NEW DELHI: I tend to think that cricket is the greatest thing God ever created on earth – certainly greater than sex, although sex isnt too bad either, so says Harold Pinter.
That sums up the craze and love for cricket among Indians.
Like its previous avatars, the ongoing 11th edition of IPL (Indian Premier League) has its own share of madness, adventure and excitement — even some success lessons. Let's probe more. And it will be hard to miss the striking similarities between cricket and the stock market. You would do well to judiciously use those strategies to make a killing on Dalal Street.
On a lazy Saturday, as you get ready for two high-profile battles — Kings XI Punjab versus Kolkata Knight Riders, and Delhi Daredevils vs Royal Challengers Bangalore — we bring you some useful investment tips, straight from the pitch.
Do your homework
Brokerage Angel Broking in its blog explains what a good captain typically does. He studies the ground and the pitch, judges whether it's a quick wicket or a flat wicket and accordingly, decides whether to bat or bowl. Even the team composition of batsmen and bowlers is decided based on the nature of the wicket.
This apart, he also takes into account the weather conditions… what happens if dark clouds start hovering? The captain quickly calculates what he needs to do to win under the Duckworth Lewis method and paces the innings accordingly.
As a stock market investor, your focus should be on understanding the stock, the market structure and the external factors. Like a smart IPL captain, you can succeed in the market only if you master these.
Keep moving and wait for the right opportunities
Remember the famous quote by Martin Luther King Junior? That is, if you can't fly then run, if you can't run then walk, if you can't walk then crawl, but whatever you do you have to keep moving forward. Of course, quotes like these have come as elixir for those who lack any enthusiasm or aim in life.
The same principle holds for stock market investments, too. As you have seen in many instances, in a crucial situation, the match winner doesn't go for big shots. Rather, he focuses on rotating the strike by taking one or two runs, without throwing wickets away.
That is what investors need to do. Keep working on your investment plan and strike hard when the opportunities knock at your door.
Take a break. Sometimes, you need to switch off!
Yes, we understand that it's your hard-earned money and you have every reason to lose sleep over it. But, trust us, overdoing things does no good. As Mark Manson explains in its popular self-help guide book, The Subtle Art of Not Giving a F*ck, do not try. Manson made a very crucial point when he says, sometimes when you care less about something, you do better at it.
The crux of the point is don't overthink about your investments. Take a break and then re-strategise like the IPL players take strategic timeouts to relax, de-stress and discuss new strategies about how to move forward.
Take calculated risks
A good IPL captain takes calculated risks from time to time. Opening your attack with a spinner, letting your best bowler complete his spell early, using a pinch hitter on top are all strategies that IPL captains use quite effectively.
Calculated risks have two advantages. First, it tends to confuse the Opposition and second, it helps throw in that surprise element. That is what you need to do as investors too. A straightforward indexing approach cannot make you a successful investor. When you can afford to take a risk, you must take calculated risks. That is the only way to succeed in the market, the blog explains.
Your portfolio should have a right mix
Just like an IPL team comprises a blend of good hitters, matured players, fast bowlers, spinners as well as all-rounders, your portfolio should also have a mix of right assets such as debt funds, equity funds, individual stocks and the like.
According to experts, you should not put all your eggs in one basket, but diversify your portfolio. “Diversification within a portfolio can take care of all the challenges of the marketplace,” market guru Raamdeo Agrawal said.
Its a mind game; attitude matters
Stock market is not for those who play safe all the time. Sometimes, you need to believe in your intuition, your gut feeling and just go for it. This shows your mental strength, risk-taking ability and how much you believe in yourself.
Remember, the 2007 T20 World Cup final match against Pakistan when M S Dhoni surprised everyone by asking Joginder Sharma to bowl the last over? The rest is history.
That is what investing in stock markets is all about. Build your mental strength, keep your attitude intact and you are likely to win in the long haul!