Transcription
If you've got to learn about the stock market in detail, don't try learning it just off the internet. Try learning it from the experts of that world. Mr. and Mrs. Malan have been very experienced in the world of the stock market and in making money through it.
On today's episode of the RV Show, they're training you—the beginner in the stock market, the college student, the young professional who wants to expand their skill set. Even if you're intermediate when it comes to the stock market, I'm sure that this couple's experiences and knowledge will enhance your own skills.
Before I let you slip into this episode with Mr. and Mrs. Malan, I want to announce that the RENVIR Show will be a Spotify exclusive very soon. When it happens, the audio version of the podcast will be available 48 hours before the video version on YouTube. Make sure you follow TRS on Spotify. This is just the beginning for the RENVIR Show. For now, though, enjoy this very special episode with Mr. and Mrs. Malan. You've got to polish your financial skills using the knowledge of this power couple.
Enjoy this episode of the RENVIR Show.
Mr. and Mrs. Malan, welcome to the RENVIR Show! Today, I'm just as excited as a learner. I feel this is going to be a coaching session for me. You guys are icons in the stock market. Leadership marketing—firstly, welcome here!
Thank you so much! It's been a pleasure to be on this show, and of course, we'd like to teach you something.
You are the youth icon!
I mean, yeah, I guess that's what my job entails. But again, okay, the stock market is something I didn't have knowledge about when I was in college or when I was a teenager. Now, when I understand personal finance a bit, I look back and say, "Oh damn, I wish I'd learned some stuff back then."
But maybe before we actually get into the ABCs of it—and we'll teach people a lot of what they need to know about the stock market today—I’d love to know your story. You all are the finance power couple. So, on your marriage CVs, did you all write, "I want someone who's good at finance?"
Let me start with that. I started my journey into stock trading at a very early age—at 16. I was just out of college. In fact, before that, when I was in eighth grade, during my summer break, I used to go to my dad's office. He was into textiles in Kalal, Mumbai.
But everybody was talking about the stock market because that was the period when that Harshad Mehta thing happened in 1993. Since then, I was so fascinated by the number game and the whole up and down—those ACC, Reliance, and all that. Especially thanks to that series—you must have seen it. It's so nostalgic for me to watch that because I was also part of that.
I decided I wanted to be a stock trader at that age only. After 10th grade, I told my dad I wanted to be a stock trader. Of course, you know what the answer would be at that time. But I did my trick and took admission in a college next to the stock market called KC College. I did my graduation in TYBCom, but I was more into the stock market and less into college.
Since then, I learned the tricks about markets—the ups and downs. I used to write the prices: open, high, low, close. That was the raw form of technical analysis. You would be amazed that by the time I was in TY, which was when I was 20, I made 20 lakh rupees by just trading one simple strategy. I thought I was a genius and that I was going to make crores of rupees.
Then I realized it was just a bull market and my luck. The market crashed in that dot-com bubble, and I lost that, plus I lost more money. I was already in debt. Then I realized I needed to learn. There were two parts: one was fundamental, and one was technical. So, I joined a finance MBA and started learning technicals through books and seminars. That's when my real interest started.
I decided that technical looks very simple and easy for a common man. For fundamental, you need to have a finance background. My journey started there. Between 2004 and 2007, I read almost 400 books on stock market trading and investing. My first success came in trading when the market crashed in 2008. I was able to predict it, and I did not lose money in that crash.
I realized that I could pass on this knowledge—this 12-13 years of knowledge—to someone. That's when we started our institute, Malanu. We got married in 2007.
Let's hear her story. While this tornado was going on, what happened in your life?
So, I was—by education, I have studied law. I did my company secretaryship. I got interested in law. While I was working at the UB Group at that point in time, in 2007, when the alliance came in, they were actually family friends. My parents were very keen; they are good people and stay around like family. We’ve known them for years.
But as soon as I got to know he was a trader, I thought, "I don't want to get married." I was working in a good corporate law firm. That was how it all started. Though he had an MBA in finance and was doing well, he was ultimately trading. I was someone who never traded. I didn't even know what a stock market was. My friends used to trade, but I was completely out of it.
So, I said, "No, it's not going to be possible." Then followed months of meeting each other. He would convince me how trading is not that bad and that he's not a gambler. I could just see what he was doing. Gradually, I thought, "Yes, the more I got to know him, I said he reads books, he has varied interests as well."
Only on the pretext of one thing—"Even if I have my job, I'll run the house only on that"—we got married. What happened was very interesting. I took a three-month break because by that time, I moved on to Kingfisher Airlines. We were acquiring aircraft, and it was very hectic.
Let me take a break for three months, let me settle down. While I was on a break, I used to see him read charts and do some kind of analysis. I used to tease him, "What are you reading? What are you studying?" He got very edgy and said, "Why don't you learn what I'm doing? At least you'll get to know the science of it."
That's how I got started. I did a basic program on technical analysis—how to study charts, how to analyze markets. That intrigued me further. I said, "This is something which is making a lot of sense. It's not gambling after all."
Then I studied more, did the advanced course, and started to make sense of it. That was the time when I had to go back to work. I told my boss, "This is something I have to try. I need to resign." He said, "I don't know, you can come back. It's okay, let me try this new career thing."
I took all my money savings, invested, and started trading. My journey was also filled with lots of ups and downs. But one thing was starkly different from his journey: he was there to guide me. The way he had experienced his pitfalls, I was in a much better space. I had a constant guide on what to do, what to read, what courses to go to.
So, my journey was eased out. Of course, there were a lot of ups and downs, but ultimately, I found my way here. I found that I could make the same amount of money, maybe more, but I didn't have to work full-time. I could work at my own pace.
We are travelers; we travel a lot. So, it's like you can trade from anywhere. That kind of gave us more confidence in passing on this knowledge through the institute. If someone like me can do it, who had completely no background, I'm sure a lot of others could do it as well.
We've had people—doctors, engineers, homemakers—so many of them taking this forward. I think generally trading is becoming more friendly, especially when we hear stories like this where you just guided and switched professions.
There are three things I pick up from your collective stories. The first is that both of you have lived through some intense scams. You've seen it firsthand. The second thing I picked up is that you guys are pretty made for each other. Thank you so much!
Even the energy you share is very nice. Maybe that's because I'm in a very "shadi" zone in life. When I see great marriages, it's very inspiring. How long have you all been married?
14 years.
Wow, good! You remembered that! I was testing. There are going to be more questions about this marriage aspect, maybe after the podcast. But because we're talking about the stock markets, the third thing I've really picked up from you guys is that there's science to the madness.
When you don't know much about the stock market, especially in India, our parents' generation will tell us, "It's all gambling. Don't get into it. It's an addiction." I've heard this kind of stuff growing up, and I'm sure there are kids all over the country right now who've heard similar things.
I'd love to hear the breakdown of the science. When you were giving ma'am all the dope on the stock market on your early dates, what were your first few inputs?
Now, we have broken down the whole science into four parts. Let me first tell you that there are two kinds of sciences: one is fundamental analysis, and the other is technical analysis.
Fundamental analysis is about looking at the balance sheets, the ratios, and what the company's doing—what the management is doing. This is something only a person with some finance background can do, like an MBA in finance or a CA. But not a common man.
The other part of the science is called technical analysis, which is basically just studying the graphs and the charts. You must have seen so many of them nowadays. Even you have a chart of COVID nowadays. Based on that, you see the trend is going down.
So, if I have to give you the right example for the viewers and audience, technical analysis is very simple. It does not require prior background. The best example I give is like this: let's say if somebody has chest pain and he goes to the doctor, the doctor will take an ECG, a cardiogram.
It's made up of lines. Based on that cardiogram, the doctor is going to analyze whether he has some disease or not, whether he needs medication or rest or whatever. He doesn't go into why it happened—whether it was because of drinking, sleeping, eating the wrong food, or whatever.
So, even when the stock market goes up or down, you don't look at why it is happening. There can be a thousand reasons for a stock going up or down. But if you just look at the graph, it says, "Okay, it's going up. There must be something good about it." We don't know, but the remedy is to buy.
In the same way, the doctor will say, "Okay, this is the thing. You have to remedy this. This is the medicine or this is the further test to be done or the remedy is rest." So, in that case, if the lines are going up, you buy. If the lines are going down, you sell.
It's that simple. It sometimes looks very simple to be true, but we have done it for so many years. I think it is the best way to learn markets. Nowadays, the world is so fast, and the markets are so volatile.
If you see, the long-term definition earlier was like that—it is gone. The definition of long-term has come to 12 months because you don't know what's happening after 12 months due to the dynamics of technology and the dynamics of the world markets. Nowadays, with cryptocurrencies and all those things coming up, anything can happen.
The company that was doing well 12 months back may not be there after 12 months. So, the only way to do short-term analysis is through technical analysis.
You know, a lot of people have this mindset, especially people who don't know about the stock market. They think, "Okay, I'm just going to hang on to these shares of this company." You're saying we shouldn't do that anymore at all?
Absolutely! A good company is a good company only if it makes you money. Let's say I give you an example: so many stocks we talk about, like Reliance. The most popular company was not performing at all between 2008 to 2016. For eight years, it gave you zero returns on the stock.
But we say, "Okay, it's a good company, so I'll hold on to it." Within those eight years, you could have bought some other stocks and made money, which had gone up. Then it's a rotation.
Now, if you look at it, currently, the metal stocks are going up, but they were not doing well last year. You have to know the science of it; otherwise, you are stuck with the wrong stock. You think, "Oh, the markets are at an all-time high, and my stock is not going up."
So, you need to know the trend of that and also need to know the exit of that.
Got it! So, if your goal is to make money from the stock market, you study it. If something is stagnating, don't just leave your money there. Your money is as good or as bad as lying in a bank account.
Absolutely! It's like people getting married to stocks. They cannot sell their Reliance; they cannot sell their L&Ts. It's that way—you get married to a stock, and then irrespective of the stock giving you returns or not, you're stuck with the stock for years. You feel good that you're owning it, but really, it's not generating any value for you.
We had the Zerodha founders, Nikhil and Nandan Kamath, on the show, and what they mentioned about the stock market is that you need to play it like Test Cricket compared to T20. You can't play like big gambles and all.
Great! So, coming back to you, sir, when you began trading again when you were in college, you said you made 20 lakhs and then lost all of it. I'm sure you were playing T20 cricket.
Yes! Actually, we use this example in our training. In fact, we recently came up with a program called Option Premier League, like an IPL. We said that we use all cricketing language.
Let me give you one strong example or strong analogy: you need to treat the stock market like a test match. Who's the best test cricketer in India?
Who is it?
Rahul Dravid!
So, what is the main forte of Rahul Dravid? He stands on the pitch; he doesn't lose the wicket. The idea is that most people come to the stock market wanting to make money immediately and fast, like getting rich quick.
But if you think about staying on the pitch for some time, gauge the pitch, gauge the bowler, gauge the runs, and then you make runs slowly and steadily like a test match, then you will survive.
For us, our wickets are our capital. Before you learn the magic of the stock market, you have to protect your capital—also your initial money that you're putting in.
Yes, the investment! But how do you do that?
We have to have something called—let me break down the four parts. We are talking about tools, the trade, risk management, and emotions management.
So, emotions is her department. Tools are like we use in technical analysis. There are certain tools like candlestick patterns, RSIs, indicators, and momentum. Those are the tools that tell you whether the stock is strong or weak or if it's going sideways.
Then there is a trading system. What is a trading system? It's a process. Process means, "Okay, if this happens, we buy. If this happens, we sell."
When you have a systematic approach, when you have a process-driven method, you are not taking any decision on gut feeling or instinct. It's science!
It's like you go to McDonald's and have French fries. You have French fries everywhere in the world; they taste the same. Why? Because it is process-driven. The same machine, the same kind of process.
If you have the same process in the stock market, it actually becomes boring. When money-making becomes boring in the stock market, that's when you really make money.
But most people come to the stock market for the thrill element.
Wow! Great! You want to have that ride thrill. What is the definition of thrill? When things are uncertain, you don't know how things will pan out. But if I'm following a process, then I know that after this, this happens.
After this, this happens. Either I'll make this much money, or I'll lose this much money. That's the process-driven thing we bring out.
That means it reduces some part of the emotions. I don't need to think, "Should I buy or not today?" Some people say, "Oh, I feel good today; let's buy."
It's my gut feeling today. It's just the system says buy, then buy. The system says sell, then sell. The system says book a loss, then book a loss. The system says book a profit, then book a profit.
Once you learn that, then it's just a normal day like any other business.
The third part is called risk management. Before I enter any trade, whether it's long-term, short-term, medium-term, or day trading, I need to know how much I can lose my money—how much I can go wrong on this.
That's the only thing you can control in your market. You can't control what others are doing. You can't control the profit. You can't control the market going up or down. You can only control where you buy and where you book a loss—not even the profit, just book a loss.
That's where the key is. When you book a loss, you are actually protecting your wicket.
Can you explain this further, sir?
Okay, let's do this. Let's say I buy a stock at 100 rupees. What would be your natural question coming to me next?
Is it going to go up? Is it going to go down? How much will it go up?
Right! I will say 200, and you'll be happy. "Oh, it's going to double!"
But can I guarantee 200? Can anyone guarantee 200?
Nobody!
But let's say it goes to 80 rupees. What would you do?
I'd say I want to take my money out.
Yes! Most people would say, "Okay, I'll wait. It's a temporary correction, or it's going to come up again." It's the virus thing or some other logical rationalization of the loss, and you hold on.
What happens is when you buy at 100 and when you book a loss at 80, basically, you are mentally taking a defeat.
Oh, okay!
People don't take defeat because since childhood, we have been taught that you have to stick to it and hope for the best. That hope for the best goes in the wrong direction in the stock market.
Then it goes to 50, and then you try to average out. "Let me buy more so that my average comes down." Then it goes further lower, and then you become a long-term investor.
That's how most long-term investors are produced in the market. Because you are not able to book your loss at 10 rupees, if you had booked your loss at 10 rupees, you would have saved your capital. You could go to the next trade.
But because you're stuck here, you can't go to the other trade, and your money is stuck. Your mind is stuck. That's what I mean by risk management. Before taking any single trade, you need to know the risk of it, whether it's short-term or long-term.
You mentioned averaging out. Could you explain that concept?
Okay, let me give you the best example. Right now, the big frenzy is cryptocurrency. Everybody's mad behind Bitcoin and Ethereum and all that. Now, I'm personally not in favor and don't trade cryptos because it's not regulated that much in India, and I don't understand much.
My friends are trading, and my brother's in the US, and he's also trading. It went up to 65,000. Now, some people would have bought at 65, thinking it's going to 1 lakh. Now it comes to 50,000.
Then what you do is you are averaging a loser. The market is saying you are wrong. When the market says you are wrong and you still add up to your wrong by buying more, there's no guarantee that it's going to go up from 50,000.
Then it goes to 40,000, and you buy more. In our trading psychology or the trading game, we have this thumb rule: never ever average a loser.
Got it! You don't average a loser; you average a profitable trade. Let's say it has gone from 65,000 to 75,000. I'll buy more. Even if it comes down, I'm in profit. But if it goes up, I'll make more money on two parts of my positions.
That's the part of when you, as an audience, if they're listening, they should never ever average a loser in your trade—whether it's crypto, stock, options, futures, or long-term or short-term.
But okay, again, if you're explaining this to a college student, what is averaging out? Could you explain the ABCs of averaging?
Averaging is like, let's say you buy a stock at 100 rupees—100 shares. Then it goes to 80 rupees. You buy another 100 shares, so your average becomes 90 because you bought at 80 and 100.
But your average is still above the current market price. That's why you're losing money. And if it goes further down, you lose more money.
So, what about this logic of how people say you buy when things are low and then sell when things are high? This is like a very traditional textbook stock market funda.
I would say it doesn't work at all. It's like betting. Since childhood, we have been trained to bet on the underdogs. Even in movies and cricket, let's say if you're watching an Australia and Kenya match, you'll bet that Kenya wins.
That's why we select a stock that is going down. If I make money in a stock that is going down, I'll feel good also because I bet against the odds. Let's say if I try to tell you to buy the stock that is going up, then it's a no-brainer. Everybody's buying it; everything is going up.
You feel also that, "Okay, it's going up; it's expensive." This looks cheap. Since childhood, again, we have that saving money discount sale offer. That stock was now 65, now it's 40. Let me buy it.
Then it goes to 20—further cheaper. Then I'll buy it more. So basically, if you are betting on Australia, there's a chance Australia can win you the World Cup.
Absolutely! It's a no-brainer.
Okay, so the next obvious question is that say you have 10,000 rupees. You're a college student, and your dad has said, "You take this 10,000 if you want to begin your stock market career." How do you actually begin? How can you turn 10,000 into 1 crore?
Okay, 10,000 to 1 crore is a long journey, but it's possible. It's possible with the right mindset, the right strategy, and then, of course, comes the right implementation of the strategy.
The implementation part is where most people fumble. You know what? Everybody knows how to lose weight; it's a very simple science. But most people can't do it because of whatever mindset problem you have. You have to be disciplined; you have to be determined.
Then only you can do it consistently.
So, if a youngster who's watching this is trying to build a career in the stock market or in finance, the first thing is called education. Like you become a doctor, engineer, lawyer, or chartered accountant, we spend three years to get one degree.
So how about spending one or two years to learn the stock market? It's also a profession. If you take it as a profession, it will become a profession. If you take it as a gamble, it's a gamble.
That's the first thing I would like to try to learn. Nowadays, with YouTube and Facebook, there's so much free education available about the stock market where you can learn right from the basics.
Then understand what a stock is, what finance is, what companies are, what technical is, what fundamental is, and then try to gauge it. There should not be any hurry to get into the market.
First is the education part. It's like before you get into the main cricket, you do some net practice. The net practice is about practicing behind, and then you enter the market.
With 10,000, I think you can buy stocks in equity, which are like position or long-term sectors. You can also put some money in mutual funds because there you can play based on, let's say, now pharma is doing good.
So you can select a pharma fund. Or metals are doing good; you can select a metal fund. But again, you have to educate yourself about mutual funds first and know the risk part also.
Okay, if I lose money, I'll get out here.
So what I've gauged from all of this is, again, to learn about the stock market, you do need a long learning curve, which includes experience, reading, mentorship, all that. You guys have boiled it down to these four steps.
Yes, I'm sure you have drawn out those four steps after years of experience.
Absolutely! Which brings me back to those four steps again. This is from the perspective of that kid with 10,000 rupees.
To give that kid some perspective, so that tools aspect—how did you all actually develop the tools? Is the tool a computer program? Is it some sort of mathematical formula? What is it?
Alright, so then comes to tools. Technical analysis is software now available freely on all websites. You go to investing.com or any other website, money control, and all.
If you see the chart, you must have seen that like a mountain chart. Then you convert them into something called a candlestick chart. Candlestick is like green and red—those bodies look like candles.
Each candle refers to something; it gives you some information about bulls and bears in the market. There are certain more tools like moving averages. Then there are some tools called RSI, the relative strength index, which we specialize in.
It tells you the speed of the market. Like you have a speedometer in your car, it works like a speedometer on the chart. It will tell me whether the trend is going fast or slow. Should I buy more? Should I sell? Should I exit? Should I avoid it?
That's the speedometer. These are the tools. There are hundreds of tools—hundreds and hundreds of tools.
What we learned from our coaches earlier, when I started, I was doing too many tools. Then I learned from one of the best traders in the world, Larry Williams, "Let's go deep, not broad."
As in, learn and master one tool. Our specialization is in RSI, which is a tool that tells us the trend up or down. I use it for day trading, long-term trading, options trading, and futures trading. I can use that on crypto also.
It's a tool that will tell you the speed of the market.
Got it! Right! If you want to make money or if you want to be in the right stock, you need to check the speed of the market—whether it's going up, down, or sideways. There are three trends.
So if you want to buy, you have to see a stock that is going up. Again, in that, if I go further, the charts which are seen are like a daily chart, weekly chart, and monthly chart.
If I'm a long-term investor and I look for a few months down the line, I look at a monthly chart. If I'm a short-term trader, I look at a daily chart. Okay, I want to trade for five days, so I need to see that tool on the daily chart.
That's what basically means by tools. There are many of them, but select any one of them. We have not developed this; these are done by so many people in the past. It's been there for 50-60 years.
We just have done some more improvisation of that to make it simpler. Our main forte as the Malanu Training Institute is simplicity. I learned from one of my coaches that he said this nice statement: "If you want to impress someone, make it complicated. If you want to help someone, make it simple."
So again, an average Indian thinks the stock market has high risk. Yes, and even after you use the tools, there is a risk. But that risk is minimized a lot once you learn one tool really well.
Yes! So maybe the first step before you actually spread out your 10,000 rupees is to understand what tools are available. Probably do a course like you guys have a course as well.
In fact, we'll offer one free on your channel. You can just go there and select one, and you get access to a free course that teaches you the basics of the stock market.
Why do you have lots of them? Like in terms of why do you not just have one course that says, "Okay, you go from a normal MBBS to a heart surgeon to the next level?"
You need to go to the next level. Some people just want to do it as a part-time thing. Like, "Okay, I'm having my job; I want to have a business. I just want to do part-time trading."
Some people say, "I want to switch," like she switched completely. So then we need more tools to understand options. We need to understand futures. Every instrument is different; their market movement or what we call volatility is different.
So we cannot apply the same indicator on the same tools, same instruments. We have to have a couple of few of them, and then it takes time to master them. We have a one-year program also, but we have a two-day program also.
Do you think, ma'am, that again, because you come from the psychology aspect of things, and you switched from law into this, in the same way that there are some people who are better batsmen than others, are there some traders who are better traders than others? Is there some natural talent that comes in, or can everyone become a Virat Kohli of trading?
There are some people who are better traders than others and who can invest better and take better decisions. But what separates them is not natural talent. What separates them is the work that they put into this—learning.
Because you have clearly seen, for more than 12 years, we've been coaching people into full-time trading, which means we have this one-year program that coaches them on all the four steps.
One thing that separates the two kinds of people—people who do really well and take the maximum advantage and make more money versus the people who are there but are not able to cope up, you know? They want to make money but are not able to do that.
There are two categories: one, people who really put in the hard work. They read the books we ask them to read; they do those exercises. I mean, they're fully present in the course, and they give it their 100%.
Could you guys recommend some books just for the average listener right now?
Of course! We would like to first recommend our own book. We have published a book called "Hashtag Cashtag," which has my 25 years of journey in trading, plus four tools explained in detail, plus six to eight works of the industry interviewed in that, including Ramdev Agarwal and Dr. CK Narayan.
I've been interviewed in that. That's the first book—that's our book. There are a few books I would recommend: "Technical Analysis" by John Murphy. He's a legendary author, and great stuff in simple language.
Then there's another book called "Trading for a Living" by Alexander Elder. There's one more book called "Long-Term Secrets to Short-Term Trading" by Larry Williams. And there's one super book called "Super Trader" by Dr. Van Tharp.
I think if you read these three or four books, you'll get the gist of what we are talking about and get a fair idea about the markets.
Coming back to the kid with 10,000 rupees, because I feel we didn't completely address that question. I love your knowledge, so I also want to take you on tangents. You said that with the 10,000 rupees, initially learn a little bit about mutual funds.
Mutual funds are another way to kind of reduce your risk at the same time and make money off the stock market. Would you say, like, put 3,000 to 4,000 rupees in mutual funds out of that?
Yeah, I think you can put 3,000 to 4,000 or maybe 5,000 also. Because while you're learning, equity has a chance of loss, and you'll have your fumbles and blunders also to understand.
So it's always good to make mistakes with small money. When you do those mistakes, you also consider it as learning. You are also paying some fees to the market to lose money and understand the market.
No matter how much you learn from our courses, you're going to still lose money in the market. That is your teaching fees for the market.
So 50% mutual funds and 50% equity. In equity, we'll stick to as the amount is small. You can't do futures and options, which is slightly on the higher capital requirement.
Then you can buy one share also in equity. Like you buy one share of Tata Motors or you buy one share of Tata Steel. That gives you the feel of just stepping into the water and testing the waters.
Slowly, you can build a portfolio. I again encourage—we have this youth thing coming up very soon, and we want to highlight this thing.
Youth nowadays, I see, mostly spend so much money on video games, gadgets, iPhones, and all that. The same money, if they try to put into some investment and learn this skill, that will be a great benefit. They'll have a strong foundation.
For us to teach a person who is 50 years old is a big pain because they come with so much baggage and preconceived notions about the stock market being a gamble and all that. They are not easily coachable.
Of course, I'm not saying about everybody, but it's difficult. If you coach a teenager who has a clean slate, I think it's very important and very powerful for them to put the right foundations.
You know, what for us to teach a person who is 50 years old is a big pain because they come with so much baggage and preconceived notions about the stock market being a gamble and all that. They are not easily coachable.
Of course, I'm not saying about everybody, but it's difficult. If you coach a teenager who has a clean slate, I think it's very important and very powerful for them to put the right foundations.
As he said, the right belief system has to be put into that stock market. It's not a gamble; it's a systematic approach towards trading and investing. If you do it right, you can make a lot of money.
So with that belief system, that kid has a bright future to understand and then get into the market. I believe that we have this teen success pyramid, if I can talk about that.
Three things are needed for a teenager to get successful. One of them is belief—what you believe right now is the power of the subconscious and conscious mind.
What she's talking about—the habits of investing and saving at an early age and many other habits like reading—is one number one habit of all successful people. I'm sure you are also one; we are also one.
So that habit, and on the top is the skills—learnable skills. The stock market is a learnable skill, high-income skills. If these three things are in place, then success comes.
Let's say there are so many people behind skills. "Oh, I want to learn this strategy. Teach me RSI. Teach me advanced options."
But your belief system is not right, or your habits are not right. You're not going to make money with the same strategy. As she said, some people make money, some people don't.
The strategy is the same. You're going to buy at the same level and sell at the same level. So why are most people not able to do it? Because they don't have the right belief system, which we talk about—the mindset part.
So coming back to what you—I mean, I have to break down the 10,000 rupees. You mentioned Tata Steel and one more company, Tata Motors.
I'm sure you're not recommending that people buy those stocks.
Exactly! That's what I was saying. It's not a stock recommendation. I just gave an example.
But can you explain the logic behind the example? Like why you gave these two companies versus others?
If I look at the technical part of it, when I look at the charts of Tata Motors or Tata Steel, then I go into the detail of where the monthly charts and the weekly charts are bullish right now, as they're going up—especially Tata Steel right now.
So that means I will invest in that. It doesn't mean it's going up, then it will go up forever. So I need to decide when it goes up, where I'm going to buy, and if my analysis goes wrong based on the tool and indicator, where do I book a loss?
If those two things are clear, then I will invest. Then I'll wait for it to go up. I don't need to worry about it because profit is not a problem; loss is a problem.
Like that, you identify more stocks, and this will keep changing as the market changes. Let's say six months down the line, Tata Steel comes down, starts coming down, and Infosys starts going up.
Then I have to switch from here to there. Always try riding the green waves.
Yes, absolutely! That's the best quote. You spot green waves and then think of where the next one is. You pull your money out of maybe a less steep green wave and put it on one that's more steep.
Yes! And that's what you always bet on—Australia, not Kenya.
Or the team in India.
Absolutely!
So, say the kid, again coming back to that kid's example, where he's invested in two stocks, and say...
Yeah, I was just coming there. So if, suppose, you know, if the kid is studying that this is my 5,000 rupees and these are...
How do I put it? Which stocks do I put it in?
So that's one you have to do. Suppose you are studying with RSI, for instance. What he said is, if you have which is the best stock that shows up best on RSI on discount, you have to go back and study.
Put in hours of analysis. Which is the one which is the best out of these five? So that kind of requires...
And this is why people don't get into it because it's a lot of work.
Right! It's a lot of, you know, you have to put in hours. You have to just stay active, ready to pull out your money from one place, put it in another, and you have to do the work.
You have to go and analyze and do it yourself.
So, the other thing which comes up with the stock market is the common belief that talks about easy money and quick money.
So we get so many requests that do you have an advisory service? Like there are so many advisories that just send you a message, "Buy this and sell that."
So we said we don't do advisories. We teach you. Once you learn, you can do it for the rest of your life. We are giving you the fishing net, not the fish.
But most people refrain because it requires that kind of work, what she's talking about. In that work, you'll fumble and lose money, right?
But then you learn that skill for a lifelong. It's one lifelong skill you can get. The stock market never gets shut. Even in the pandemic, not a single day was the stock market shut.
It's the only online income you can do completely online—learn online, trade online, make money online. Thanks to this pandemic, so many people have woken up to the stock market thing because it is online.
You must be seeing so many ads coming up on channels and TV about markets. But the problem is right now, the markets are going up, and everybody's buying.
It's like what happened to me in 1995-96. The markets were going up; I was buying, and I made money. I thought I was a genius, only to realize when it crashed that I'm not a genius; it was my luck.
The same thing will happen. It is a cycle. The market goes up and then goes down. When it goes down, if you can put a stop loss or you can exit and you can make money, then you are an expert.
Otherwise, in a bull market, everybody makes money.
Does history repeat itself in the stock market?
I would say absolutely yes, but not exactly in the same fashion. If you see the crashes that have happened in the past—1992, the 2001 bubble, the 2008 subprime crisis, or 2020, the COVID crisis—the reasons are different.
But the market did crash for some reason or the other. In that crash, how you can protect your wicket, which is your capital, that's where the key is.
Right! So again, I'm going to boil down some of this information from an amateur perspective. This is combining some of the stuff that the Kad Brothers also told me with what I've learned through you guys.
Initially, you put in a lot of work to study, to learn, to do courses, and become very equipped. Like, you know, go to your gym—go to your mind gym for the stock market.
Yes! When you're actually beginning to trade, you reduce your risk a little bit by putting some money in your mutual funds or what people call low-risk options.
Then, that money that's remaining, you put it in the stock market in tiny, tiny amounts.
Yes! And through those tiny amounts, you'll get some sort of learning. You'll understand how things work. You shouldn't look to make money initially; you should look towards making mistakes and quickly learning from those mistakes.
Absolutely!
Would you add anything else to this strategy?
Okay, and one more thing I would like to add is give some time to yourself. Give a horizon to yourself, like, "I want to be an expert in the stock market in the next one or two years."
It should be a one or two-year timeline minimum. It can take longer also, but if you think from... Don't think that I'm going to—of course, we may do a two-day program or a three-day workshop, but that doesn't mean you start from the fourth day and start making money.
So I'd like to add one thing: like you said, give time with a sense of belief that I'll be able to do it.
Absolutely! That's the most important part. That's her job—to put that belief in your mind that, "Okay, you can do it."
When we do this workshop, it's less of technical and less of strategies. It's more of the mindset. First, believe that, "Okay, it's possible. It's a scientific way to make money, and you can do it. It's a learnable skill."
If you sustain for a period of time, you will make money. That kind of belief system gets into your head, then the strategy will work.
Hey guys, so that was part one of our conversation with Mr. and Mrs. Malan. That was all the basics. In part two, we take on your questions from Twitter. We take on slightly advanced concepts when it comes to the stock market, and we talk a little more in detail about making money through cryptocurrencies versus making money through traditional means like the stock market.
Look out for part two!