Cricket is a game of patience and the team that wins the game is the one that practices patience on and off the field. We have witnessed this in World Cup Final this year.
Learning 1: The market will beat you sometimes, even if you are the greatest investor in the world
No matter how smart you are, no matter how well you understand the market, and no matter how brilliantly you select the stocks for investment, there will be times when you will not know what is making you lose on your investments.
This shows you will not understand sometimes why things go against you despite the best stock analysis you have done.
Learning 2: Your stars may perform badly sometimes
How many times we have bought a stock of a great company but it did not perform? The answer is certainly no. The stars may also fall down sometimes.
Sachin and Sehwag, the two most accomplished batsmen were out after a small start in the World Cup final.
In fact many people switched o ff their TV and went about doing their regular work. However, things changed and the rest, as they say, is history.
Learning 3: Don't doubt once you make your decision as your selection may surprise you
Once we have decided upon a stock after due diligence on financials and annual reports, we should have faith in the company. There may be times when the returns do not seem to come soon.
However, losing patience and selling them can be a bad idea. The young ones in team India Virat Kohli and Gautam Gambhir played a great role for the third wicket.
Learning 4: Patience a big time asset. It just takes some time
Warren Buffet, Peter Lynch, Benjamin Graham are some of the names in value investing known all over the world for their patience. Back home, big bull Rakesh Jhunjhunwala is known to keep stocks for years.
Indian captain M S Dhoni is known as captain cool. His patience even on the face of adversity holds a lesson for all investors. Many investors panic when things go wrong and sell at loss only to regret later when the market bounces back and their stocks scale new highs in prices.
Learning 5: Asset allocation matters
Equity is exciting. The risk associated with it, the daily fluctuation of prices, green and red points and charts on television screen all look so inviting. The problems with these things are that they do not always perform as per your expectation.
On the other hand, bonds are dull, predictable, and low risk instruments. However, bonds deliver consistent returns every time.
Similarly in cricket, we tend to adore batsmen (equity) and don't care much about bowlers (bonds). The fact of the matter is both are important to have an optimal portfolio.
So, basically cricket and investments give good returns with great interests and a better fortune if only you keep up with the patience of both.
Source: http://www.rediff.com/getahead
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