We Are Humans
The Social Animals We Are
We are called social animals. We learn from our surroundings. We adopt as per our surroundings.
If our neighbor is sending their child to a particular school, we get the urge to send our child to the same school, especially if that is at a higher level, like CBSE board schools or English medium schools. If they buy a car, then we get the same urge to buy a car, most preferably better than the neighbor's.
And it continues to other examples as well.
During lockdown, people had nothing to do, and the stock market was going through peak volatility and recovery from the crash. It was the most exciting thing to watch, and millions of people started diving into the stock market.
And then it became a trend in offices to ask, "Hey, which stock do you own?"
Suddenly those normal people became traders and investors. FNO trading was also at peak.
And now we get the disclaimer when we login to our broker's account: 9 out of 10 individuals lose money in trading.
9 out of 10 lose money. But which 9? The ones who started during COVID boom? The ones who followed Instagram finfluencers? The ones who bought options seeing someone's profit screenshot? The ones who were chasing money? These 9 are not random. They are the herd.
The Pattern of Blame
In the previous article, we discussed how comfortable we are in blaming things which aren't in our control, like people saying, "zameen bechne wala barbaad hota hai." We explored the logic behind that barbaadi. That was lack of knowledge and not some superstitious thing because of which people who sell their land end up losing everything.
The same happened with FNO trading in the stock market. People went all in, without any preparation, emotional management, logical decision making.
They didn't fail because of strategies, or because they didn't know the indicators or they don't understand the patterns.
You would easily find people saying, those who have tried their best:
"Mujhe pata tha aisa hoga lekin main buy nahi kar paya, darr lag raha tha" (I knew this would happen but couldn't buy, I was scared)
"Maine buy kiya tha, lekin hold nahi rakh paya" (I bought it, but couldn't hold)
"Maine buy kiya wo upar bhi gaya, but main sell nahi kar paya" (I bought, it went up too, but I couldn't sell)
The story continues... until one day, they are in huge loss, and that is when they start blaming FNO trading.
The Institutional Response
Our institutions had to step in, not to educate, but to put restrictions on FNO trading.
So, you see, we as a society aren't inclined towards learning and development, neither are the authorities and institutions making any efforts for foundational education.
And the reason is also simple: Most of us act emotionally, we are buying emotionally, and they are businesspersons or politicians, they are feeding those emotions. Rule of Demand and Supply!
The Investor's Illusion
The other section of demat account holders are investors. Their journey is also the same, the only difference is, in trading results delivery is fast. In investing, result delivery takes time!
Most of our today's professional investors follow some simple strategies: "Buy and hold for long period" "Check the ratios as per some formulas and relax for years" "Do the SIP and it will return X amount after 20 years"
Interestingly, the finance influencers are teaching them these high knowledge stuffs.
The results might or might not be same as per current expectations and calculations. And interestingly, investors are also not prepared, neither are their decisions of investing backed by anything logical. Rather they are just following the HERD!
But what could change? Do we have anything different? YES we do! As this is a long journey and requires detailed explanations, case studies, deeper analysis, we will cover these in the 3rd module.
For research purpose, analyze Japanese and Chinese markets. We will see how different markets evolved differently based on their society's approach. But first, let's understand why we're not even qualified to enter this profession...
Different Professions, Different Requirements
We have different professions, and there are different requirements of those professions. I opted for commerce in 11th class, and the result was, I couldn't apply for MBBS and IIT.
Okay, so there must be some reasons why things are this way, right? So, my question is for you: being a commerce student, why can't I apply for MBBS or IIT?
It must be related to something I needed to learn in 11th and 12th standard. If I had opted for Science, then I would be eligible for these professions.
But if we dig a little, then we will find something interesting. That is, requirements of professions:
All professions have their basic requirements, and we cannot become a doctor by learning when to give which medicine. Understanding biology is more important than this part, isn't it true?
So, here comes the question: Did we complete professional requirements or do we even know about professional requirements for traders and investors before committing serious money and to long-term investments?
Would it be possible to become a trader or investor just by learning which decision to take and when? Just constant formulas and ready-made strategies?
Career Choice Decisions and Process
Do you know why you opted for a certain stream in 11th class? Or why you opted for a certain graduation degree?
What were the factors which influenced your decision? Or was it the decision which was forced upon you? If forced, then why did people take this decision for your stream and graduation?
Was there any sort of analysis which was done to decide about your career or was it just the maths and science marks?
There are more than 250 types of courses which can be pursued after 12th, and studies show more than 93% of students opt for only 7 from 250.
Now do you believe that we as a society aren't following the herd mentality and whether the most serious and life-long decisions are taken emotionally or logically?
I am not dictating anything, I am just asking questions. And we are exploring what's happening, how it is happening, and why is it happening in this particular way.
We need to have our own set of questions, as we discussed in the first article, knowing the complete question is the very first step in development and in the journey of finding answers.
Society as a Whole
Teachers, doctors, neighbors, and everyone around us is part of this emotion-driven journey and money mindset. How can we expect different behavior from teachers, doctors, and others when their conditioning also happened the same as ours?
We are also money-minded people and so are they. Hence education is a business, hence health is a business, hence known ones and relatives take advantage of any opportunity they may get to raise some money.
Even at the lowest level now, the rickshaw pullers, vegetable sellers, auto drivers, guides, puncture waale, most people exploit the person when he is most vulnerable, because that is when we pay the most.
Charge for rickshaw during day: INR 20 In night: INR 150 or INR 200
The farmer's vegetables are selling in Mandis for INR 5 per kg, and people are buying at 40 per kg from vegetable vendors.
Are there anyone right or wrong here; Or is it that our education and upbringing is shaping the journey and society as a whole is driven by something which is not in control?
Questions: When farmers protest, what happens to agri-commodity futures? When elections approach, why do PSU stocks move? When festive season comes, why do consumer stocks rise?
Markets are not separate from society. Markets ARE society's behavior converted into numbers.
The Universal Complaint Department
It is interesting to see, most of us are ready to complain.
Muslims are complaining. Hindus are complaining. Blacks are complaining. Whites are complaining. Sikhs are complaining. Christians are complaining. Females are complaining. Males are complaining. Farmers are complaining. Consumers are complaining. Regional communities are complaining.
And above all, authorities are also in the complaining mode. The ruling party complains about the past and opposition complains about the rights and wrongs.
It might sound random, but I want to address something important here: All the complaints are with something or someone who isn't in their control.
Reason being: That is the easiest path to make peace with our difficult present.
Have you heard any group leader or members saying, we are taking responsibility that we will be better? Any farmers group, crowd, community or leaders saying we will refine our processes and will develop ourselves?
More interestingly, if they do so, would others follow?
You see, as emotional decision makers, we are very less likely to own mistakes, errors, then analyze and develop, because our brain is wired to opt for the easiest path not the best path.
And when these same complainers lose money in markets? 'Market is rigged.' 'Operators manipulated.' 'Big players hunt stop losses.' Never 'I didn't prepare.' Never 'I traded emotionally.' Never 'I followed the herd.'
The Pain of Change
At this stage, I want to share a quote I read somewhere, it was quoted as said by Gautam Buddha, while some argue that this is a fake quote, but I find it interesting:
"Parivartan kabhi peeda dayak nahi hota, parivartan ka virodh peeda dayak hota hai" (Change never causes pain, resistance to change causes pain)
This resistance to change is why people want ready-made strategies. 'Just tell me when to buy and sell.' They don't want to change their thinking. They don't want to suppress emotions. They want to remain the same person and somehow get different results. Is that possible?
The broader reason why I am sharing all these: we need to see everything with the lenses of logic and reasoning, we need to ask better questions, we need to take better decisions, we need to unlearn our conditioning, we need to develop as a whole into a professional being.
When our whole body and brain work together in the same direction as we intend to, that is the time when we achieve great results.
The Missing Professional Training
There are trainings for all professions. Trading and investing is the most advanced profession of the world, and do you know why there are no formal trainings of stock market yet?
Because people don't know how to approach it. This is my effort of redefining financial literacy, education and professionalism in trading and investing.
You as a person are going to judge companies worth thousands of crores. You are going to analyze the budgets. You are going to analyze the RBI policies. You are going to analyze data which is the result of lakhs of crores. You are going to use tech to your best interests.
Do you believe that knowing a couple of formulas or knowing a chart pattern is all it takes to compete with those who have invested their whole life in stock market?
The Real Market Understanding
As a more real example: We analyze ourselves, our journey, our surroundings, different institutions, decision making of most people, how people act and react. Overall everything adds up and makes a market.
Now, when you have the ability to analyze existing demand, you also develop the ability to analyze changes in these demands.
There was a company Zomato, now Eternal, it launched with a simple objective of organizing restaurants and food delivery. As an investor, who would have seen value in the business?
When Zomato launched, who ordered food from outside? Only bachelors, working professionals in metros. But if you understood that joint families were becoming nuclear families, that women were entering workforce, that cooking time was becoming luxury, you could see where demand would come from!
There are other companies which are going to be launched in the near future. How would you be able to see the value in their business if you don't know anything about the market in which such business operates?
Moreover, who knows there might be an entrepreneur hiding behind the social walls which we are currently uplifting and you might come up with business ideas! That can only happen when you have the analyzing abilities.
It is through analysis by which we know the market and current issues, that is, the clear and complete question. Then we work on finding the answers and that is when a business or a professional trader and investor comes into existence.
When we talk about traders, their responsibilities and actions are more skilled in real time compared to investors. Hence, broad understanding is required for them as well. We will uncover many such things in the next module, which will be the foundation of our journey.
Approaches as a Nation
We have discussed many things so far, have raised many critical questions. Now it is time to broaden our view at national level and see the direction in which we are moving as a nation.
We have the biggest manpower in the world. They are sharp, intelligent, open to growth and opportunities. But as a society we became money chasers, we praise certainty, guarantee, and celebrate salaries.
As a society, we don't promote businesses, we don't promote entrepreneurship, we don't analyze, we don't think in probabilities, and most importantly, instead of praising, we often bad-mouth businesspersons, the rich, which results in negative image development of businesses, and that businesses are BAD for us.
Ultimately, resulting in less businesses, less employment, less growth!
We celebrate Sundar Pichai becoming Google CEO, but not the entrepreneur who created 100 jobs in your city. We know Sharma ji's son's IIT rank but not Gupta ji's son who started a profitable business. What message does this send to the next generation?
There is one thing which is common for all human existence: we keep on developing and we continuously try to do better. Old businesses get replaced by new ones, old ideas get updated by new ones, we keep on advancing in technology, science, and hence it will also be true that opportunities aren't going to stop and we will always have many doors open for learning and development as it is a continuous and lifelong process.
The Emotional Suppression Requirement
When we decide to become a doctor, with that we also agree to suppress our emotions related to the human body. When we decide to become traders and investors, with that, we also agree to suppress emotions related to MONEY.
That is when you will be able to analyze with your best ability. If a doctor's hands are shaking after seeing a body on which they are going to operate, would that be a successful operation?
Same goes for you. When you are going to operate in stock market, money is what you operate on. Money that is value, visible in numbers, analyzed as data, that is, collection of numbers, which then becomes information, and that information you further analyze with several parameters.
Furthermore, as we are preparing the ground for foundation, it is also worth noting that today's traders are going to be investors tomorrow, and there are huge possibilities that you will be starting businesses as well, which ultimately will contribute to the nation's growth!
This is how professional traders and investors are trained. Neither Rakesh Jhunjhunwala nor Warren Buffett needed this education or training, because their upbringing journey supported and created the mindset and management required for traders and investors. We will discuss about them as case studies in later modules, you can note down your doubts.
Becoming an Expert
It is also worth noting that things which we are reading in these articles cannot instantly be converted to behavior or habits. Knowing something and having 'knowledge and experience' in behavior are entirely different concepts.
You know 'cut your losses.' But when your position shows -10,000, your hand freezes. Your heart says 'wait, it will recover.' You know 'let profits run.' But when you see +5,000, your mind screams 'book it before it vanishes.' This gap between knowing and doing is where 90% fail!
For the time being, we will develop ourselves little by little and day by day. In the next module, we will also discuss about daily activities, case studies, projects, which you will be required to work upon to achieve expertise in these concepts and subjects.
So that we don't just learn, but keep on developing skills and behavior as a professional!
The Foundation We've Built
The objective of this article is to let the brain wonder about what is happening with us and around us. How our brain takes instructions, how it affects decision making, how it affects satisfaction, and how discussing all these opens our curious brain to explore more perspectives and results in quality and critical thinking.
This article will shake the foundation of what we have trained the brain for decades.
Furthermore, we need to know that if we were to build a new road then the old road must be broken first. There will be chaos in the starting, and that is the only process. There is no way to instant changes or updates. It is what's universally true, and no matter how much we want to, we cannot run from this truth!
These 5 articles finally bring us a student who is thinking, who has doubts, who knows that they don't know many things, who is ready to explore, and who wants answers.
What's Next?
In the next module, we will discuss all the 15 topics mentioned in the first article of this module. In this module we prepared the ground, which is now ready to have the foundation. And after module 2 we are going to build your success skyscraper from module 3.
Key Takeaways
- Herd mentality drives 93% of career and financial decisions yet we wonder why most fail
- Professional requirements exist for every field except we ignore them for trading
- Society operates on emotional exploitation from rickshaws to hospitals, emotions determine pricing
- Everyone complains, nobody takes responsibility because blaming is easier than changing
- We celebrate job seekers, not job creators then wonder why growth is slow
- Knowledge without behavior change is entertainment not education
- Suppressing money emotions is mandatory just like doctors suppress emotions about bodies
Reflection Questions
Ask yourself honestly:
- How many of your major life decisions were truly yours versus following what others did?
- What professional requirements did you complete before putting money in markets?
- When did you last take responsibility instead of blaming circumstances?
- Can you operate on money without emotional attachment like a surgeon operates on bodies?
- Are you ready to break the old road to build the new one?
Your Herd Mentality Audit
List 10 decisions you made in the last year. Next to each, write:
- My decision
- Influenced by society
- Following someone else
Count how many were truly independent. The number might surprise you.
Module 1 Complete
You are now a different person than when you started Article 1. You have questions. You have doubts. You have curiosity.
Good. This is exactly where you need to be.
The ground is prepared. Module 2 will build the foundation. Module 3 will construct your trading success.
But remember: this is not a journey of addition. It's a journey of transformation. The caterpillar doesn't add wings. It becomes a butterfly.