Disaster stories gets TRP: Optimism gets the Money

If you want everyone around you to be attracted to your actions, become a Disaster expert.

I sometimes watch Hindi news TV channels. These channels have a show that gives 200 (as an example) pieces of news rapidly. Guess what? Most of these 200 consist of news relating to loot, arson, rioting, arrests, some horrible accident, murder and so on.

Since most news channels offer such news shows, I assume that disaster news sells and gets TRP. Almost similar is the story with business TV.

In January 2018, the market was going up, with the Nifty moving up from 10,400 to 11,100 in less than a month. Every morning, I would be in the morning show in CNBC-TV18, asking traders to buy and be long in the Nifty. The trade was: buy at current levels and hopefully sell higher, make money. So Boring! Anchors listened respectfully, but you could sense their hearts were not in such a boring trading idea.

So much better to lose money with a great deal of drama and excitement!

Yet, optimists make the money. The people who thought tomorrow would be better, invented cars, airplanes, spacecraft, telephones, internet, x-ray machines, ECG, metro trains, washing machines, cooking gas and much more. The pessimists or the disaster man simply waited for the world to end.. Still waiting, I guess.

Traders / Investors should be filled with optimism. Tomorrow, will be better than today. If you own blue chips, you will make money in the next few years, no matter what the disaster man says.

On this, I am in very good company.

Mark Dow (a macro investor) in his blog post, link here, says: “Erring on the side of optimism is still the money trade.”

He wrote this in 2015. In 2018, I can state my conviction: those who are optimists will win big in this Modi bull market.