My first year in the Stock Market!

One year into the stock market, although the period seems short, it taught me worth more than that! A year ago, I started investing in the stock market. As soon as I entered the market, I got hit by euphoria, as everything was going up be it equities, cryptos, or commodities. My portfolio was in green, so I was buying like crazy. I earned more than 2-3% on my portfolio within days and I thought why people would complain about it being so hard to earn money from the stock market. My ego was so over my head that I saw the market go down from November, but I was still buying into the market. By November end, reality hit me. There was no sign of recovery, neither in stocks nor in cryptos. Although I was not overleveraged in the market, nobody likes to see their portfolio in the red. I hence put a pause on buying and started to understand what was really happening.

Until then, I had bought stock based on recommendations, without proper study nor knowing how to perform that study. With the market showing no mercy on me, this was the moment I decided to understand the market. To start, I studied how to perform business analysis and valuation. Here, I found Prof Aswath Damodaran and it was my first turning point in finance. I went through all of his videos on valuation and understood what the game is and how people play it. I kept on increasing my level. Further, I started following ace investors such as Warren Buffet, Charlie Munger, Ray Dalio, Mohnish Pabrai, Rakesh Jhunjhunwala, Saurabh Mukherjea, and many more. I finally understood the basic principles of the market.

My first fear kicked in, in February when I saw Equities were falling, Cryptos were crashing, Bonds were not stable, and Gold was falling. I genuinely felt this was the end of the financial markets. I still did not sell anything off my portfolio due to some sense of hope, but the reason for fear was my lack of understanding of why the markets were falling. Post that, I read about how inflation, liquidity, geopolitical tensions, rising commodity prices, supply chain constraints, oil and gas war, etc, play out in the markets. I can guarantee, the amount of news and articles I read in this one year will be more than the sum of what I did in the past 10 years. I understood what microeconomics is, how it affects markets, how investors take decisions, how leverage plays out, how FIIs think and work, how government/central banks try their best to keep a balance between growth and inflation, how markets react to government policies and how markets are forward-looking.

The current cycle made me mature and sensible as an investor. My ego is always in check, and I deal with markets with humility. One Charlie Munger quote hit me, he said: "You do not make money by buying or selling stocks, you do it by waiting." Now I follow the same philosophy.  I look at what the future can be and analyze businesses keeping in mind the current state of the economy.

This year I witnessed extreme emotions and it was an adventurous journey. I believe I have not even learned 1% yet and will continue on this learning path, and will take every new surprise by the market as an opportunity to learn. Until then, Ciao!