Basic Principles of Stock Market

The foundational principles discussed in this session emphasize that success in the stock market is primarily dependent on mindset, discipline, and practical knowledge, rather than academic qualifications or theoretical expertise.

1. The Core Principles of Discipline and Mindset

• Discipline is the First Rule:
  Discipline is identified as the fundamental rule for achieving success in the stock market and life.
  A lack of discipline is a bad habit, not a lack of time.

• Focus on Process, Not Immediate Results:
  Investors should focus on whether they followed the necessary steps (understanding the business, financials, and chart patterns) before taking a trade.
  You are considered “right” if you followed the process — even if the stock goes down temporarily.
  Profit or loss doesn’t define correctness; discipline does.

• Avoid Constant Portfolio Monitoring:
  It’s unproductive to check your portfolio repeatedly if you’re neither booking a profit nor a loss.
  Instead, focus on whether the stock reached your planned target.

• Wisdom Over Intelligence:
  Stock market success requires wisdom, not just intelligence.
  Even highly intelligent people (like Einstein) have lost money in the markets.
  Degrees can guarantee a salary, but not financial freedom.

• Humility is Essential:
  Ego must be left outside the market.
  Titles like Manager, VP, or Director don’t matter here — the market humbles everyone.
  Stay grounded and open-minded.

• Sharpen Your Skills:
  Keep improving your skills, knowledge, health, and character —
  that’s how you “sharpen the axe” for long-term success.

2. Understanding Market Mechanics and the Role of Operators

• The 97% Rule:
  Around 97% of investors lose money in the market.
  The money flows from the pockets of the 97% to the successful 1–3%.
  This losing crowd includes PhDs, CAs, and MNC managers.

• Market is Not Gambling (If You Learn):
  Any activity without proper learning — whether driving or investing — is gambling.
  Once learned and practiced professionally, it’s a skill.

• Strong Hands Control the Market:
  Promoters, FIIs, DIIs, and HNIs — collectively called Strong Hands — dominate the market.
  For example, they may collectively hold 82–97% of a company’s shares.

• Price Movements Reflect Strong Hands’ Interests:
  When stock prices rise, promoters and fund managers gain in net worth or commission.
  Hence, they benefit from higher prices in the long run.

• Prices Are Temporarily Suppressed:
  Strong Hands may push prices down 25–30% to accumulate shares cheaply,
  but cannot keep them low for long — it hurts their own interests.

• Markets Can’t Stay Down Forever:
  Just as one can’t hold their breath indefinitely,
  markets can’t stay suppressed — “Strong Hands” eventually lift prices.

• Do the Opposite of the Majority:
  When 99% are selling, look to buy.
  When 99% are buying, prepare to sell.
  Contrarian thinking is often profitable.

3. Practical Steps for Success and Change

• Avoid Media and Tips:
  Successful investors avoid TV anchors and tip-based investing.
  Most anchors are not even allowed to trade in their personal accounts.

• Seek Real News:
  Authentic updates come from official company filings on NSE/BSE
  or reliable sites like screener.in.
  Remember — news is past tense, predictions are opinions.

• Money Management and Priorities:
  The 99% spend on instant pleasures — alcohol, gadgets, luxury.
  The 1% prioritize education, saving, and investing.
  Respect money; don’t waste it.

• Economic Principles vs. Market Reality:
  Academic economics and the real market often move in opposite directions (90% of the time).
  Practical understanding — like how GST or real estate trends affect business — is more valuable.

• Holistic Development: Body, Mind, and Wealth:
  True success needs balance in three areas:
  • Tan (Body): Physical fitness
  • Man (Mind/Character/Knowledge): Meditation, learning, humility
  • Dhan (Wealth): Smart investing
    Weakness in one affects the others.

• Focus on Self, Not Others:
  Don’t waste energy discussing others’ lives or achievements.
  Focus on your own growth, habits, and mindset.

• Reject Theoretical Knowledge:
  Bookish concepts won’t make you money.
  The stock market rewards practical learning and disciplined execution — not theory.

🧭 In Summary

Stock market success isn’t about IQ or degrees —
it’s about discipline, wisdom, humility, and action.
Learn, unlearn, and practice — that’s how you move from the 97% to the 3%.