Idea of Stock Markets

hello ladies and gentlemen

first of all thank you so much to have

me here to address your audience on the

tedx platform

i am truly honored and the fact

that we are having a on-based online

tedx talk is just

amazing today i want to talk

on the idea of stock markets i won’t

talk about the idea

of stock markets stock

markets now when you hear these words

either you already have a notion about

them

or you have heard a notion about stock

markets today

i’m gonna address the three most common

notions

people have around stock markets the

first one

is that stock markets seems lucrative

it’s good

but i don’t have time for it the second

notion people have

is that stock markets is a gamble it’s

too risky

i don’t want to get into it and third

notion which people have

is that stock markets buddy they are too

complicated

i am not smart enough stock markets is

not for me

today i’m going to address all

of these three notions

my name is goila and i have an

experience in stock markets of 10

years and in my 10 years in stock

markets

i have read several books seen several

interviews

talked to several analysts and stock

brokers

and i know the common mistakes traders

and investors make in stock markets

which

don’t end well what i’m going to share

with you today

is not something which i’ve read from a

book

what i’m going to share with you today

is something

that over all these years i have

observed

discovered and learned

so let’s start by me sharing a story

with you and mind you

this is a real life story

this story is is of a high achieving

individual who is the ex-general manager

sales of a big private organization in

our country

yes ex-general manager sales so you can

imagine his aura he having a fancy car

given by his corporate organization he

having yes men surrounding him in his

office

there are several people there around

him to please him every second time

and he is that person who people always

to come seeking to help

right people used to come to him seeking

for help now all of us have that one

family member in our family

who’s very important and he is the high

achiever in that family

this gentleman is that now this

gentleman

retired in 2010.

now when he retired he retired with a

retirement corpus

of 80 lakhs uh what was his retirement

corpus

basically all his liquid assets his ppfs

his

fixed deposits his accounts his money in

the same accounts

all his liquid deposits were in 80 lakhs

and in 2010 the banks

were offering him interest rate of 9

per annum now as indians traditionally

we always do this

we take our entire retirement corpus put

it into the bank and we get the interest

on it

right this gentleman did that exact

same thing now he took that 80 lakhs

retirement corpus

put it into the bank on which he was

getting nine percent per annum interest

rate

so on a monthly basis he was earning 60

000 rupees

now to tell you about his family

structure he

is a family he has a family of four of a

wife and

two young adults right and again

this is not him this is just a random

picture that i’ve chosen from the

internet

now his family expenses were of

education

travel entertainment basic food expenses

all of them together his family expenses

on a monthly basis

were of 50 000 rupees again this is in

now this is where i want you to focus

see here that when he put his retirement

corpus in the bank

every month he was earning 60 000 rupees

from the bank

and his monthly expenses were only 50

000 per month

can you imagine a better situation than

this when

a person in retirement is gaining 10

000 per month nothing can be better

than this situation now 10 years fast

forward

let’s come to the present day situation

of 2020.

now here i’m going to compare the 2010

and the 2020 situation

of this gentleman itself now

first the retirement copies of 80 lakhs

shrunk to 65 lakhs why because he had to

get his two children married which

costed him about 15 lakh so he had 65

lakhs

in 2010 the bank interest he was getting

was 9 per annum

and in the year 2020 the bank interest

he’s getting

is five percent per annum i want you to

realize that

how the bank interest rates have

decreased

earlier his monthly income in 2010

was 50 000 rupees

and in 2020

his monthly income is only 27

000 rupees how did i calculate 27

000 rupees because in 2020 has he has

retirement purpose of 65 lakhs

on which he’s only getting interested of

5 per annum so on a monthly basis he

will get 27

000 rupees now like i told you earlier

earlier his family expenses were of 50

000 rupees the entire family now

in these 10 years his children like i

told you have gotten married

they have they have they have good jobs

they are self-independent so now

his only expenses are of him and his

wife

of travel health care

food expenses and do you know how much

expense he incurs on a monthly basis for

him and his wife alone in 2020

it is 61

000

61 000 now in 2020

what would you suggest him would you

tell him

to keep continue to continue eating out

of his capital

so that he has no money if there’s any

unforeseen circumstance in the future

what would you advise him

you know this gentleman came to me and

said hearts

i wanted to sponsor my grandchildren’s

education

i can’t i have to take money from my

children

it hurts

i want you to again recall this

gentleman

was the ex-general manager sales he was

the general manager

sales with a fancy car yes men

surrounding him

him being the most important family

member

and today he is financially broken

and you know he’s not only financially

broken because if a person is

financially broken

you can give him money finance can be

re-cooperated and he can stand up again

he can revive

but this gentleman got emotionally broke

he didn’t like the fact that from that

level he had come to this level

and with no fault fault of his because

he was doing the normal thing that

everyone does

and if a person is emotionally broken to

revive him back

is very difficult

what was the disastrous moment in his

life

what ruined his finances was were these

two factors

decreasing bank interest rates and

increasing inflation

if you see the past decades the bank

interest rates have decreased and

decreased and decreased

whereas the inflation in our country has

increased

most of us we keep our money in banks

either we are already facing this kind

of financial crisis

or we will face this financial crisis

that’s for certain

if you compare the banks to stock market

if you put your money in banks as of now

in 2020

you get a bank interest rate of five

percent per annum right

now on the other hand if you invest your

money in stock markets

on a simple stock market asset like a

stock market instrument like investing

in

index funds historically we have seen

that stock markets over the longer

period of investment

gives you a return of about 15 to 17

cagr 15 to 17

compared to five percent do you see the

difference

this is what the difference is

i’ll tell you another interesting thing

there are three types of people in any

economy in any economy we have three

kinds of people

in the lower bracket we have the lower

income group

then we have the middle income group

which is also known as the middle class

then we have the high income group which

is at the top of the food chain

top of every chart which is the rich

people which are the rich people

right now in every economy

these three characteristics of people

have

different qualities

now you’ll always see a person who is in

the lower income group

will keep his money in cash and he will

keep that cash

at home or either in a locker room right

he will not put it in a bank and because

of which

the lower income group people are

heavily affected by inflation

and go even down even further down

the table then comes

the category we know too well the middle

class category

now middle class people always prefer to

put their money in banks

earlier when the bank interest rates

were not decreased so much

earlier when the inflation rates were

not this high the middle class people

went through why because when they put

their money in banks at least the bank

interest rate was beating the inflation

now in the current situation and trust

me this situation will keep moving on in

this direction where the bank interest

was reduced

and the inflation increases it’s

difficult for the middle class people to

survive

and if you are in this category of

middle last people you know what i’m

talking about

then comes the rich people the high

income group people do you know

where do they keep their money swiss

banks

that’s a joke don’t take it seriously

the rich people

always put their money in stock markets

they invest their money in stock markets

that is why you will see the difference

between rich

and poor in our economy has been

constantly

increasing

stock markets is that ladder which is

the difference between rich and poor

stock markets is that ladder which will

take you to financial freedom

stock markets is that ladder which you

need to climb

so the notion that stock markets are

good but i don’t have time for it

well if you have learned anything from

the story i’ve told you

and if you learn anything from the

several such stories around the globe

investing in stock markets is essential

for you

start investing right now if you’re 18

it’s never too early if you’re 60 it’s

never too late

irrespective of your age or career

investment in

is mandatory for us not only for a

financial future

but for our emotional well-being

now the second situation

in the second situation the second

notion what people have is that stock

market is a gamble it is too risky

now i’m sure you must have heard horror

stories about stock markets right

wherein your family friends or your

family have lost a fortune

in stock markets and truth be told those

stories are true

that does happen now if stock markets

are so risky

why am i advising you to put your money

in stock markets why am i advising you

to take stock markets seriously

now there are two major reasons why

people

lose money in stock markets reason

number one

why people lose money in stock markets

now the basic principle in stock markets

is that if you want to invest for the

longer period of time the knowledge you

need is zero

but if that period of time shortens the

knowledge you need

increases let me explain okay so suppose

if i ask you

sir give me uh suggest me an investment

for 10 years what would you say you

would say hers

you can buy companies like peter light

you can invest in shares

of itc rice industries hdfc bank

why because both of us know the

probability

of these companies doing well in the

next 10 years is extremely high now on

the other hand i ask you

tell me a good investment for one one

year

tell me a good investment for one month

one week

one day tell me a good investment for

one

hour what is the level of knowledge you

need

extremely high

now the problem what people face is that

especially this happens with newcomers

in stock markets

because we see a couple of videos on the

internet we read one or two books

and we start doing short-term trades for

the thing

you need most knowledge for people start

with nothing

let me tell you it takes years of

practice patience research and study to

become a profitable short-term trader

it is not a time pass but the problem

is that people start with short-term

trades not with long-term investments

the second reason why a lot of people

lose money

is because a lot of people especially in

indian markets

they operate on tips they invest and

they trade on tips

now tips never work now let me logically

explain you

why don’t investment tips work let’s

take this case study shall we

okay now let’s take this case one now

here

as you can see in the stick figure this

is me very comfortable in my house

and in the next picture you can see my

office

now if i want to travel from my house to

my office

the distance between my house and my

office is three kilometers

if i ask you sir please advise me the

travel options

what modes of communication can i use to

go to my office

what would your device mean you would

say hers you can take a car

you can take a metro you can take a bus

you can even walk it

right fair enough now in the case

2 wherein i have to go to mumbai

i live in delhi and i want to travel to

mumbai and the distance between delhi to

mumbai

is 1413 kilometers

now what travel options would you advise

me metro

car you would advise me harsh

in this situation either you can take a

train

or board or flight right

now tell me this in case three

if i ask you i have to go somewhere but

i don’t know where

and i don’t know how long is the

distance

what travel option would you give me

would you tell me to try to buy a car

bus plane train what would you tell me

would you be in any situation of

advising me what mode of commutation

should i use

what mode of transportation should i use

nahi

why is that

because you don’t know where that end

journey where that journey ends

same situations in stock markets if

i don’t know your financial goals if i

don’t know your financial capabilities

if i don’t know your financial

liabilities your financial dreams

how can i advise you a mode of

investment on what basis

can i give you a tip not only me anyone

every person is different every person’s

needs are different

every person’s financial goal is

completely different

that is why tips don’t work

because on a general basis

if a person is giving tips he does not

know all these details

about you and because of which whatever

tips he gives

will never work for the longer period of

time

so coming to the notion that is

stock markets a gamble well if you’re

making long-term investments if you’re

indulging in long-term investments then

certainly it’s not a gamble on the other

hand

if you’re doing short-term trades

without

getting professionally trained and if

you are taking tips and you’re operating

on tips without

understanding the stock markets then

you have made stock markets into a

campbell and this is what people

end up doing it’s unfortunate but it’s

the truth

now coming to my third notion and this

is my favorite

notion what people have about stock

markets is people think

that stock markets is too complicated

her stock market’s too complicated

now i’m very fortunate because i meet a

lot of new people on a daily basis

and i always have this one question to

ask people i ask them do you invest in

stock markets

generally the answer i get is no then i

ask them why

you know what people tell me hers stock

market is too difficult

ours i’m not from commerce background i

don’t think i can understand this

harsh i’m not smart enough to crunch

those numbers

you know this industry because of the

media

books and professionals because everyone

uses such

heavy words heavy terminologies flowery

languages

people easily get scared of stock

markets but in reality

let me tell you stock markets is the

easiest thing to understand

the best things in life are always

simple and stock markets

is the simplest out of the lot

let me explain you this by an example

let’s take the case of warren buffett

now i’m sure you have heard about warren

buffett and if not then warren buffett

is one of the greatest investors of all

time now one of the best investments of

warren buffett

proved to be his investments in

coca-cola

right now he warren buffett invested in

the coca-cola company

in 1988. now in 1988 the coca-cola

company

was relatively very small to what

coca-cola is right now

now let’s logically analyze this what is

coca-cola

coke the drink of coca-cola is nothing

but aerated flavored sugar

water right aerated flavor sugar water

now on the streets of delhi you also

get a aerated flavored sugar water which

is a locally made drink in delhi

and that drink is called banta

right now just imagine if i took you

to a small company which is

manufacturing panta

and ask you sir please invest in this

company

what would you tell me have you lost it

right why because you would be doubtful

of that company’s profit

you would be doubtful of that company

sales you would be doubtful of that

company on

overall that it can ever do well am i

right

now let’s take the case of warren

buffett again when he made the iconic

decision

of wanting to invest in coca-cola he

didn’t only look at the balance sheets

he saw that people liked the taste of

coke

and he saw no reason why people

would not buy it on a larger scale and

he invest in coca-cola

if balance sheets and number crunching

was the answer to stock markets

then every commerce graduate would have

been a millionaire today

some of the biggest investments are made

on the simplest

reasons in stock markets you do not you

do not

need a high intellect all you need my

friend is common sense that’s it

it’s just pure common sense

think about this for the past 20 years

all of us knew that internet technology

is the future

and it has done great but did we invest

in it

no standing here today

you know that artificial intelligence

electrical vehicles

a renewable energy is the future are you

investing in it

no

you know all of us have these

conversations in our households

we say that i wish my grandfather had

invested in that

had not sold that had bought that look

where we would have been today

am i right or am i right

what i’m here to tell you is that

i don’t want that your grandchildren

should say this about you

i don’t want that your grandchildren

should say this about you

even today you have several

opportunities around you you have

several companies

and industries with massive potential

and you just need to choose one and what

you need for that

simple common sense that’s it that’s it

i am here to tell you is that the notion

number three which people have

stock marks is too complicated it’s not

all you need is common sense

you know this is the reason why me and

aditya my brother

both of us started training people in

stock markets because there’s such

a lack of awareness about it

let me tell you about myself i am

someone who as a kid

fell in love with stock markets my

father was always in

invest in stock markets him being a

charter accountant so i remember him

looking at the closing price of every

shelf with the magnifying glass in

economic times

i remember him taking me to the

stockbroker’s office i fell in love with

the stock markets

i am someone who after school did not

even go to college

i am not a college dropout i did not go

to college

for my love and passion for stock

markets

i am someone who has achieved financial

freedom

with stock markets

and i am here to tell you as is that

whether you want to make this your

career

or not

whether you are earning very handsomely

or not

investing in stock markets is mandatory

for you

and if i a person who did not even go to

college can reach this level

trust me you’re in a much better

position to go

even higher take stock market seriously

stock markets is the ladder between rich

and poor and i want to make sure

that you climb that ladder

thank you

you