Gambler vs Investor
Similar actions but different frames of mind
I had an interesting conversation with a highly accomplished funds manager. He is is well known for his precision in reading high risk markets like China and Brazil, and ability to churn up to 30% returns for his clients within a short period of time.
We were comparing the gamblers and investors. According to him,
“Both gamble. But the key difference is: gamblers invest without knowing what’s the odds and possibilities; investors have clear awareness what are the possibilities they are betting on.”
The gutsy gentleman shared that he's never made it to the Dean’s List back in his university days. However, his sharp ability to spot opportunities and multiply his investors’ portfolio well exceeded his academically acclaimed peers. To this, he lauded his studious efforts in making technical analysis and forecast.
In his work, he scrutinises the fundamentals of the markets; studying all the ups and downs they had for every 7-year cycle. With that, he would identify trigger points on the respective percentiles. This allows him to act fearlessly even when markets get buoyant. His ultimate fall back - time. He will stay in the portfolio to ride off the losses should it occur.
Of course, we end the conversation in about 2 hours, with me agreeing to open an account with him. Fantastic salesman too, isn't he?
I thought there is something in this story that is worth sharing with you.
- What do you think made him fearless?
- What did you takeaway from this story?
Are you aware of what frame of mind you are in when you make a decision or take an action?
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