It is not just about nervous nineties – it’s all in the mind

A brilliant piece on what goes on in the mind when one is just short of the personal milestone.

Nervous Nineties

This article is a must read for the lovers of cricket, language, statistics and psychology or any combination of the three.

It is evident from the article, even the greatest of the batsmen, save for Sir Don, have fallen in the nervous nineties. It is not that the greatest bowlers came to bowl only when the batsman reached the nineties, or that one bowled unplayable deliveries. It is just that the mind started playing games.

Cricket is not the only place where we see this. It happens in investing, too. Read the chapter “It’s all in the mind” in the book “Riding The Roller Coaster – Lessons from financial market cycles we repeatedly forget”.

 

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Crazy valuations

At the peak of the market craze in the late 1980’s, the PE ratio of the Tokyo Stock Exchange Index, TOPIX, was above 100

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Irrational markets

John Maynard Keynes is believed to have said, “Markets can remain irrational for longer than you can remain solvent”

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Investing – Mathematics or Psychology

Investing is a game of controlling one’s emotions more than the ability to perform complex Math

if in doubt, check the investing experience of Sir Isaac Newton in the chapter on “The South Sea Bubble” in “Riding The Roller Coaster – Lessons from financial market cycles we repeatedly forget”

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Experts cannot predict

The folly of forecasting:

Click on the link below to know what Udayan Mukherjee has to say about the game of predictions …

Honest confession of Udayan Mukherjee

 

Read the book “Riding The Roller Coaster – Lessons from financial market cycles we repeatedly forget” to know more about the folly of forecasting and a discussion on valuation.

 

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Even Big Ben wasn’t infallible

Going back to 1929, it is important to look at what happened to one particular gentleman and what impact it had on the whole society. Benjamin Graham was a young and upcoming investment manager and a professor. He had built good reputation as a portfolio manager and was managing a sizeable sum of clients’ money.

While he seemed to have seen the danger, he continued with his investment portfolio. At one point of time in 1929, while discussing with the legendary Bernard Baruch, young Ben Graham mentioned, “… someday, the reverse should happen.When he reflected on events some years later, Ben found it strange that though he sensed danger, he did not completely sell out of the market. (Ref: “Benjamin Graham on Value Investing – Lessons from the Dean of Wall Street” by Janet Lowe; Published by Penguin Books).

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“… this too shall pass” – Fable of King Solomon

King Solomon, feeling blue, asked his advisors to find him a ring he had once seen in a dream.

“When I feel satisfied I’m afraid that it won’t last. And when I don’t, I am afraid my sorrow will go on forever. Find me the ring that will ease my suffering.” he demanded.

Solomon sent out all of his advisors, and eventually one of them met an old jeweller who carved into a simple gold band the inscription, “this too shall pass.” When the king received his ring and read the inscription, his sorrows turned to joy and his joy to sorrows, and then both gave way to equanimity.

You see, the great King found himself unable to be content. He felt sorrow when he was happy, and sorrow when he was not, because he was unable to see his way forward. The ring served to cancel out his sorrow. By constantly having something to look forward to, he found himself content. What he previously thought was satisfaction was only a superficial feeling that was brought on by his great wealth, which was only temporary, thus his satisfaction could not last forever. True satisfaction could only be found when he recognized his wealth for what it was.

(Source: unknown)

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