Bull Market Are About Earnings And Bear Market are about learnings

We are in the middle of a very choppy market. Inflation fears, war – we have seen significant declines in stock markets.?S &P 500 index has declined 9% in 2022 and the Nasdaq composite (technology-heavy index) has declined by 13.5%. I have been talking to several successful investors on my youtube channel (Building Wealth with Rajeev) and here are a few common themes coming out of the discussions.

1)???NEVER PREDICT THE MARKET: ?Almost all of these successful investors did not try to predict the market. One of the successful investors who multiplied his money 10 times over ten years (Brian Stoffel) was a strong believer in Nassim Taleb's philosophy. Nassim Taleb in his book “Fooled by randomness” and “The Black Swan” emphasizes that predicting the future is foolhardy.?It is essential to make peace with uncertainty, randomness, and volatility. Brian talked very candidly about Covid. Many investors thought that it was the end of the world and precisely at the same time, the stock market provided generational wealth to some investors. ?In the same spirit, while Russia started the war on Ukraine on 24th February 2022, NASDAQ had its best day in 2022 so far. Everybody expected stock markets to have their worst day. ??So, in nutshell, predicting the market could be like or even worse than flipping a coin.

2)???QUALITY WINS: ?The main hedge of all top investors against uncertainty was buying top-quality companies.?However, quality differed across investors by their own “Circle of competence”. Some investors had top SAAS (Software as a service company) in their portfolio and some investors had a mix of companies (from e-commerce to consumer discretionary). However, a common theme was buying companies or sectors which they understood well.?In tough times, when the market sees huge declines (many times for random reasons), your “Conviction” in stocks is the only savior

3)???POWER OF COMMUNITY:?A majority of these successful investors believed in the power of community and crowdsourcing. They attributed their success to people or investors they surrounded with. These successful investors were not arrogant about their investing success. Humility meant a lot to them. Accepting that they will be wrong many times came naturally to them. Being wrong propelled successful investors to learn more

4)???IGNORE NEWS OR CNBC:?News sells because it capitalizes on extreme human emotions of fear or greed. ?Almost all successful investors ignored the news. Some even laughed at CNBC. ?They believed in their own research rather than responding to news headlines that are meant to grab eyeballs. In their view, many of the news anchors or reporters were not investors and didn’t have skin in the game. In other words, “Listen to those who have been successful in the game you want to play”.?

?So, should one prefer a bull market or a bear market? I like both as long as the bull market lasts longer than the bear market. Both have their roles.?Bull markets help make money, but bear markets help prepare for the next bull market if one is open to learning from those.

?I Hope, embracing these learnings helps you become a better investor and a better person.

?Note: I am not a financial advisor this is not financial advice. This is for education purposes only.?For more such quality educational content, please follow my youtube channel (https://www.youtube.com/c/BuildingWealthWithRajeev/videos)