Many a times in the market, we make rational bets in the stock market and we lose even when we are right. Stock market is a game and the system is either rigged in your favour or against you. Because the market participants are all thinking individuals, they decide the market outcomes by voting with their Naira. If a greater number of people believe in a particular outcome, they move in that direction. The force of their investment moves the market in such a way that the outcome of events in the stock market is exactly as they all anticipated.
Confused? Here's a simple example. Imagine you are home alone. You think you will be hungry in an hour so you start cooking an hour early. Nearly an hour later, the food is almost ready and the enticing aroma makes you hungry. "Yes! I knew it", you say, "I correctly predicted what time I will be hungry". But at this point, it is difficult to substantiate correctly what triggered the hunger. It could have been the aroma, your prediction, your stomach, any of them or all of them together. Point is we will never know because the only fact we can confirm is that you are now hungry.
Your hunger for profits in the stock market will push you to make smart decisions or crazy decisions. My advice is don't over think it! If everyone else anticipates the same thing you do, whether right or wrong, the market will move in your favour. Money controls the market not brains. Next time you spot an investment opportunity and you decide to latch onto it, don't think only of what you will do but also how the market will react. Because if your moves aligns with theirs, you will be singing happy tunes to the bank.
Emeka Ucheaga,
Managing Partner,
Emeka Ucheaga Advisory
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