For individual investors who have ambitions to become market experts, my broker friend Jigneshbhai has devised a step by step approach that can be followed by almost anyone. No background in investing is necessary, but a learning attitude is important. It does not guarantee success (like market disclaimers!), but it is a sure and steady way to market expertise.
For those interested, here are the steps involved:
Step 1: Take any word in column 1 and another word in column 2 to form a cohesive set of meaningful terms. Like “Macro Environment” or “Monetary Policy”.
Step 2: Repeat step 1 to come up with two or three such cohesive meaningful terms. You can add more, but beyond two or three, it can tend to get difficult for people to believe that you are a genuine expert. So let’s say, you choose “Macro Environment” and “Global Uncertainty”.
Long-term positions buy
Short-term policy sell
Underweight environment advise
Overweight analysis hold
Structural research observe
Global uncertainty watch
Fiscal models take
Monetary markets wait for
Domestic scenarios given that
Aggressive investments if you look at
Active valuations
Passive factors
Technical institutions
Fundamental Liquidity
Foreign consolidation
Macro Basis
Cues Risk
Jigneshbhai says practice steps 1 and 2 well before moving to step 3.
Step 3: Now assuming you have mastered steps 1 and 2, add a few verbs to this term, and perhaps also a few adverbs after the term. This is actually something that cannot have copy-book instructions. Hence Jigneshbhai does not have a table for it. You will find some guidance in the column 3 above based on his experience.
So finally after adding some non-core words to your core terms, you should come up with a nice expert sentence like: “Given today’s macro environment, lack of foreign liquidity and global uncertainty, going overweight is not recommended. Though long-term valuations and structural factors are still favorable.”
Or you could come up with something like: “The market may be going through technical consolidation, and fundamental research may not hold ground. Unless global cues are favorable.”
(Expert Terms underlined above)
Caution: Step 3 is very crucial to ensure that you have the right mix here. Do not go overboard in using the terms here. There is no sure-fire formula for this and can only be mastered with creativity and experience. It is a bit like cooking. An expert cook always knows what are the right ingredients and what should be their proportions so that the dish does not get spoilt. So keep practising step 3 till you reach perfection.
Step 4: Finally, any writer can write a speech, but it takes a true expert to deliver it in all seriousness. That is what step 4 is all about. Deliver it in true seriousness, preferably with a ‘lost in thought’ look, as if you actually understand what you are saying. That is the sign of a true market expert.
PS: For those who cannot master the steps just based on the notes above, Jigneshbhai says that practical demonstrations of step 1 to 4 are available mostly 24 by 7, but certainly between 9 am and 4 pm Mon-Fri on any business channel on TV.
***
