Behavioural Finance Series : Mind Over Market
Ever told someone to be cautious in a booming market—and they laughed it off, only to say later, “Good thing I didn’t listen to you, bhai… My fund just doubled!”
Now imagine you’re the one giving that advice. You were right. But no one cared.
🧠 TL;DR (For the Busy Readers)
In the early 2000s, Parag Parikh warned people against blindly buying tech stocks. Nobody listened. The stocks soared—then crashed. His key insight? The market doesn’t always reward logic, but that doesn’t mean logic is wrong.
Success in investing isn’t about looking smart today. It’s about being right in the long run.
📖 The Story: Parag Parikh During the Tech Boom
Parag Parikh wasn’t just another stockbroker. He believed in value. In logic. In what he had studied in finance schools: “Buy low, sell high. Don’t chase fads.”
But in 2000, during India’s tech stock mania, people were throwing money at anything with a “.com” in its name. Stocks were doubling weekly.
He advised his clients:
“This stock is overvalued. Sell it.”
They didn’t.
Weeks later, they’d return saying,
“Glad I didn’t listen to you, Parag. The stock just doubled!”
A few months later: Tripled!
His takeaway?
📌 “I was wrong then, but in the long term, I’ll be dead right.”
And he was.
👤 Meet Suman – A Middle-Class Investor Like Us
Suman, a school teacher in Indore, had been investing ₹2,000 a month in mutual funds since 1999. During the tech boom, her bank RM convinced her to switch all her SIPs into a “hot new tech fund.”
Within 18 months, her ₹50,000 portfolio became ₹80,000. She felt like a genius.
But when the crash came, her portfolio dropped to ₹28,000.
She panicked. She stopped her SIPs.
Years later, she attended a seminar by Parag Parikh.
She restarted SIPs.
She stopped chasing returns.
She learned to stay boring.
Today, she’s retired with a ₹48 lakh mutual fund corpus—built quietly, without hype.
🧩 Takeaways for Every Indian Investor
✅ Just because something is rising doesn’t mean it’s safe.
✅ Logic may lose in the short term—but wins in the long run.
✅ SIPs are not for thrill. They’re for discipline.
✅ Be like Parag: Stick to principles even if others mock you.
🗣️ What You Can Do Today
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Open your portfolio.
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Ask: Why am I holding this fund/stock?
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If it’s “because everyone is buying it” → Think again.
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Continue your SIPs—but choose your funds like Parag Parikh would:
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With clarity, not FOMO.
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💬 Tell Us in Comments
Have you ever made (or avoided) an investment because “everyone was doing it”? What happened?
Please give feedback/edit this one first?
Next Part:
“The Enemy Is You: Behavioral Traps That Kill Your Investments”?
References
2. Video Title: Success and Failure – Lecture by Parag Parikh