Stop Losing, Start Winning, Ashu Dutt, Diamond Books, Pp 136, Rs 150.00
HERE is a guide to the stock market, where some begin by losing money and some end up losing money, making you wish not to be in the same situation again or else find a way out of the mess. In case you are new to the stock market and taking your first steps, remember you will lose money many times like most investors and traders but gradually you’ll learn from mistakes and become a good investor/trader or else quit and move on.
In this book, the author, a legendary financial market guru and associate editor of CNBC TV18, promises to help you master how to take losses when they are still controllable. He says the beauty of the stock market is that you can decide how much you wish to lose and when you want to stop losing.
In bull markets, it is seen that novices make more money than experts and long-time investors. This gives these new investors a feeling of invincibility or a feeling that it is their intelligence that’s getting them the gains.
Making money in a ‘rising tide’ increases the chances of making you bolder and betting more and more when the tide is rising or the markets are not running up. This will lead to stagnating portfolio or losses. The end result of starting out with a bang in the market is that the performance is rarely repeated. Ashu Dutt suggests that if you are a beginner, then start with a small amount of money and set a target of a loss at 5 or 10 per cent. Take the loss when the stock falls to the level you have set for yourself. This will make the greatest experience. Small amounts of losses teach you a lesson in discipline and also to take losses when they are small.
It is the stock market that is the hub of activity markets, more because of the individual decisions of million so investors. These investors think as a group which follows a pattern and have standard reactions in situations. If you understand these reactions, habits and patterns, you can use them to trade/invest with a low level of risk. If you’ve made a wrong decision and collected stocks and if they do nothing for months or years, then get rid of them. Stocks are held as long as they deliver returns on investment.
The author tries to drill in the mind of the reader that you don’t have to buy every stock because others are buying. If you get into a stock, you don’t have to stick with it. You can leave anytime or put a limit to your loss.
The book teaches how to cut your losses and let your profits run and how losing nine out of ten times is the right thing to do. Whether you are a seasoned trader or investor or one who has lost money in the market, or just standing out in the market, this book shows the way on how to go about playing in it.
(Diamond Pocket Books (P) Ltd, X-30 Okhla Industrial Area, Phase II, New Delhi-110020; www.diamondbook.in)