Some might have read .. just wish to share .. it is copied from a book ( i am still on the first few pages of that book ..basically myself is a slow learner ) that was upload by Traderji in resource section. seems worth reading..
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EXAMPLE OF SHOPKEEPER DALIP BHAI MALI: -
About ten years ago I went to a general store and asked some questions.
Shopkeeper Dalip Bhai Mali answers touched my heart. They helped me to
design my trading policy, and I found investing in the stock market like a retail
shopkeeper is a very successful policy.
The first question I asked him: “ In your retail shop do you have some
items which are not in demand and the items not sold in the last 2-3 years?” He
replied, “Sir, I have many items which have not sold since the last three years .”
( Then why we worry if our stock is not selling in 2-3 months?)
I asked him “ Are you ready to take a loss on these items if I offer you just
½ prices?
He replied “ No sir I sell these items only at a profit because one day
demand for these items may occur again. It happened so many times in the past,
and if I take the loss of these types of items, then I never make profits.”
( Remember his store item don't give him dividends, and my stock gives me
dividends because I always buy dividend paying strong companies stock.)
My third question to him:- “ Are you ready to buy more quantity of which
items that are not selling well?”
( In stock market language, the average out of the stocks when they fall)
He replied “No” and looked at me like I am the biggest fool in the world.
Now I asked him: “ What profit do you make on each item?”He replied:
“Nearly 15 % on each item that I sell.”
(Then why are we greedy about our stock returns?)
I asked again “Do you feel an emotional attachment to any profit making
item and think this is like gold, so you don't want to sell it at any price because
you think it will make you a millionaire if you hold it for a long time?”
The Shopkeeper looks at me with strangely, and in reply, he says me, “ Sir I
think you are not sleeping well, and you may require a visit to your
psychiatrist soon because no any shopkeeper in the whole world feels an
emotional attachment to any items in his shop.”
I laughed and felt sorry for asking such foolish questions and disclose to
him that I just wanted to compare my stock market business to his retail shop
business.
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