I saw a worker holding on to the end of a rope tied to a crane at the top of the multi-story building. On the other end was a bucket on one of the upper floors.
All that was required was to lower this bucket to the ground …. a simple process, isn’t it? All the worker has to do is hold the rope firmly so that the bucket drops to the ground safely.
As soon as the bucket was in the air… the scene was completely different. So many factors were acting on the bucket; its weight, gravity, and a worker standing on the ground trying to control it.
And the journey began.
As the bucket fell, ignoring the worker’s resistance, the worker (the investor) tried to control the bucket, but the rope (quick trades and margins) injured his hands because the bucket (the market) fell rapidly.
Does the worker leave the rope?
No. He insists on holding on to the rope (quick trades and margins) thinking that he will control the situation, and the bucket (the market) falls even faster.
The worker is lifted above the ground, raised to the first floor and the second… and still refuses to leave the rope (quick trades and margins), only because he is convinced of the idea that he can control the situation.
While the worker was soaring in the air, with several injuries, the worker realized that he was wrong and had to let go of the rope now.
Now he is in control while he is in the air. That’s what he thought at least. He wasn’t in control, and as the worker fell from the sky, between all his injuries and shock, he hit the ground, dead and still, unable to catch his breath, and with no strength to move. One idea was running through his head: the bucket (the market) behaved in the complete opposite way of what he wanted. Damn that bucket.
This is how the average investor looks when they think they can control the market. In reality, it is just a dream, because the investor hasn’t studied or set a clear investment plan that accounts for potential risks.
This is what we saw in the story. The investor keeps thinking he is in control and insists on holding on to his shares, and in the end, he gives in and sells the shares at the lowest prices and blames the bucket (the market), saying it did not behave as expected.