I came across a post by Ensemble Capital this week which gave me a unique way to view investing. I obviously couldn’t stop myself from dissecting it and presenting you my views on the same. Investing is intrinsically a natural act of providing resources to an organism operating within an ecosystem . Investing is a form of participating in the living ecosystem in which the human race organizes itself into groups and then engages in both competitive and cooperative value generating behavior . Source: Ensemble Capital Blog Before you ask what do they mean, let’s look at what we as living organisms do. We take birth, learn about this beautiful world, get education, work to pay our bills, fulfill our responsibilities and leave the world one day. In this process just like the nature provides us with resources we as investors provide business with the resource (money $$$) we have. Similarly just like we coexist in an ecosystem along with other organisms so does a business coexisting with
“I gained because I knew this” “I had told you so” “I told you, stock X is going to double” “I knew this is going to happen, had predicted it long back correctly” What is one common thing you can sense in all the above remarks? The need to control, which stems from the need to predict and to create a narrative. Our brain is wired in a way that it needs to seek patterns in past events, analyze new information or events, and categorize them in accordance with past events. A narrative creating machine that we are, we find a correlation between the most random events which have the remotest possibility of being correlated. Let me explain, say you bought shares of Tesla. Is it suppose to obey you and rise in price because you bought it? The stock has no clue and is not even interested in knowing who bought it. Hell, it should ideally not even move just because Elon Musk tweets something. But it has moved in recent times whenever he has tweeted. Now there are two possibi