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Dear Sir, This article is a reality check for many of the short term investors who gains “Moolah” in one or two transactions and loses money in the next transaction. These investors follows the crowd and takes buy or sell decisions based on his/her fear and greed. A very well-known fact is that only 5% of stock investors earns profit from the losses incurred by 95% of the stock traders. Big bulls like Harshad Mehta, Jhunjhunwalla, Sucheta falls under the category of above 5% of stock investors. Even I tried in the stock market as a short term trader and incurred heavy losses. However, what I learnt is that stock market is kind to those who invests money for long term. Long term investors don’t see companies as scrips but as a business partner. This change of mentality is very important because the moment investors believe that they have invested in businesses, they will start looking for company’s fundamentals, operating performances, management and promoters of the company. Second aspect is the financial behaviour of a trader. One needs to control his behaviour when stock market crashes or surges. Our behaviour decides whether to buy or sell a stock. We often get tempted when stock price rises and in a hurry we sell. This is what 95% of the investors do and they end up gaining a small amount or losing a large chunk of money. I totally agree with your views that we should invest in “good” shares and earn nominal returns every year. The risk is lower in this case but it is far better than investing in risky scrips. Few lessons which I learnt is that an investor should conduct fundamental stock analysis before investing in any stock. Once, the investor buys, he should think of long term association with that company. The investor should use recessions as a buying opportunity since all recessions always lead to recovery.

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