Investment Blog

“Ismein meri expertise nahin hai. I am out.” – Namita Thapar on Shark Tank India

I highly appreciated this stance by Namita with respect to investments. She came well prepared with an investment framework in her mind where one of the main criteria was if she doesn’t understand the business well, she won’t invest in it.

Even when the idea seemed very appealing and others were getting interested, Namita stuck to her investment framework and let go of many investment opportunities. Whether those rejected opportunities prove to be good or bad is another matter.

Many successful investors follow an investment framework before making any investment. That way they can avoid making big mistakes that can impact their years of savings and gains. One of the best secrets of wealth creation is avoiding big losses. Warren Buffet described this approach as investing within the circle of competency.

In everyday life, multiple investment ideas are thrown at us. How do you decide which idea is worth investing in or not? That is the reason one must have an investment framework that helps you decide whether any idea deserves your attention or not. When you have a strong investment framework that helps you filter ideas, you end up saying NO most of the time before saying YES to only a few of the ideas.

Taking an analogy from baseball matches, Warren Buffet says that you don’t have to swing at every pitch. “The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot. And if people are yelling, ‘Swing, you bum!’, ignore them.”

Success in investment is saying more NO than YES. Your money is precious, you must guard it well.

Originally posted on LinkedIn: www.linkedin.com/sumitduseja