Saturday, May 23, 2009

Out of body experience

Wikipedia defines an “Out-of-body experience” (OBE or sometimes OOBE), is an experience that typically involves a sensation of floating outside of one's body and, in some cases, perceiving one's physical body from a place outside one's body.

The ability to stand away from oneself and watch ourselves and our behaviour in a particular situation.

I want to take extend this concept to a “Out of market” experience. Can we take ourselves out of the market and observe our own thoughts and behaviour at every stage of the market ?

A few months back everybody and their grandmothers were talking about a market which having jumped off the cliff was very likely to continue falling. To quote Munger “ The light at the end of the tunnel appears to be of the incoming train”.

I remember a few participants in the market talking about a bear market rally and I specifically remember Shankar Sharma doing it. His thought was that though we are in secular bear market there could be swift bear market rallies which could take the market up by nearly 50%. I was at that point wondering how do market participants behave in a bear market rally?. Wouldn’t the belief/ knowledge that it is a bear market rally curb the rally or does one tend to alter outlook when one reaches the situation?

This brings me back to my original thought of “ Out of market” experience. Can I at this stage take myself out of the exuberance that I experience right now seeing my stock go up 20% everyday and ponder?

Ponder on whether is the worst over or are we amidst a sharp bear market rally and the jump from the cliff has landed us with Alice in Wonderland.

For ppl who have had the privilege to watch Darby, Tigger & Pooh along with their children( I do with my daughter) it’s the time to move that finger to their heads and “Think Think Think”.


Rohit Chauhan said...

well thinking is always in short supply in the market ..isnt it ?


Ninad Kunder said...

Hi Rohit

You are right especially the ability to think objectively.



Nandy said...

Hi Ninad, 'Out of market experience' would be a great first step to stop gyrating your thoughts and actions along with that of the market I think. You have provided an actionable point here. The next step would be to profit from the inefficiencies & unpredicability of the market. Great long term investors who have bought low and sold high, may have probably learnt this trick first.
Incidentally, saying 'Think, Think, Think' with index finger pointed to the head has become quite a favourite with my little son. And may one of the reasons why I am thinking more these days! Ha Ha! - Nandhitha

Ninad Kunder said...

Hi Nandhitha

We tend to forget the basics and i guess occassionally watching Tigger and Pooh gets theose grey cells working:-).

Trying to sit back and do the basics again. Look at each stock and evaluate instrinsic value.



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