“There is no wisdom in useless and hopeless sorrow” ~Samuel Johnson
Do you know the people to whom it is most difficult to explain to understand the advantages of long time value investing? There are some people from certain group to whom it is difficult to understand the long term value investing advantage because of their strong belief on some other methods. To realize the difficulty, find anyone who is from any of the following group and inform him the advantages and ask them to follow value investing with long term goals.
Stock traders are not investors but doing an activity which is an other form of gambling. Their ultimate goal is to make money fast within short time. Traders are the number one group whom never understand value investing and the advantages of long time investing. By their nature with intention to create huge money within no time, they never hear what a value investor saying. If they hear, they will never much importance to those words and move to their own path to hell.
Beginner InvestorsBeginners generally entering to the stock market by any advices from friends or follow someone who do similar activities. Any news they have heard on someone made money by trading, a beginner with less investing knowledge with money greed, take this as a right experience and immediately try enter to trading to follow such people. Of course, this is happening by lack of knowledge and ignorance. Some of them later realize their fault by losing huge money and stop trading activity forever. Some others try to learn value investing a later become good investors. But, majority of people struggle with lose and put more money to get their money back and thus later fall to huge debt trap from where they generally not escape. Once any beginner start getting little money from first or second trading, they generally start large scale trading with focus of being rich early. This nature finally throws them to huge debt. Anyone who started trading as a beginner and collected some money as profit in the first trading days generally falls to such trap.
Greed and fear control stock markets. Long term investors generally getting good harvesting by the greedy people associated to the stock market. Except making money as early as possible, they don’t generally have any investing policies or rules to succeed. Most funny part these people are, they generally use the word ‘investor’ to introduce them to others! In reality, they even don’t know or understand the difference between trading and investing. Due to the nature of not having patience or laziness but full of greed to be rich as early as possible, It would be difficult to understand them what really investing is.
Stock brokers are different from this category because most of them well aware what is the disadvantages of trading and advantages of long term investing. However, they openly never agree to that fact because their business only sustain if the attract more traders than investors. As frequently receiving brokerages are bread and butter, they are not only trying to make people aware about the dangers associated to trading bu also, pushing more people to that danger by hiding the fact.
Low Risk Investors
In my experience, I have found people who don’t have average risk taking capacity with their own money, never going to understand any advices on the advantages of long term value investing. They generally interested to safeguard their money with guaranteed, low return instruments like Bank Fixed deposits and time deposits. A person with lower than average risk taking capacity, is the one never hear to anyone to involve with anything where risk associated.
Explaining Long term investing is like explaining sex to a virgin
In the above context, we can easily conclude people to whom it is difficult to introduce or explain long term value investing. Those people are from the group of greed, fast money thirsty, having hidden self interests, blind followers of others and public with lack of knowledge. Never try to convert them as long term value investors. You will not succeed. The good news is, some of them later turn as right value investors but very rare.