Experience without theory or vice versa in investment? What Nikhil Kamath chooses


Investing in the stock market is a daily learning process, regardless of experience or income. If anyone thinks they have tamed the markets and know how to make money, the market has its own way of delivering surprises or even sweet surprises. Ultimately, it is a general consensus that the market has the final say.

However, if one has to choose experience without theory or theory without experience, it is a very difficult choice. Both have their own reputations in the investment world.

Without theory, one may not be able to understand the complex web of concepts involved in investing. However, Zerodha’s co-founder said he would always choose experience without theory over theory without experience.

Speaking to Twitter, Nikhil Kamath recommended a book that explains how the smartest people on the planet came together to theorize investing in stocks and lost it all.

In a book titled “When Genius Failed: The Rise and Fall of Long-Term Capital Management”, author Roger Lowenstein captures the captivating roller coaster of Long-Term Capital Management.

Drawing on confidential internal notes and interviews with dozens of key players, Lowenstein explains not only how the fund made and lost its money, but also how the personalities of Long-Term partners, the arrogance of their mathematical certainties and Wall Street culture itself contributed to both their rise and fall.

When it was founded in 1993, Long-Term was considered the most impressive hedge fund in history. But after four years in which the company dazzled Wall Street as a lucrative $ 100 billion juggernaut, it suddenly suffered catastrophic losses that put not only Wall Street’s biggest banks at risk, but the stability of the world. financial system itself.

In his short story Afterword, Lowenstein shows that the implosion of Long-Term Capital Management should not be seen as a one-off drama, but as a model of market collapse in a time of instability – and as a red flag. that Wall Street and the government tragically ignored.

The book is available on Amazon at a price of ??450.

Nikhil Kamath says to research the product or company and completely ignore the outside noise from people, marketing, branding and advertising etc.

Kamath said it was very easy to read with a format pegged to a story with no complex equations involved.

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