A teacher from a famous business school has said words to the effect that a buyer and a seller of a stock cannot both be right at the same time. A win-win is extremely rare in stock exchange transactions. The rule that applies to most stock trades is that owners and holders see the future of an organization differently from an entity that disposes of any security.
Industrial psychology dominates the stock market. How many stock brokers, credit rating agencies, and celebrated business analysts study the workings of human minds? Every stock investor has a choice: understand and use the Jo-Hari window, or live in ignorance of what it means, and suffer continuous losses; or at least not obtain all potential gains.
Do not despair if you baulk at the thought of becoming a major in psychology at this stage of life. A simple rule can keep the chaff out of your financial portfolio: ruthless separation of fact from embellishment will keep your bag of stock fighting fit. Adjectives are like cholesterol: enjoy them in rare encounters, but a financial infarct awaits stock picks based on exaggerated evaluations and reviews. Directors who beat around the bush need their safe harbors to escape drowning.
Here are three truths that you can realize to become king of the stock market:
1. What is the value that an organization contributes to people at large?
2. Why should we continue to need the company’s product or a service in the future?
3. Is the management team responsible for a corporation lean and mean with time, physical resources, and your money?
Let us hear your thoughts below: