It has been a few months since the Hindenburg report caused a massive rout in Adani stocks. A lot has been written on that, and that is a conversation for another time. What was more interesting, was the analysis and forecasts that followed in every single social circle (In person as well as on Whatsapp)
“Bhai sahab, main bol raha hoon, yeh poora scam hai. Adani ka stock jaayega 500 tak” – Random whatsapp uncle # 1
“Yeh India ke khilaaf saazish hai. US cannot handle Indian companies growing. Stock waapis jaayega 4000 tak. Mujhe pataa hai” – Random whatsapp uncle # 2
The report was a one-off; a black swan event which nobody could have predicted. In the world of probability, it can be classified as a random variable. Yet, we as humans are hard wired to try and make sense of the randomness. More so, we love to predict the future, even if we’re unsure about the outcome. This usually leads to one of two outcomes:
1. If we get it right – “Maine pehle hi bola tha”
2. If we get it wrong – “Yeh market bohot volatile hai. Kabhi bhi kuch bhi ho sakta hai”
If this seems familiar, don’t worry about it too much. You’re not alone. We’re all guilty of making bold predictions which don’t work out from time to time. What you should focus on, is reducing your desire to engage in it, and focus on facts i.e the fundamentals of the company. Because in a world full of noise, the only truth is what has actually happened in the past.
Final thoughts? Let your investment decisions be taken on facts & fundamentals instead of predictions made by proclaimed experts (read: finance influencers, twitter traders). Because more often than not, they have no clue what they’re talking about. They’re just addicted to predicting.
Disclaimer: None of the above mentioned is investment advice. This is purely an educational piece. Please conduct independent research and talk to your financial advisor before investing