Ever wonder why top notch professional international Cricket teams never score 500 runs in a 20-20 match or 700 in a 50 overs match? Never even attempt.
Well, they know it very well that scoring that much is practically impossible. “Why?” one might argue, “after all 500 in a 20-20 match is 25 runs per over and 700 in 50 is an average of 14 per over”
Professional captains know it well that such a score is not worthwhile attempting. “You will be bowled out for a below par score if you try that”, a seasoned campaigner said, “Bowlers might ball well, wickets will fall, pitch might behave erratic, batters will play bad shots if they attempt to cross the boundary with every ball”
Why, then, many of us attempt to get exceptionally high returns from equity capital markets. Under pressure to do so, driven by greed, one opts for substandard investments, takes unwanted leverage and switches positions too often for comfort.
Like a cricket innings, our investment journey will also inevitably have its ups and downs. Government policies might be unfavourable (bad pitch) industry headwinds will occur (wind blowing, lot of swing), and companies might have a lean patch (bad form). On top of all this we might make an incorrect decision in picking the wrong players (scrips) in our team.
So, play the investment game just like cricket.
Go for a score that will have a high probability to make you win.
Expect a return that you can achieve with high probability over a period of time withstanding the volatility of ups and downs of the market.
To remain Not Out in investing, have realistic expectations regarding returns