when there is possibility to make money then the probability is thrown out of the window...... what is the probability of you making in stock market in the long term.....nearly zero......but your brain will twist the probability to possibility of making money......
[3:46 PM, 3/19/2019] Jiten Patel: Sent on 13th March....

Only 3 stocks are Rocking....
Reliance industries
Axis Bank
ICICI Bank.....
[10:49 AM, 3/20/2019] Jiten Patel: If you want to Profit......read the Below message which was sent on 13th March.....

If I have to give a scale from 0 to 10 for market cycle upwards trajectory from Bust to Boom......Then wE aRe stAnDing At sCAle 6/7 for marKet cyCle upwards trajectory from Bust to Boom......wE sTill haVe tO rEACh SCale 10 of the market cycle.....

I am revising the scale of current market cycle to phase 6 from a scale of 1 to 10...... And the current bull trend should last some where till the years 2021/2022.....
[12:39 PM, 3/21/2019] Jiten Patel: In these auspicious day of holi.....the mantra of making it big in market is to know......
Skill.... business and the management of the company
And the most important is psychology....
Emotions..... without learning psychology investors will not be able to make money in market.....

So I would like to tell investors in coming 4 to 5 years everyone will make money in market but then everyone will for sure and definitely will lose lots of money in market so learn to know your psychology and your emotions.....

marKet cyCle................

Only thing which one can know about the market is its marKet cyCle and at which phase we are currently in that market cycle.....
Supposedly if 2008 is considered the bottom of the market cycle where the market was in full fear and pessimism (assuming a scale of "0")  to the Euphoric phase of the market cycle which we might experience in the coming years (assuming a scale of 10)....

Then as per my understanding we are currently stAnDing in PHase 5.5 of these structural Bull market Trend......

But one should not forget that it won't be a smooth ride....in these journey towards the euphoric phase there are going to be many 6% .....10%..... and probably one or two18% corrections..... and there will be lots of volatility because of if and buts in between towards the Euphoric journey..... and not to forget hundreds of Stories which will result in market correction..... But I never ever give importance to any stories because they are just noises.....

The assumption is based on psychology and considering the market participation.....

Things which are to be expected in coming years....

SIP monthly figures shooting up to 15000 crore at one given point of time....
Hundreds of IPO issues coming in primary market......
Mother of IPO issue..... like Reliance power
Freely availablity of Money.....
Everyone will become expert in giving stock TIPs.....
In all Social gathering people will discuss only about stock market.....
This Time it is Different and we have Decoupled.....
Senseless Greed of making more and more easy money.....
Penny stocks will rule the stock market

The above are few things which will happen and until unless we don't go through all these phase...... the Euphoric market top as per my understanding is far far away.....

It is my personal opinion and view only and not a recommendation to buy or sell.....

[10:21 AM, 3/22/2019] Jiten Patel: Common Human Bias..... human brain cannot interpret and read small changes happening around its surroundings......and it takes a very long time for the brain to really get to terms that changes are happening but by the time the brain realises these small changes happening..... the changes become so huge and prominent and known to everyone and everybody and thereafter become out of our reach and we are left with nothing..... not understanding small changes happening is a bias given to us by evolution.......so the market takes advantage of these human bias.....
MArket trend supposedly is upwards but market doesn't go up only in one direction......4 days it goes up.....then two days it goes down......then again it goes up 5 days.....then it goes down 3 days......again goes up 4 days..... correct for 2 days......but doing these small changes which becomes difficult for our brain to read the market will travel from 10100 to 10700.....then correct to 10500.....then go up to 11500.....but in between so many small ups and downs keep on  happening.....many small changes happened but the trajectory of the market was up and up...... but because there were so many small ups and downs changes that our brain could not interpret and read that the market is going up and we should participate in the upwards trend.....
These anomally which we have will never allow us to take advantage of the market........

Uppar jayega......nechha aayegaa......wapass uppar jayega.....wapass.....nechha jayega...... how will you be able to read where the market or stock price is going......
[10:28 AM, 3/22/2019] Jiten Patel: Our brain wants certainty and any uncertainty makes our brain to be away from that particular things...... going up then again going down then again going up..... then again going down create lots of uncertainty doubts in our brain.....so it feels that there is danger in participating in the rally.....so for that reason unknowingly to us a fear is produced by our own brain and keeps us away from participating....

[12:37 AM, 3/31/2019] Jiten Patel: Giving your time in reading today than doing time pass is delayed gratification...... time pass today is instant gratification which will give you immediately pleasure and reward...... but devoting that time in reading books and in return gaining knowledge you are delaying your instant gratification to delayed gratification...... because these knowledge will earn you immense knowledge in the future......
[12:37 AM, 3/31/2019] Jiten Patel: What we have for free we never give importance......good advice we get for free we neglect it...... same way we have got human brain for free and we neglect it totally and never ever try to understand how it is functioning......so the problem starts from there itself.....
[12:37 AM, 3/31/2019] Jiten Patel: Nothing in life is complicated..... Our brain wants us to be in comfort zone so very simple things also it makes us look complicated..... brain wants to run away from change...... because for new changes it has to use its mental energy and brain does not want to waste that precious mental energy which it is using everyday to keep us alive

One psychology thing I like to tell you about market going up.....

Once the investors start gaining confidence in the market.....they will put more and more money in the stock market through IPOs..... directly buying stocks..... through mutual funds......soore money comes in the market the more the market will go up and up......
But the amount of money which should flow in the market because of the money to be invested by the retail investors is very negligible.....so lots of money is going to come in the market through these investors which will take the market to new highs and highs.....in the coming few years..... because the more the money flows continuously in the market the nifty will go up and up....

Below Message sent on 23 Rd March....

Current small correction could go on till first half of coming Wednesday and from second half nifty can again start it's upwards journey.....

But the above probability and possibility is only possible if nifty doesn't go below 11200 by coming Wednesday and the correction remains range bound between 11600 to 11200.....
Even if the small correction is extended timewise for few more days.....then nifty should not go below 11100.....

Usually I don't give such short predictions because in short term market can get very volatile...... but it is what I think and can be proved otherwise also......

But as per my earlier view only the probability of the nifty going upwards till 9 and 10 April are 85% atleast.......

Supposedly if in the current small correction which might last 3/5 days..... the nifty in worse case scenario doesn't go below 11100..... Then what I think is that market is not allowing the market participants to buy at lower nifty levels and it will confirm that market can go up to new upward levels..... and thereafter market will give the feeling of FOMO to investors and will ultimately force them to buy at still higher levels.......
So these coming few days correction is very important price wise and Time wise......

PSYCHOLOGY......NIFTY

When in Euphoria bubble top.....we swim with the flow of market madness making new highs and Highs......the people around us are all thrilled and excited to make more and more of easy money in the top bubble market...... looking at these madness of the people pouring huge sum of their hard earned money at market Euphoria makes us look like idiots sitting on the sidelines......so being social animal we have a distinct feature of learning from other people by just looking at them.....so when we see loads and loads of people investing heavily at market tops we unconsciously start investing along with them at market tops.....there is a neural brain activation happening in our brain to confirm with the herd automatically even if we disagree with them ......the neural activation happening in our brain is so strong during Euphoria that even if we conciously feel that the market is in bubble territory and we should stay away from investing our hard earned money but still looking at people investing and confirming with them will happen without us even knowing.......so the chance of selling at market Euphoria phase is not going to happen for investors......there are also many reasons......but above is one of the reason also......Greed at the time of euphoric phase is most important player to put us in trouble.....

[1:19 PM, 3/31/2019] Jiten Patel: bove is the image sent to you which will help you to understand the market cycle from Greed to Fear..... and what plays out Emotionally and in the Economics......
Presently we are entering the market cycle of Optimism in Stock Market......we still have to travel the path of Enthusiasm Excitement.....Thrill......Greed.... Exhilaration...... Delusion...... Euphoria......long way to go to reach the final Bull territory.......
[1:27 PM, 3/31/2019] Jiten Patel: Supposedly if we are travelling by car from Mumbai to Delhi......then if I have to compare it with the place where we are standing in the current market cycle then we have crossed Surat and Vadodara and have just entered Ahmedabad...... and as per my opinion and view we have started the journey from Ahmedabad to Delhi.....but in between we will have to take many stops and breaks from the last final leg of the journey from Ahmedabad to Delhi......
[2:11 PM, 3/31/2019] Jiten Patel: Optimism...... market rally is real
Belief..... let's invest it all.....
Thrill..... everyone buy now.....
Euphoria.....I'm gonna be Rich....
Bubble territory reached.....blinded by the thought of making easy money.....
[3:19 PM, 3/31/2019] Jiten Patel: Market will make you see the only things which you want to see....
If you want to hear and see fearful things which supports your thoughts and conviction market will show you the same thing......and it will cloud your rational thinking..... and make you more emotional......

So in general presently there is fear about election results and it's outcome......so marKet makes you hear and see everything about elections throughout the day till the election results outcome will be out.....
But the underlying story is that the market will keep us busy in such stories which we want to hear and see but the same time market is a conman and plays double game with us and shows double standard because it diverts our mind and brain in these so called stories but the market keeps on going up and up....... and we are still concentrating about the election and it's outcomes.....

These so called anamolly is played by the market on us everytime and leave us in fear psychosis and does not allow us to participate in the rally where we can actually make money.....
So the market will take utmost advantage of these fearful election environment which is created presently and which acts on us emotionally by going up and up..... and which happened in the last few weeks.....

Right now I am not saying to invest or buy...... and the above is my personal opinion and view only.......
[3:56 PM, 3/31/2019] Jiten Patel: The fear part of your brain is currently still firing immensely the reason being election results and so it did not allowed you to participate in the uptrend rally few weeks back..... because of uncertainty of election outcomes..... and also because of uncertainty in the relationship of India and Pakistan......
And Once you are convienced that now market is going up and up because of certainty and I got left out of the uptrend rally because of FOMO the activation in the Reward part of your brain will be so great and powerful that it will forcibly make you jump in the market at still higher levels..... and during these period the fear part of the brain will stop firing at all.....and now the Reward part of the brain will give you continuous signal to participate in the market at higher levels.....
These stage will come and surely come in next few months most probably.......

My views are personal only and please consult your financial advisor before making a decision of buying or selling.....
[10:58 PM, 3/31/2019] Jiten Patel: Before October 2019 Nifty can go up to the levels of  12600.....the chance and probability of nifty going to 12600 is almost like @95%......

But the chance and probability of Nifty going to 13600 levels before October 2019 is also almost like 75%.......

The above is my personal opinion and view only and not a recommendation to buy or sell.....

PSYCHOLOGY......

[1:28 PM, 4/9/2019] Jiten Patel: We suffer more in Imagination than in Reality.....
We spend more time in imagining the future price of the stock we purchased....... and once we purchase a stock then immediately we start thinking whether our purchase will make us money or lose us money......so repeatedly following the stock you have purchased will make you suffer thinking about the future price of the stock and what will happen of the stock.......
[4:22 PM, 4/9/2019] Jiten Patel: Let’s turn to world’s greatest investor to give us some clue. In his 1982 letter to investors, talking about two of his managers Phil Liesche and Ben Rosner, Warren Buffett wrote –


Both Ben and Phil ran their businesses for Berkshire with every bit of the care and drive that they would have exhibited had they personally owned 100% of these businesses. No rules were necessary to enforce or even encourage this attitude; it was embedded in the character of these men long before we came on the scene. Their good character became our good fortune. If we can continue to attract managers with the qualities of Ben and Phil, you need not worry about Berkshire’s future.

The lesson for an investor is that in stock market, you’re not just in the business of finding good businesses. Your real job is to find people who are running good businesses. That brings good fortune.

The words “we are fortunate” appears more than a dozen times in Buffett’s letters. Every time he has uttered those words, it was to describe his association with great managers running the businesses Berkshire owns.

Time and again Buffett has extolled the significance of associating with good people. In his 1987 letter, quoting Winston Churchill, he wrote-

Churchill once said, “You shape your houses and then they shape you.” We know the manner in which we wish to be shaped. For that reason, we would rather achieve a return of X while associating with people whom we strongly like and admire than realize 110% of X by exchanging these relationships for uninteresting or unpleasant ones.

It’s not sufficient to find a great business and ignore the character of the management. If you invest in a great business which is being run by crooked or dishonest management, it may bring profit to you in short term. However, on the longer term you will end up regretting your decision.

I have seen an example of this in my life. In 2008 I had a colleague who was assisting (part time) a group of people in setting up the technical infrastructure for a mobile software startup. He was working very hard because he had a full time job and he was also working nights and weekends in the startup. Although he was excited about the work, he would always complain to me about the integrity of his partners because of their questionable practices of generating funds for their operations. In the end, he was left with a personal debt of few lac without any results for his years of hard work.

Working with unscrupulous people, even if they’re on your side, is a deliberate invitation to misfortune. As Thomas Phelps wrote in his book 100 to 1 in the Stock Market – “Remember that a man who will steal for you, will steal from you.” Put simply, you can never strike a good deal with a bad person.

A wise man once said, your future is decided by the books you read and people you associate with. When you buy a stock, you decide to associate, albeit indirectly as a minority shareholder, with the owners/managers of the business. You’re essentially putting a trust on the managers running the business.
That person may be extremely good in his job, he may be a very smart businessman. He may also be growing the business profitably. But if you aren’t sure about his honesty and integrity then heed the advice of Woody Allen who said, “While the lamb may lie down with the lion, the lamb shouldn’t count on getting a whole lot of sleep.”

Once you find a good business, being run by competent and honest management, stick with it for a longer term, provided the quality of the business and management doesn’t deteriorate. Because the moment you break the partnership, you’re left with a task of finding another honest manager, which by the way isn’t an easy task.

Don’t be a fair-weather friend to the good stocks in your portfolio.

What if an honest manager suddenly turns evil? Well, chances are that he was always crooked, and you failed to judge his character. In that case, learn from it and move on.

At the same time, it’s delusional to hope that a dishonest CEO will have a change of heart. Crooks turn into saints only in movies and stories. It’s not impossible but very uncommon because people don’t change. Turnarounds seldom turn – Buffett may have said this for businesses, but it’s equally applicable to people’s character.

If a CEO has been known to display a clean character for a long time, he will seldom turn out to be of questionable character in future.

Fortune favours the brave, goes the saying. And in investing, fortune favours those who are brave enough to stick with their honest and competent partners through the ups and downs of market cycles.

fortunecookie

Apart from investing, if you want to be fortunate in life too, you now know the drill.
Surround yourself with people who posses the qualities that you admire. Who inspire, uplift and motivate you. Who set the right example by doing the right thing.

How do you find such people? Let them find you.

Like attracts like. Which means the best ways to find honest people is to be honest yourself. If you develop a good character yourself and practice those qualities which you’re looking in others, it attracts similar people in your life. I can personally vouch for it. The strategy has worked remarkably well in my life so far.

In the end, Lady Fortuna doesn’t just smile on honest business people. She likes anyone who possesses a good character.

[10:07 AM, 4/10/2019] Jiten Patel: Actually current nifty PE levels as per its long term earnings EPS @620 for FY 2019/20 on calculated basis...is @18.....the earnings will catch up so the current levels of nifty @ 11500  justify......
[10:07 AM, 4/10/2019] Jiten Patel: By 2022 nifty earnings will be around EPS @800..... So at 25PE atleast nifty should be somewhere around @ 20000 from the current levels.......
Presently the market earnings from last 3/4 years are pressed same way when you take a Spring and press it but when you release the compression on the Spring it will bounce back with greater force..... the same way market earnings are compressed currently.....but once the earnings start showing it will bounce back with great velocity.... maybe in 2020 we will start seeing the market earnings to bounce back.....once the earnings start to come back so will the Nifty start moving upwards......

On the above fundamentals I am projecting my future nifty levels to be somewhere around 18500 to 21000..... But if it doesn't come in 2022 then in 2023 it will definitely reach 20000 nifty levels.....
[10:16 AM, 4/10/2019] Jiten Patel: Current Nifty EPS for FY 2019 @435/-...... but long term cagr Nifty EPS on calculated basis @565/-...... within next 2 years the Nifty earnings will catch up as per its long term cagr earnings...... but note market has and is already discounting future Nifty earnings in advance so current PE on Nifty EPS comes to 29PE......
[10:19 AM, 4/10/2019] Jiten Patel: Current Nifty EPS for FY 2019 @435/-...... but long term cagr Nifty EPS for FY 2019 on calculated basis @565/-...... within next 2 years the Nifty earnings will catch up as per its long term cagr earnings...... but note market has and is already discounting future Nifty earnings in advance so current PE on Nifty EPS comes to 29PE......but on calculated basis Nifty EPS of @565...... Nifty PE @21..... only.....

The above are on FY 2019 EPS.....if you now calculate on FY 2020 Nifty EPS...... then nifty is at @18 PE only.......
[12:34 PM, 4/10/2019] Jiten Patel: One should not talk on stock specific too much...... because you're judgement will become biased because of continuous follow up..... the more you think and watch a stock...... thereafter you start talking about the stock.....and slowly slowly will start liking and loving that stock....... and so your decision regarding the stock will have more emotions in it and so your decision will become irrational......so one should avoid talking about the stock and for that matter to even avoid continuously following  and looking at the stock price....... because of the above reasons many biases will play out eventually and distort your decision making in the future.....so once you have made a choice and decision to buy a stock through your system.....process ..... And by your research and studies..... stick to your conviction and thereafter during purchasing or selling don't discuss with anyone because it might change your view and opinion completely.......
In stock market or in any financial investing at one given point of a euphoric phase..... everyone becomes an expert and he thinks he knows more and has more information about why the market will keep on going up and up in the euphoric phase......

PSYCHOLOGY......

My friends who are the follower of my messages I would like to tell you that if you are not a Value contrarian investor...then you are definitely going to lose money big time in the long term.....and also the probability of losing money are 98%....   And there are no chances to change or reverse these probability.....
But anyone following value contrarian investing and strictly following his system and process of the same for long term investing will be spared as compared to investors who are doing just the opposite......
Stock Market is the biggest Casio where people readily and happily come to lose their hard earned money and to give it to few limited seasoned investors.....
The probability for novice investors to make money in stock market by Speculating..... trading...... long term investing without knowledge is just 2% and that is also out of shear good luck.......

Believe me..... investors will keep on losing money until unless they invest by adopting the concept of CONTRARIAN INVESTING...

[10:46 AM, 4/13/2019] Jiten Patel: https://youtu.be/jTdCwxjLr04
[10:46 AM, 4/13/2019] Jiten Patel: Visualisation is the most important stimuli that the brain starts working on immediately with positive thinking...... thinking about what you want to achieve in your life.....a goal..... you have to visualise that goal with positive thinking everyday for one minute with close eyes..... so whatever you are visualising is ingrained in your hippocampus memory part of your brain...... and a specific Goal neuron is formed of what you are visualising  and what you want to achieve.....
Because of repetition of the visualisation everyday for the goal you want to achieve...... the Goal neuron will start becoming stronger and stronger and that neuron will start giving command to other parts of your brain to start working on whatever you are visualising with the help of your Goal neuron. ....
Now whatever happens in your daily routine life......all stimuli relating to what you want to achieve with the help of your Goal neuron with start capturing everyday in your daily life....the process of information gathering will be slowly slowly..... but you will not know that the changes are happening in your life because of the Goal neuron and it will be automatic and working on autopilot system without even you knowing about it .....
But eventually after few years down the line you will be surprised to know that your brain actually was working to achieve the goal target what you had visualised and had imagined few years back and now it has achieved those Goal target visualise and imagined by you and the command given by you continuously everyday to your brain to achieve that goal .......
So to achieve a goal or a set target what you have imagined and which you want to accomplish in the future part of your life or ..... firstly you start visualising in your brain that the goal or the target which you want to achieve..... secondly close your eyes and start to visualise and start talking positively with your brain about your goals and targets..... Start visualising and complimenting that you have already achieved that goal and targets.....
Visualise the scene where you have achieved the goal and target and people felicitating and congratulating you.....
It is a small process which you have to do everyday for only one minute in your daily routine life.......
[10:46 AM, 4/13/2019] Jiten Patel: Once a goal or target is set in your brain with continuous visualisation and talk to your brain about your goals and targets.....is like planting a seed.....that is planting a idea in your brain.....that the seed starts germinating in the soil..... the goal and target starts germinating in your brain..... then from the seeds roots will start developing....than a stem.....then leaves.....then a trunk..... branches...... more leaves..... and finally fruit in the end...... same way after germination of a seed of goal or a target in your brain..... the process of formation of roots....stem....trunk..... branches.....leaves....fruits starts immediately in your life but the only difference is that we can see the seed growing to a big tree and finally giving fruits......but in our lives we cannot see these in between process of seed of goal and target sowed in our brain till the accomplishment of achieving the goal and target......
[11:16 AM, 4/13/2019] Jiten Patel: How the Advertisement agency take advantage of our brain.....
They continuously bombard us with their products and creates an impression of their products in our brain..... continuously bombarding the products advertisement by visualisation......by sound.....by emotions......our brain develops a neuron for that advertise products..... actually if you understand the advertising agency attacks our brain and they are infact talking to our brain about their products which they want to sell to us.....they are creating an affirmation in our brain of their products so that we buy them...... and it works superbly...... Colgate.....thumps up......pidilite......etc.....

Same way why don't we market and sell our own ideas....goals..... targets to our own brain..... and continuously like the advertisement which we see regularly of coca cola.....Maruti cars.....lays chips.....bombard our own brain continuously with our goal......ideas...... targets.....
The only way you can achieve your ideas......goals..... target is first by visualising them for one minute everyday with close eyes.....
Secondly everyday talking about them so they are hammered continuously in your brain....
Lastly with positive thinking and positive emotions......

BASE RATE .......PSYCHOLOGY

Some body asked me it is a good opportunity to invest in Spicejet airlines.....
I answered him I don't invest in aviation sector.....
He insisted that the future of aviation sector looks very good.....
I said I have no clue and have no analysis to support it.....

But the analysis I have is.....
Damania airlines.....loss making
Modiluft.....loss making
Deccan airways...... absolutely bullshit......
Nepc airlines.....zero
East west......zero
Kingfisher airlines.... bankruptcy
Jet Airways.....no buyers.....

The number of airlines got busted is never ending..... and the probability ratio towards airlines going bust will always be very high......

What is the life of private airline industry in India from 1992...

Say 25 years approximately......

How many airlines started within these 25 years......how many got busted......

the probability ratio of airlines getting busted I think is the highest in the world in India within a short span of time......

[9:38 AM, 4/21/2019] Jiten Patel: Base rate fallacy......

DEFINITION of Base Rate Fallacy
Base rate fallacy, or base rate neglect, is a cognitive error whereby too little weight is placed on the base (original) rate of possibility (e.g., the probability of A given B). In behavioral finance, base rate fallacy is the tendency for people to erroneously judge the likelihood of a situation by not taking into account all relevant data. Instead, investors might focus more heavily on new information without acknowledging how this impacts original assumptions.

BREAKING DOWN Base Rate Fallacy
Two categories of information exist when determining probability in many situations. The first is general probability; the second is event-specific information, such as how many basis points the market has shifted, what percentage a company is off in its corporate earnings, or how many times a company has changed management. Investors often tend to give more weight to this event-specific information over the context of the situation, at times ignoring base rates entirely.


While often event-specific information is important in the short-term, particularly for traders or short-sellers, it can loom larger than it needs to for investors attempting to predict the long-term trajectory of a stock. For example, an investor may be trying to determine the probability that a company will outperform its peer group and emerge as an industry leader. While the base of information – the company's solid financial position, consistent growth rates, management with proven track records, and an industry with strong demand – all points to its ability to outperform, a weak earnings quarter could set investors back, making them think that this is changing the company’s course, while in fact it could simply be a small blip in its overall rise.

The base rate fallacy, also called base rate neglect or base rate bias, is a formal fallacy. If presented with related base rate information (i.e. generic, general information) and specific information (information pertaining only to a certain case), the mind tends to ignore the former and focus on the latter.

Base rate neglect is a specific form of the more general extension neglect.
[9:38 AM, 4/21/2019] Jiten Patel: The above example of aviation sector is a perfect example of Base Rate  Fallacy......
[9:59 AM, 4/21/2019] Jiten Patel: What we think AND which is good for our well being we  do just the opposite of it.....
Alcohol. ...
Drugs.....
Smoking.....
All the above rewarding stimuli are bad for our health and we even know about it but still we keep on repeating it conciously.....

Same way......

The latest entrant to the above in reference to financial stock market is Penny stocks..... stocks with chor management..... stocks with large unimaginable debts.....

So the above list becomes......
Alcohol. ...
Drugs.....
Smoking.....
Penny stocks..... (stocks with chor management..... stocks with large unimaginable debts.....)

Now the most interesting things to note is that even when we know that investing in penny and dubious stocks is very injurious to our financial health but still out of Greed we invest in such stocks and ruin the future of our family...... because the loss we incur deprives them the luxury which we can afford to give them with the same money lost by investing in such Penny and dubious stocks.......

But even after my sharing these knowledge you all are going to fall for such stocks sooner or later when the Euphoric phase arrives...... Believe me you and all for that matter will not be able to resist the temptations of making big money in euphoric times because of Greed when seeing your neighbours making lakhs and crores......

NIFTY......

[2:29 PM, 4/26/2019] Jiten Patel: Nifty EPS earnings probably from next quarter  will  start improving and will go upwards......
Actual Nifty EPS earnings for FY 2019/20 Should be between 475......500.…...

But as per  long time averages.... Nifty EPS earnings  should be @520.....

But currently still the nifty EPS earnings Spring is pressed from last 4/5 years and from next quarter onwards these spring should  release and the actual earnings from next quarter onwards probably should start going up......
[2:41 PM, 4/26/2019] Jiten Patel: Correction:

Read.....

But as per  long time averages.... Nifty EPS earnings  should be @620.....
[2:45 PM, 4/26/2019] Jiten Patel: As per my calculation for FY 2019/20.......

620EPS **21.75PE==13400......

It is my personal opinion and view only......
[2:57 PM, 4/26/2019] Jiten Patel: Personally for me if at the time of Election result...... Nifty corrects and goes to 11200 it will be a Buying opportunity and a bonanza for me to Buy stocks at lower prices......
Because as per my above analysis earnings will go up and so will nifty levels in  FY 19/20......
[3:36 PM, 4/26/2019] Jiten Patel: At current Nifty levels psychologically the investors are away from the stock market because of fear of Election result and zero conviction about the economic state of affairs currently prevailing......

So what logic and sense does it make to be invested when there is doubt and uncertainty because of election results and economy is in disarray situation......

Yes the present thinking what everyone is doing currently is totally correct and I agree with it.....

But  are we doing rational thinking.....no..... because right we we have come under the influence of  Recency Bias and our thinking is distorted because of current scenario.....
What is required here from the investors is to look at the bigger picture.....

Where is Euphoria.....
Where investors have gone mad to buy Penny stocks and subscribe IPOs ....
Is money cheaply available in the market...... value of money has gone down.....
Is inflation at sky rocket levels....
Interest rate prices are still at lower levels.....
Etc.......
[6:33 PM, 4/26/2019] Jiten Patel: Investing | Our habits, as much as our brains, drive investment decisions
Even though habits account for 40 percent of the decisions that we make, the “thinking” part of the brain does not control our habits. Understanding the auto-reflex element of habit-driven decision making is central to nailing down why some promoters consistently allocate capital better than others.
http://www.moneycontrol.com/news/business/markets/investing-our-habits-as-much-as-our-brains-drive-investment-decisions-3895241.html

NIFTY EPS AND PE MISCONCEPTION.......

[5:17 PM, 4/28/2019] Jiten Patel: Today I am going to draw your attention once again to the correlation between Nifty EPS earnings and PE for FY 2019/20......

Current Price......11700

Actual Current EPS.....400

Actual Current PE.....29:35

Current price.....11700

Long term Average EPS....620

Long term Average PE.....18:85

Now if you notice there is a huge difference between the Actual Current PE and EPS earnings ....as compared to its Long term EPS earnings and PE.....

Today the Actual current EPS is lower than its Long term Average EPS earnings......

Now you must be asking why is there so much difference.....

 

okay now let us solve these riddle......

As per today's current scenario there are 50 companies in nifty.....and these 50 companies EPS earnings contribute to form the base of nifty EPS earnings.... the average of the all these companies EPS earnings  gives us  EPS earnings of nifty.....

So.... now in current scenario out of 50 companies some are doing exceptional well and their EPS earnings are constantly going up year to year..... some companies are growing at a slower pace and their EPS earnings are also growing slowly year to year.....

But the last lot out of these 50 companies are mostly running in losses and so their contribution to Nifty EPS earnings is absolutely zero..... example banking sector....SBI.....AXIS BANK.... ICICI BANK..... BANK OF BARODA......

now the contribution of these big corporate banks to Nifty earnings is absolutely nil.....I mean Zero.....

Now just imagine within the next one year all these Banks will resolve the NPAs problem and start making huge profits.....and from lose making they will all come in to profits.....

How much EPS earnings will they start contribute to Nifty EPS earnings.....

As soon as the  corporate banks come in to profits and they start to contribute to the Nifty EPS earnings ..... The Nifty EPS earnings will Zoom and Skyrocket...... from today's mediocre levels...... and sooner or later it will catch up with its Long Term Average EPS earnings and also if the economy starts booming than the Nifty EPS earnings will go way above its long term Average EPS earnings.......

[6:13 PM, 4/28/2019] Jiten Patel: The Spring of Nifty EPS earnings from last 5/6 years is Pressed and Compressed very heavily...... Sooner or later these Nifty EPS earnings Spring will be let loose..... Imagine the velocity with which it will Bounce back and how much greater Bouncy will follow thereafter........

As per my understanding the days of Nifty EPS earnings spring getting loose are very very near......say maximum in one years time you might start experiencing it......

decision making.....psychology

 https://youtu.be/v7KQsS2kLM4

[9:10 AM, 5/1/2019] Jiten Patel: Why I told you that 98% of the Investors will not make money in stock market in the long term and so in the long term INVESTING Investors will and surely lose money....

Only few people who have developed the habit of buying low and selling high and following contrarian investing with strict discipline and patience and following a system and process will be spared from losses and they are the investors who will actually make money.....

Note the above without fundamental analysis is not possible......it is very important to know the relationship between Value and Price......

The above video explains a lot...

Correlate with Financial INVESTING

[9:21 AM, 5/1/2019] Jiten Patel: What explaination the host has given in these video is absolutely amazing and the way he has explained it superb and very simple to understand.....

Those who are smart and wise correlate his explanation and apply it to Financial INVESTING.....word to word.... and then you might be able to understand what I am trying to tell you.....

It will help you in your business also......

Why we Resist Change..... can also be understood in it......

[10:37 AM, 5/1/2019] Jiten Patel: Today I would like to write a small article on why do we keep on Repeating the same mistakes again and again.......

The reason we keep on repeating the same mistakes again and again is because we have developed some habits for that some particular stimuli through experience and we keep on repeating those habit because now the action becomes Automatic without you being conciously aware of it.....

Say for example Emotions like Danger/Fear and Reward. ...

For every particular Danger/Fear stimuli you act differently and behave differently.....

The same way it happens  when you encounter Rewards stimuli.....

But after many and continuous repetitions we develop habits for those stimuli and thereafter our behaviour and action becomes Automatic and the brain controls those behaviour and action without us even knowing about it.......

Why am I writing these article because yesterday someone came in my office and suddenly without any reference or talk he asked me few Stock market TIPs......

Aare I was taken aback and surprised because we know each other from last  so many years but we never ever spoke about Stock market.....

Now I was in dilemma because he knew that I have a good knowledge about market and he thought I will be able to give him few  Stock TIPs........

To be continued......

[11:36 PM, 5/1/2019] Jiten Patel: It’s a misconception that consciousness initiates action. Norretranders supports this when he says “Man is not primarily conscious. Man is primarily non-conscious. The idea of a conscious I as housekeeper of everything that comes in and goes out of one is an illusion”.[1]

In this paper I will explain the relationship between consciousness and unconsciousness in decision making, how priming and semiotics influence unconscious decision making processes, the role of consciousness and unconsciousness in automaticity, and how a failure to understand these concepts will result in a limited capacity to understand and manage risk.

Experiments show that consciousness’ capacity is smaller than that of unconsciousness. Unconsciousness processes 11 million bits of information per second. In contrast, consciousness processes 40 bits per second. Consciousness is limited to the amount of information it can process, meaning actions are determined by information of which we have not been consciously aware. The decision is made before we can consciously rationalise it.[2] Without unconscious processing, swift decision making would be difficult. If consciousness initiated action, it would take approximately 4 years to process information that unconsciousness could process in 10 minutes.[3]

By accepting that decision making is primarily unconscious, it’s accepted that actions and decisions can be subliminally influenced by environmental stimuli.[4] The role of priming and semiotics is critical when understanding and managing risk.

Moskowitz and Gusundheit define priming as “…the passive, subtle, and unobtrusive activation of relevant mental representations by external, environmental stimuli, such that people are not and do not become aware of the influence exerted by those stimuli”.[5] Priming occurs when stimuli is strong enough to be processed unconsciously but is too subtle to be processed consciously. The stimuli affect decision making without the individual being aware of its influence.[6]

Anything that can be picked up by the senses can potentially prime an individual and influence decision making. This includes the sights we see, the odours we smell, and the sounds we hear.[7] How we relate to the stimuli will affect the action we take. Experiments on priming have shown that the faint odour of cleaning fluid will prime subjects to perform cleaning activities[8]. In another study, college students who were primed with stereotypes of the elderly were found to walk more slowly and have a reduced memory.[9]

‘Zero harm’ and ‘safety is a choice’ primes intolerance and absolutism, diminishing the learning opportunities from risk. This can lead to a culture of underreporting of incidents, and blame and punishment for those who do get injured. Language such as ‘get the job done’ and ‘can do’ encourages shortcuts, rushing, and deviation from standard process. Organisations that understand the role of priming in decision making use language that will positively prime individuals. Words such as ‘learning’ and ‘respect’ humanise safety and stimulate a richer understanding of risk, an understanding that would be lost should the illusion of conscious and rational control over decision making be accepted.

Unconscious decision making means that everything has significance. Not only is it critical that words are carefully chosen to minimise unwanted priming, It is equally important that misinterpretations are mitigated through consideration of the target audience and method of communication. An understanding of semiotics supports the communication of risk.

Semiotics is how we give meaning to signs. We live in a world of signs and interpretations vary between individuals. Meanings are not rudimentary; we create codes and conventions to ascribe meaning. This process occurs without conscious awareness.[10] People can react to the same sign differently, depending on their culture or past experiences.[11] The word ‘apple’ could represent food, health, knowledge or technology. The way signs are presented to an individual can also influence how that sign is interpreted.

Colours unconsciously impact emotions and perceptions. Reactions can be influenced by gender, age, and ethnicity. White is attributed to weddings in western culture and to funerals in the east.[12] Selection of font can also have unconscious influence on the creation of meaning. A study found that subjects asked to follow a recipe printed with a mentally challenging font were more likely to find the task time consuming and requiring a high level of skill than those reading the less challenging font.[13]

Failure to acknowledge the role of the unconscious in communication will limit the capacity to understand and manage risk. If decision making is primarily unconscious, how does consciousness assist the decision making process?

The conscious mind is rational, logical and systematic. These attributes allow consciousness to play the role of teacher or trainer when learning how to undertake complex activities. The best way to demonstrate this is learning to drive a vehicle. When first learning to drive, we are consciously thinking about the sequence of actions that must take place. The activity is awkward, confusing and difficult. Once the learning period has concluded, the skills required to drive a vehicle become automatic, consciousness is no longer needed and unconsciousness takes control. In fact, once automaticity has been achieved, consciously thinking about an activity results in a reduction of performance and mistakes are more likely to be made.[14]

The human decision making process is primarily unconscious. The illusion of consciousness being the initiator of action is an illusion. Failure to acknowledge this can result in the belief that all risk taking is rational and only rational responses to risk will be applied, such as underreporting, punishment and control. There is no room for understanding automaticity and the influence of priming and semiotics, as these concepts do not fit into rational models of thinking. Blame and punishment are by-products of a rational approach to risk… Accepting that decision making is non rational and unconscious results in a richer understanding of risk and allows for humanising methods of risk management.

What Chanakya Niti teaches us about investing

Chanakya Niti is a profound collection of the principles Chanakya followed as well as the ideology he practised throughout his life.

A native of South India, Acharya Chanakya was a Minister at the local court of the Nanda Dynasty. During his tenure, he played a key role of a strategist, an administrator, an economist, and a shrewd politician.

He did whatever he could do to strengthen the whole kingdom. But rarely he was found in agreement with the dynasty’s ruler, Dhana Nanda.

Legend has it that he was extremely unhappy with Dhana’s strategies when it came to protecting the Kingdom from enemies. At one point, when Greeks had almost invaded the western part of India, Chanakya advised him to re-think about his defense and security policies.

Instead, he abused him terribly and kicked him out of the court. Feeling cheated and insulted, Chanakya then loosened his ponytail and vowed never to tie it until he wiped off the Nanda Dynasty of the map.

After he left the kingdom, he went on a searching spree to find the probable candidate for an ideal King. And that’s when he met a 20-year old boy, Chandragupta Maurya. He accepted him as his student and taught him the lessons of politics and war. Economics and political science. Strong administration with a bureaucratic style.

Under his mentorship, Chandragupta Maurya destroyed the Nanda Dynasty and established the Maurya Dynasty. A dynasty which went on to become ancient India’s biggest dynasty. After crowning him as the Emperor of Maurya Kingdom, he penned down his book – Chanakya Niti. A profound collection of principles he followed. The ideology he practised throughout his life. And listed below are a few of the lessons that I personally believe will help us in becoming better investors.

“He who is prepared for the future and he who plans adequately are both happy; But the fatalistic man who wholly depends on luck is ruined”

This is one basic lesson that makes so much sense to me when it comes to financial planning. The moment we cry for the very first time in the World, we are designated with dozens of life-goals instantly. Child’s Education. Retirement Planning. Ringing the Wedding Bells. Fancy Car. Big House. And probably what not.

As we grow in age, the bucket-list keeps expanding like a hot air balloon. And thus arises the need for money too. Plenty of money to accomplish plenty of goals.

But the fascination of You Only Live Once (YOLO) lifestyle pushes the financial planning off the exit door. In a company of like-minded people, we keep believing only in enjoying the present. We somehow neglect the planning of these goals in advance. How much shall we need to shell out of our pocket? How deep the inflation is going to hurt the future value of money? Hardly we pay any heed to such questions.

Only at the later stage of our lives, we realize how hard it is to save a massive amount of money on a monthly basis. Year-by-year as we continue delaying it, thousands-by-thousands the monthly amount to be saved keeps rising the ladder. The unwanted consumption lifestyle that we get accustomed to, makes it hard for us to save, invest, and build the desired corpus in a less period of time. Too tough, right?

Instead, what if we start planning about our goals the day we receive our first paycheck? What if we plan to allocate 10-20% of our monthly income towards them? What if we start taking care of our future needs a bit early? This way we can enjoy our present while preparing for the future. As a brownie point, we may never have to borrow whenever our goals approach the horizon.

“A mere trickle of the tiny drops of water can fill the pitcher; The same way we must keep on collecting knowledge, Dharma, and money”

One can consider this as an extension of the first lesson. Although planning in advance really does help, at the same time, the monthly amount that requires to be invested becomes considerably low. Well, that’s the miracle of compounding. With decades of time spared, compounding really turns a disciplined investment into a mammoth capital. However small it may be.

Consider this: The moment we receive our first paycheck, we can either consume 100% or 80% of it. The choice is truly ours. But if we allow a portion of it to build our retirement corpus, it can work wonders. The monthly investment amount to build a corpus of Rs.5 Crore turns out to be just Rs.4600. This is when we start at the age of 20.

If we delay it by 5 years and start at 25, the monthly contributions increase to 8100 per month. Plan to delay it further? Be ready to shell out Rs.14500 even at a small age of 30. If we get accustomed to living paycheck-by-paycheck and somehow get enlightened towards building a retirement fund at 45, will we find it easy to spare Rs.92000 on monthly basis? I believe most of us would say – No.

Start early. Plan goals in advance. Prefer not to live paycheck-to-paycheck. An early stage foundation of investing a tiny amount will help us reach our goals in a smooth manner. As we grow in age, these tiny contributions compound. As my friends, Amit and FI say, “Slowly. Steadily. Surely.”

“Save your wealth against future calamity. Do not say, “What what fear has a rich man of calamity?”

When riches begin to forsake one even the accumulated stock dwindles away”

A wise piece of advice by Chanakya. It’s always better to build an emergency fund before we even start to invest. A reserve that can assist us in covering 8-12 months of monthly expenses. Better to cover 2 years of financial responsibilities.

But why? Can’t we just ride the bulls, invest whatsoever we have in our bank account and pull out whenever the emergency arrives? Right?

Well, no one can predict the sentiments of the market. We may beat the index but not the emotions of the participants involved. No one knows when the bear cartel might get active. And start attacking with 100-degree power. And what if, on top of that, someone loses a high paying job? The recent turbulence in the Jet Airways has turned over 20,000 professionals jobless. The ones without an emergency reserve will surely get impacted with their daily groceries; house rent, EMIs; etc.

The need of the hour is to maintain a fund that can be converted into quick cash instantly. Savings Account. FDs. Liquid Funds. Never deploy it in lieu of multi-bagger returns. Use it only during emergencies while discarding a lavish lifestyle. A vacation to the Maldives can wait. Armani suits can wait. Royal Enfield can wait. Choose only basic necessities. And replenish the fund as soon as there is an extra surplus. Let it be our helping hand when everything else just falls apart.

A few days ago, I had shared a letter on my twitter handle. Written by Warren Buffett’s grandfather to his children, it emphasizes the importance of building cash-reserve for emergencies. A reserve that makes us avoid a situation where we are forced to liquidate our core holdings. The holdings that we buy to keep for long-term capital appreciation. This letter is just a 2-minute read but worth the time. I suggest you go through it before we jump to our next investing lesson.

"For a number of years I have made it a point to keep a reserve. I have known people who have had to sacrifice some of their holdings in order to have money that was necessary at that time. Thus, I feel that everyone should have it," he wrote.

“Learning about various disciplines is like a cow of desire. It, like her, yields in all seasons; Like a mother, it feeds you on your journey. Therefore learning is a hidden treasure.”

He always advocated reading about various disciplines. And endorsed the idea of learning. This was another aspect that I really liked about Chanakya. He never restricted himself to just one discipline. In his book, Chanakya Niti, he has written on International Trade, Ethical Morals, Guidance on Living a Happy Life, Financial Well Being, Social Stability and Politics, Administration. And what not.

Covering almost every aspect of life that one can really think of, one can get a sense of how deep his desire towards learning was. Not only he has just written about it. In fact, through his learnings from various disciplines, he helped 20-years old boy in establishing the Mauryan Empire.

Likewise, investing is a game that is less about financials and more about knowing what’s there in store for us as investors in other areas. Read. Just read. The more we learn about other sectors (pharma, automobile, IT, etc.), the more we put ourselves in a better position to find lucrative opportunities. The more we learn about human behaviour, the more we make ourselves stay ahead in the game. Expand beyond what you already know.

In a recent interview with CNBC, 95-year old billionaire Charlie Munger said, "Without lifelong learning, you’re not going to do very well. You’re not going to get very far in life. Without Warren Buffett being a learning machine — a continuous learning machine, the record would have been absolutely impossible."

Warren Buffett (below) is the 3rd richest human being on Earth. Why? Because he has pocketed 20.9% annual return from 1965-2017. How? By reading 8-10 hours every day in his office at Omaha. By widening his circle of learning, he has invested in a diverse set of companies across numerous sectors. That’s an unparalleled track record. Continuous learning really helps.