The Hindu Business Line : Seven deadly sins of investment

A crow will conquer owl in broad daylight, so too a king who wants to crush his foes needs fitting time to fight. More than two millennia old counsel, this is, from one of the 1,330 Kurals of Tiruvalluvar. Can any work be hard in very fact, if men use fitting means in timely act, asks the poet-saint in a different couplet included in a chapter titled `Knowing the fitting time'?

There are many such nuggets of wisdom in the ancient Tamil work for aspiring investors who want to profit from the market. It is not unusual to find contemporary instructions echoing ageless guidance. Take for instance, Colin Alexander's Streetsmart Guide to Timing the Stock Market (www.tatamcgrawhill.com). "Technical analysis tells you when to buy or sell a stock on the basis of what its price action says about it," he writes.

Fundamental analysis can tell you which stocks to buy on the basis of companies' financial statements and assumptions about their business prospects. Remember, however, that fundamental analysis "does not necessarily lead you to stocks where the action is." Therefore, supplement technical analysis with fundamental analysis, because when both analyses support the same conclusions, the results are likely to be spectacular, as Alexander assures.

Timing is not about finding `absolute tops and bottoms,' because that cannot be done with acceptable consistency, clarifies the author. He'd instead suggest that you study the market action to "avoid getting caught in a serious bear market for stocks generally or get caught in an individual stock that is going down the drain."

Take personal responsibility for your investments, says Alexander. "Owning stocks is like owning a business... Few businesses do as well as they should when an absentee owner farms out management."

In a chapter on `The Winning Attitude' the author urges you to be prepared to do things to be successful. Preparation includes the challenge of guarding yourself against seven deadly sins of investment:

Impatience ("one partial cure for impatience is to look at the rate at which a long-term moving average or a long-term trendline is going up").

Fear (which can be overcome "by the repetition of acts of courage").

Greed (watch out, "greedy use of margin can double losses instead of doubling profits").

Hope (don't "fall back on hope when the technical case turns against a stock").

Pride (this can attack "investors who believe that their intelligence and personality are superior to the market or to a systematic approach to buying and selling stocks").

Carelessness (for, "it is easy to get sloppy about doing your homework").

Gambling (please note, stock market is not a substitute for Las Vegas!)

Timely read.

Overpower dissatisfaction

What if you were given a ticket that could magically start your life anew? Would you redeem it?

With these enticing questions begins Life's Golden Ticket, an inspirational tale by Brendon Burchard (www.landmarkonthenet.com).

The prologue cites Richard Bach's simple test to find whether your mission on Earth is finished: "If you're alive, it isn't." Burchard finds himself alive after a ghastly car accident, and realises how the crash was "a perfect metaphor" for his life at that point: "A journey down a dark road, a sharp turn, utter loss of control."

How familiar these phrases may be to those who play the markets!

Well, turn the pages to follow the protagonist to a park where a wizard addresses the crowd from atop a stool: "You've been raised with the question `What should I do with my life?' That question, of course, is secondary. The primary question is, `Who should I be in my life?'"

You are in the park because of a quiet dissatisfaction with yourself, the wizard tells the people assembled. "You feel there is something more inside you... Deep down, you know you are more than what society has said you are or told you to be."

There are more lessons to learn from the park, such as this one, from `the centre ring' preceding `the last ride': Many of us live our lives desperately seeking to draw attention to ourselves, writes Burchard.

"We live our lives to be noticed, accepted, and adored. We live our lives as if we were in the centre ring, as if the world should sit around applauding our every move."

Thankfully, however, "there are a small number of people in this world who live their lives to make others smile, to remind others of the magic and hope in the world, to help them discover the possibilities that live within them... "

Refreshing ride.

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