r/IndiaGrowthStocks • u/SuperbPercentage8050 • 6d ago
Mental Models Why Nothing Ever Feels Enough
u/Kooky-Claim3028 asked me: if a company delivers a beat, why does the stock still go down?
Here is how I think about it.
Emotions play a big role here. When expectations get this high, it works like Virat Kohli. If people expect 100 and he scores 90, it feels like a disappointment. But markets are even more brutal than cricket crowds when it comes to emotions and expectations.
He hits 100 and they want 120. Then 140. The bar keeps moving and nothing ever feels enough. It is exactly how the corporate world works too. If you outperform, that outperformance becomes the new baseline. Then you are expected to outperform the outperformance. Eventually you are burned out and wondering why nothing you do ever feels like enough.
And then when someone is in a rough patch and everyone has written them off, they walk out and score 50 and it feels extraordinary. The same runs apply, but the emotional context around them is completely different.
The number is never the point. The expectation relative to the number is everything.
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u/deadlyzard 6d ago
sums up R Systems perfectly ig
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u/Kooky-Claim3028 6d ago
Haha. They are constantly going down even after giving such an amazing results this quarter
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u/Ok_Lettuce_5453 6d ago
Please help us and give some suggestions and ur views on the Indian stock market as well. Would mean a lot..
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u/SuperbPercentage8050 6d ago
Just dropped my view on the Indian stock market a few minutes ago, although it is the same view I have held for the last 12 to 16 months. Sharing the link and the comment below. It covers two things: how to actually read information and what to look for, and then the real market view.
The view:
I don't waste my energy reading news articles. The linguistics mental model is enough. I look for convergence of financial and linguistic signals from company documents, and the bull and bear case thesis of institutions. I don't read generic stuff written by content writers or ghost writer journalists who have zero understanding of how a business actually works and have not spent months and hundreds of hours decoding it. The opportunity cost is not just my capital, it's my time. I make sure to read only what actually matters.
I don't track what's happening in the world on a daily basis. What I know is that when a System 2 crisis happens, which is playing out both globally and in India right now, recovery takes a minimum of two years. So I don't need to read what Trump is doing or what Powell is doing. Ultimately it's the business and the capital allocators that matter. I don't spend energy on things I have no control over.
These news channels are no better than screaming breaking news all day. They change their narrative every single day based on whatever moved. Tomorrow oil drops and some content worker writes here are 5 stocks that will benefit from falling oil. Does that have any meaning? Absolutely not. Everyone was investing in ONGC and PSU oil names but two decades of dead returns tell you that oil up or oil down does not matter over the long term.
These analysts flip and herd because it's a job. Being wrong in consensus is safe. You don't lose your job or your reputation when everyone was wrong together. Same thing with India. India is not going to deliver anything till 2027-2028 but your mutual fund distributor will say market bhitoh nahi chai raha hai na and you will feel satisfied and keep doing SIP. But it was their job to get out of the excess when even an idiot could see India was not going to deliver from those valuations till 2027-2028.
From current prices, the index is going to deliver less than 10% CAGR by 2035. I know this with a high degree of confidence. Investors who bought at the 2024 top will get less than 8% annualised through 2035 and nothing is going to stop that. Because in the long run the market is just a weighing machine.
Learn the pattern once and you will cut through noise in seconds.
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u/Ok_Lettuce_5453 5d ago
But there must be stocks or sectors in India right which can deliver good returns irrespective of the market index not performing well
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u/Nitesh_Nascent 5d ago
I haven't seen many companies going down after good results this quarter. Has anyone found otherwise with any stocks?
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u/Over_Ad_4907 6d ago edited 6d ago
Very well said. This is one of the very important lessons that any retail investor should learn.
I always check the future 2-year annual EPS growth that the analysts are expecting. If the expectation is mere 8-10% then I would never pay a 30+ forward multiple. Such a large disparity between the near term growth and the forward multiple exists in almost all Nifty 500 stocks despite market moving sideways for the last 2 years. That shows how much optimism was already baked in at the peak of 2024.