Who holds wins....

Caveat: If you are already bored of finance ..dont read this blog !!

Suprisingly, BSE Sensex is about to make a move towards one more historic land-mark. Yes, the land-mark being 16000!! .. pretty amazing isnt it .... I can only imagine the euphoria in every borkers office in mumbai rite now ... the season of gujjubhai's 'Mal Laoo' has made a come back .. those mad punching of orders, those constantly ringing phones, those khaman's and dhokla's and those beer parties in the night..I am sure its not less than an unrestrained rush of emotions every trader/every investor is goin thru at the moment...

I started tracking markets from 6700 levels (it was August 2005) if I remember correctly...and in 2 years time it has zoomed to the current levels... despite 3 major setbacks mid-way the markets have made a come-back rite frm the wall, if I may say so... and amazingly its not the story of the markets alone.. its a story abt India !!, an emerging economy (if tht word still applies) which has been tranformed by its people....

There have been a lots of theories about markets...some do work actually ..others dont .. however one theory which has never been wrong (even if you factor in inflation) is the long-only investing .... You will find millions of traders who chop n churn their portfolio's .. there are millions of investment advisers who recommend trading rather than investing .. infact I, being from the alternatives side of the business, am a tactical trader as well ... for me the game is two-alpha ... and its purely a short window for me ... 3 months is an awful lot of time...

Though what I write next is contrary to what I do, fact is a fact after all.... Short horizon investing never helps ... two fundamental reasons being - firstly a normal investor doesnt have access to superior information - secondly a normal investor cant sit on his pc all day analysing how a pair is gonna perform; given the speed of convergence - its a high end thing after all ... and thts wht people like me are here for ;) .. These are people who are already fed up of life and computer screen amazes them ..so they have screens at their home as well .. they dont sleep bcuz they will miss a news flash ...

Investors who have tried acting smart have always failed ... no body ever made a fortune jus trading ... u need to invest long and thts the only fact abt the markets... I dont intend to demean traders who trade on technicals, hedge fund managers who trade on algorithms ... those guys are nerds and tht business is all together different .. they want their alpha and are happy with it... whereas a normal investor like me needs Beta+Alpha ... which is only possible in a long-only investing... Look at ne equity market in the world .. and you will find that only long-only investing has added value in the long term....

The moral of the story is if u wanna invest ..invest long term ... greed never pays !! ... Who holds always wins ... and a win be big or small its a win afterall ... To continue with Indian e.g. when I went to my brokers office this time I was in mumbai .. i saw the entire old bunch of traders missing... new traders had replaced the old ones ... suprisingly the same people who called my broker earlier still called !!


(ok the last sentence was the punch line ... ah u didnt get it?)