Stock Market Regrets: Lesson from two monks

Once upon a time, two Buddhist monks were on a long journey. One was a older monk in his early 30s, the other was younger.

They were crossing a peaceful village, when they came across a river.

On the banks of the river stood a beautiful young girl.

The girl looked worried. She wanted to cross the river, but feared she would drown.

The young monk walked past, without even looking at her and crossed the river.

The older monk picked up the woman and carried her across the river. After crossing the river, he put her down and joined the younger monk to continue the journey.

As they continued to walk, the older monk noticed concern on the young monk’s face.

“What is wrong” the older monk asked.

The younger monk replied “Well, how could you carry the young girl? You know we are not allowed to touch women, it’s against our principles”

The wiser monk answered, “I left the woman on the edge of the river a long time ago. Why are you still carrying her?“

The young monk understood his mistake and silently continued the journey.

The old monk had broken the rule, but he did it to help the woman. After carrying her across the river, the purpose had been fulfilled and he ‘let go’ of his thoughts and moved on.

The younger monk didn’t touch the woman, but was carrying the woman in his thoughts. He was carrying the emotional baggage for a long time after.

Why am I telling you this story on a stock market website?

That is because the stock market is a place of endless regrets and mistakes:

• I did not buy Reliance when it went down to 900 in March 2020.
• I was lucky to buy Reliance at 1000, but I sold it too early at 1200 and the stock went to 2000.
• I sold some shares of a company today, and immediately after I sold it, the stock went up 5%.
• I researched HDFC Bank and decided that I want to buy it. However, since I wanted it at a lower price – I waited for a correction. But before I could buy it, the stock started moving up. I think it is too expensive now.
• I bought some shares of Bajaj Finance, but before I could buy enough.. the stock has doubled. Wish I could’ve given it higher allocation in my portfolio.
• When the March 2020 crash happened, I sold my shares. I regret it now.
• In the last bear market, I wanted to buy, but did not have the courage to buy. Regret.
• I did not follow the stop loss with discipline. Another regret.

If you’ve spent a few years in the stock market, you would have experienced a few or all of what has been mentioned above.

However, do understand that even the best of investors or traders, have also been through similar experiences.

The difference between those who are successful and those who are not is:

• The successful make mistakes, but learn from it.
• If they missed an opportunity in the past, they’ll make sure they grab the next one that arises.
• They understand that mistakes will happen in the future too.
• They are quick to accept a mistake and exit before the loss becomes big.
• They also understand that there will always be plenty of opportunities in the future.
• They are never in a hurry to earn quick money.
• They follow a process, instead of letting their emotions take buy or sell decisions (most new investors make the mistake of buying when market is at its peak, and selling when market has already fallen a lot).

Understand this. The stock market is a place where mistakes and regrets will be endless. Whatever happens in the market is not in anyone’s control, the future is impossible to predict.

A stock can go up a lot immediately after you sell it, or it can fall a lot immediately after you buy it. The vice versa can happen too.

The beauty of the stock market, lies in its unpredictability. The same with life itself. If you know what would happen in the future, life would be boring!

Same with sports. Watching a cricket match live is always more exciting than watching the highlights after the match. It’s exciting because it’s unpredictable. Once you can predict, it becomes boring.

Same with the market. You buy a share at 100 rupees, in the future it can go to 10,000. Who knows? Those who bought MRF shares at 100 or 1000, did not know it would be 85,000 today.

As you progress in your stock market journey, you need to ‘let go’ of the past – if you have to make better decisions in the future.

Learn from your mistakes, try not to repeat them – but like the older monk – never carry the burden of the past into the future.

What’s gone is gone. Move on.