The secret to making money is out in the open.
On websites like Trendlyne, you can find the stock portfolios of India’s best public market investors, starting from that of the late Rakesh Jhunjhunwala.
And since these guys are super successful, making money should be as easy as buying the stocks they own, and holding them for a few years. Then why is everyone not copying them and getting rich?
Because even when we have their stock portfolio, we don’t have their conviction. And this conviction is what makes all the difference.
Here is why:
1. Even if you know that a highly savvy investor has invested 20% of his net worth in a stock, will you have the courage to do the same?
If you are prudent — not likely. Since you are not sure, you may invest only 1 or 2% of your investment portfolio. And even if the company does well, it won’t change your fortunes.
2. Even if you do invest a significant amount in a stock, what would you do if the stock price starts falling? Someone with conviction would buy more but you would likely do the opposite.
Without conviction, you will be a rudderless ship.
3. If you don’t know what makes the company a great investment, how would you know if and when the company’s underlying performance starts deteriorating? So even if you invest, you may not know if and when to sell.
That is why what we think of as secrets are not the real secrets.
The real secret to success is conviction. And this applies to everything, not just investing.
Knowing the path is one thing. Having the conviction to walk the path is totally another.
If you want to succeed, build your conviction.
– Rajan