Hello friends, in today’s article, we see chapter 4 of one up on wall street book. In chapter 4 we see the Passing the mirror test. In this test, you have to ask some questions, for your investment purpose. So let’s see step by step.
Passing the Mirror Test:-One Up On Wall Street: Chapter 4
So you are investing in a business that is going too high or bankrupt, and many businesses come and go in your portfolio. But only things remain that are you. The stock market is a type of vehicle of transfers money from one place to another. So be careful the value of money is always high. So for this purpose, let’s have to ask some questions to pass the test. This test the pure and not lie that telling you, yourself. So that why it’s called passing the mirror test. let’s check it out.
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Before investing, you have to ask the following questions:
- Ask first is, do I own a house?
- Second, ask, Do I need money in the near future?
- Do you have personal qualities that will bring me success in stocks?
- How much to invest?
So let’s discuss the above question. (One Up On Wall Street: Chapter 4)
Ans(Q.1): If you have the house then, you have the minimum capability to live for three years on that house. So if you want to make money in the stock market, you have to ask this question. If you don’t have a house, the first priority is the make the house and then manage your money, in the stock market. let’s discuss the question second.
Ans(Q.2): If you have a house, and you want money to invest. So let’s again ask to question this. If the answer is yes, then don’t invest money. So that money used for the near one year’s future of your family. after this you are qualified to the second stage of mirror test. (One Up On Wall Street: Chapter 4)
Ans(Q.3): If your answer is no to this question. Then don’t invest by yourself, hire someone else. If you want to invest money in yourself, then you have to learn three qualities.
1) You have the patient to increase your investment.
2) You also have disciplined quality, to manage your money.
3) And also third is you have to eager to learn. In the stock market, there is so much knowledge about the companies. so you have third quality. After these qualities, you are capable to invest in the stock market. As live longer as an investor. (One Up On Wall Street: Chapter 4)
Ans(Q.4): Answer this question, you have to consider is that how much money have is to ignore if you lose. That amount of money, you can invest in the stock market. Peter Lynch, say invest like, you don’t care about that money if they lose. With all the above questions you are ready for investment in the stock market. (One Up On Wall Street: Chapter 4)
After this, you have to face three emotional states, are as follows
Three emotional State:
- Concern emotion: This emotion is developed when the stock market down. In that time, investors live in fear and take tension about their investment. This concern stops you to take action, of buying the stock at a bargain price. In this period of investment can go maximum return.
- Complacency(Satisfaction): aftermarket down period is gone, the investor buys the stock at a high price. In that consider is that its stock goes high. But this time they have to concern. Because of This time market at the pick position. (One Up On Wall Street: Chapter 4)
- Capitulation(Submission): This is emotion comes when an investor buys a stock at some price. Then suddenly the market goes down, at buying stock price. At this time investor sell all stock, and submit himself.
This is all about chapter 4 of one up on wall street book.
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