Be it about life, relationships, duty, karma, decision-making and even money; each chapter of Mahabharata has a meaningful lesson for us. One of the life and investing lesson is from the ground of Chakravyuh. No matter how determined you are, if you don’t have the complete knowledge about the subject, the outcome is always precarious.
The story of Abhimanyu, the youngest son of Arjuna and Subhadra, is an exemplary illustration of bravery yet marks the hazards of possessing only the half knowledge.
He was the valiant warrior, who is known for his tenacity, intrepidity and devotion. Though he appears in the stories of Mahabharata only for a short period, he is the most popular son of Pandavas and remains an inspiration for many readers.
Abhimanyu had mastered the art of archery and breaking into the war formation while he was still in his mother’s womb. Once, Arjuna was explaining the art of breaking the whirlpool to his wife. As Shubhadra fell asleep while listening to the story, Arjuna could narrate only half the technique. Ergo, Abhimanyu knew only how to break into it, he could never learn the art of destroying the formation. (There are different folktales on why Arjuna could tell only half the story to his wife. Irrespective of the version, the crux of the message remains the same).
This event played a key role in his death sixteen years later, when Kauravas challenged Pandavas in a war formation called as Chakravyuh. Only Arjuna and Krishna knew the art of breaking into and destroying the formation. However, they both were engaged in another war, a manoeuvre by Dronacharya to capture Yudishtira.
To save Yudishtira, he entered into Chakravyuh like a hurricane and decapitated many great warriors of Kauravas. To break the death shackles, Kauravas chalked out an illicit ploy to corner Abhimanyu. Many Kaurava warriors such as Drona, Kripacharya, Aswatthama, Karna, etc. circled & attacked the unarmed Abhimanyu. On Drona’s advice, Karna broke Abhimanyu’s bow from behind and also broke the chariot wheel which Abhimanyu used to shield himself. Unguarded, unarmed, tired and exhausted; Abhimanyu was at his most vulnerable position. Since Abhimanyu possessed only half-knowledge of entering the formation, he was not cognizant of how to destroy the formation. This gave an upper hand to Kauravas and they finally managed to ambush and kill Abhimanyu.
The death of Abhimanyu is one of the heart-wrenching stories of Mahabharata. However, it also teaches us an important lesson that ‘Half knowledge is dangerous’.
In the Indian stock market, many investors buy stocks on the basis of rumours, stock price, hearsays, etc. without understanding the underlying business model of a company. To aggravate the situation, they part away with the quality stocks when the stock price goes downhill.
One can go through huge piles of books written on value investing and how to invest like a pro. However, without conducting the fundamental analysis of stocks, it is difficult to create wealth via equity investment.
Here are some pitfalls of investing in the Indian share market with only partial understanding about a company:
1. Investing in penny stocks
The information on company management, financial, growth plans, risk management processes, etc. is limited on the public domain. Even if you may walk miles to gather information on a penny stock, you’ll never be able to get the complete picture of the underlying business.
2. Investing on basis of rumours and hearsays
There can be not a bigger sin to your stock portfolio than buying them on basis of rumours and hearsays. Many times, I have seen investors justifying their buying decision which was influenced by their broker or friend. Here, an investor needs to dig deep into the strength of the research and investment rationale of the person who has recommended a particular stock to them.
3. Selling or buying a stock on basis of their stock price
This is the most precarious decision that can happen to your long-term investment. Many investors in exuberance buy a particular stock only by looking at their stock prices in the past. Similarly, they hit the red button when the stock price plummets. As Peter Lynch states, ‘Know what you own and why you own it’.
When investing in a stock market, one needs to be armed with knowledge, patience and research to take an equity investment decision.
Abhimanyu possessed only partial knowledge about the war. He knew how to break into a war but was uninformed about how to exit. Similarly, if you accumulate stocks not backed by research and thorough understanding of the business model, you’ll only be able to buy that stock. However, you’ll always remain unenlightened on when to exit the stock. Mutating from the vicious circle of half-knowledge to virtuous circle of being empowered, informed and aware about the decisions and their consequences will not only help you to achieve success in the Indian stock market, but all walks of life. As much as you need to identify the right stocks, one also needs to identify when it is the time to move out of that stock.
If you have the resources in terms of time, patience and knowledge to conduct research and periodic monitoring of your stock portfolio, it’s great. Go ahead and start investing! However, if you fall short in any of the resources, it’s always a wise decision to hire a credible stock advisor/expert who can help you navigate in the right direction.