What addicts realize with time is that the habit they are addicted to seems to get more expensive by the day. An experimental adrenaline rush turns into a life dose before you realize it and the more you get high on it, the more you want it.I am not talking about drugs, but something equally worse and effective. I am talking about the addiction to easy money...the easy money that an unfortunate few are lured by, until every last ounce of their energy and every penny they own is sucked by the markets. It might seem that I am exaggerating but when I talk about addicts here, I talk about the people who don't learn from their mistakes. They are ever so foolish and optimistic to gain. They start by loosing a few thousands and carry on until quite a few zeros are added to the number. Of course, in between there are a few moments of gain and glory.
Let me tell you about Arvind. He started in the markets are the age of 19 with a lucky sweep when he took back Rs 3000 in a day trade in Opto Circuits. Then it became a weekly affair and in less than 3 months he was skipping college to trade. He has in the past 1 and a half years lost close to Rs 137000 but is still adamant in trading. He says that investing for long term is a waste of money and though day trade is risky, the returns are higher and for him its worth the chance.
That's Economics of a Habit for you. It gets more expensive by the minute. A guy who is 34 today and would have started smoking 19 years back, would be paying 960% more for each cigarette today than when he started. Similarly a trader who used to trade 9 years back would lose 7 times as much as he would have lost when he started trading. The fact is that a very few people actually make money from intraday trades. I say this because I have seen a trader with over 40 years of experience lose more than Rs 20 lakhs on a good day. There are no guarantees and trading does not work on fundamentals.
4 comments:
Rahul, cool facts.
Just a piece of suggestion, when you mention those facts and figures, please link to them the article because the reader may want to read the full article.
About Me... juzz amazed to see those facts.
Anyways, Good Blogging.
Deep..
http://marketingenvironment.blogspot.com
hey,
too interesting...ya i believe this co-relates to the concept of 'Price inelasticity' in Economics. it says that those items that form a part of a consumers' habits or addiction are price inelastic. the consumer doesnt stop wanting them no matter how much dear they become.
will do that deep. thanks. the facts that this becomes a form of addiction over rides rational thinking. Its like a besic need that drives your actions. That is a very sad sign for a trader or an investor. One should always remember the Master-Slave relation. You should be in control when you trade or invest, and not the other way round.
Yes, I understand that. It is a common mistake to get excited about short term gains. Even I thought it to be good a few months back. But now have realized the basics which say that long term investment is the key in stocks.
That is Consumer Psyche for you.
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