“The cosmos is within us. We are made of star-stuff. We are a way for the universe to know itself.”
― Carl Sagan
If the physicists are searching for a law that unifies everything (read Part -1) in the universe, what about the universe that is inside us which is as complex? That needs to be decoded too. One part of existence that I want to highlight is that we are continuously creating our own reality, a result of our own actions. There are very few things we can control in this world and in that very short list is ‘our own actions’. Nothing before and nothing after.
It is difficult for the greatest of investors to determine and predict the stock markets only because it is made up of decisions made by millions of individual investors. We should not be under the illusion that we can control the outcome of our investment in the short term when we are part of a larger market. What we can control is the quality of our purchases. For instance,
- It is within our power to choose to make investments in a high-grade business than a low grade one. The instance you do this the probability of success moves up many notches.
- It is within your control not to sell in a panic when markets fall – but know that the bearishness of the market is not yours to control.
- It is within your control not to buy excessively in a bull market – while the bullishness of the market is not in your control.
You get the drift? Then why in heavens do we keep doing things that we know are not as per process? What is it that happens between ‘knowledge’ and action? It is the illusion of control. Maya, as some may say! For a solution, one can look to connecting the three dots – the dots of Thought, Word and Deed also known as the discipline of ‘trikarana suddhi’. Many times, the strategy or process to be followed is clear in our mind, but the action is not in line, leading to losses or sub-optimal performance. The discipline of making our knowledge translate to action is what makes a genius investor. The hurdles in this path are our own behavioral biases and blind-spots. Biases arise from past experiences that embed themselves in our sub-conscious, popping up under stress of decision making to influence the decision. Blind-spots are simply subjects we thought we knew but are actually ignorant of, again leading us to uninformed decisions. (Note: Our advanced assessment techniques delve into the psyche of the investor to identify these biases and, with awareness, help work around them.)
Focusing on making our thoughts, words and deed synchronous, is to put our personal grand unification theory into practice. Removing any one of these out of the equation creates a dissonance.
- The market is not in our control
- Only our actions are in our control.
- Yet we do things that we know we should not be doing
- This is what impedes us from growing wealth sustainably
- Converting knowledge to action effectively needs control of our minds and freedom from biases.
- Connect the dots of thought, word and deed to gain control.
T. Srikanth Bhagavat
Managing Director & Principal Advisor