Author : Siddhartha Bhaiya

According to this industry stalwart who has consistently delivered higher-than-market returns to clients, life and the stock markets are a series of mistakes we commit, and it is from these mistakes that we learn. When asked what from the past 20 years he would change about himself, “I wouldn’t change anything because I am what I am today because of my mistakes”.

A mistake in hindsight

Every decision that you make in the markets can be considered a mistake in hindsight because stock prices change by the day. But it is such mistakes that have helped me identify the next winners. I keep telling my team that we are in the business of going wrong. I had my first 100-bagger after spending ten years in the markets because I missed quite a few 100-baggers earlier.

Failure as a forerunner to success

Nobody is born with the ability to pick up 100-baggers, neither Warren Buffett nor Rakesh Jhunjhunwala. Everyone makes mistakes. I wasn’t the brightest student in class, but I am glad that I wasn’t. Because school teaches you that failure is bad, whereas, in life, you cannot succeed without failing.

Errors of omission and commission
In the stock markets, errors of omission don’t hurt you as much as errors of commission. You might miss out on a 100-bagger, which is fine. But if you invest in a stock that goes down 100%, you have likely lost that money.

Be selective and hold on

No matter how deep your pockets are, capital is finite. At best, you can buy 15-20 stocks; you cannot buy everything that moves right. There are hundreds of companies that go up 10X-20X and you needn’t find every one of them. All you need is 4-5 stocks that go up significantly over your investment journey of 30-40 years to come out on top in the long run – even if you lose a significant amount on the rest of the stocks.

Think big

The period from 2001 to 2007 was the mother of all bull markets. My first mistake as an investor was to buy and sell quickly and book profits. In 2004, I went up to my ex-boss to tell him that with 25% returns, I had accomplished my goal for the year. He said, “Don’t limit yourself to 20-25% returns; think bigger”.

Don’t catch a falling knife

There are times to make money based on skill and times when you make money based on luck. You should be able to distinguish between the two. It is futile to try catching a falling knife.

Learn from others’ mistakes
I spend a lot of time reading the history of stock markets. If you look at the pattern of mistakes that people commit, it remains the same. Learn from other people’s mistakes. To understand more about this topic or for more interesting discussions, drop us an email at

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