Tom Ripley & Investing
Recently Netflix released a show named RIPLEY (Warning: spoilers ahead).
A gripping show about a scammer who steals the identity of a wealthy person in Italy.
First clips show Tom the scammer didn't do well in New York. Later his luck struck gold when he's asked by a distant acquaintance's father to travel to Italy. The father wanted his son to come back from Italy after years of estrangement.
Long story short, every step of the way Tom made decisions which suited him best. Every time he confronted trouble with ease and a long smile. His scamming abilities are not worthy of emulation or praise in this note however his reaction to every confrontation with trouble was remarkably calm.
How does that even connect to a topic like investing? Human behavior response to crisis is always panic, flight, sell-off. Very few investors hold their responses in crises.
The show is not based on a true story, hence maybe why a fictional character like Tom does so well to mask his guilt & his dark character every time there is a brush with the law enforcement officials (opposed to mental anguish and moral dilemmas of Rodion Raskolnikov in Crime and Punishment).
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What was most surprising how Tom being a dark character with crimes on his back displayed calmness and poise. The show was fresh in my mind hence the quote but there are innumerable better examples of calmness of legendary investors starting from Warren Buffett (sitting on a cash pile of hundreds of billion of dollars and is in no rush to deploy them).
Real test is when prices are going up or down, investors can't wait to jump into or out of the market just to get rich quick. The irrational exuberance sweeps away all beginner investors and they may even take up debt to get rich.
Top lesson is to stay calm as buying opportunities come up as most of the times short-term market moves get people to sell early and deep regrets pour in.
The S&P500 market drops 14% on average every year from its high and recoups most of its gains within 2 months of that drop plus 80% of the times corrections (10% declines) do not become a bear market (20% declines). So by participating in any sell-off you will be worse-off after a few months.
Note: The views expressed here are solely my own and do not represent those of any past or present employer.
Tom Ripley's insights are always a breath of fresh air in the unpredictable world of investing. We understand the importance of staying level-headed in volatile markets. Explore our page for valuable tips and strategies to navigate the ups and downs of investing with confidence. Let's make your investment journey smoother together!