Letter no. 128

In today’s moneycontrol article, we discuss the Habit Loop in equity investing, drawing parallels with the success of Pepsodent’s ad campaign. Claude Hopkins transformed Pepsodent with a cue-routine-reward loop, influencing habits. Similarly, investors develop habits influenced by market cues, routines of investing during downturns, and the reward of substantial gains. Despite potential consequences, this habitual behaviour persists in the Indian equities market, posing challenges for rational investors aiming to avoid entanglement. Breaking the loop might only require superficial reasons, but until then, the party seems set to continue.

Read here: http://tinyurl.com/yt4rb6t5

Our previous articles can be found here:  https://www.buoyantcap.com/our-memos/

Disclaimer:

Information in this letter is not intended to be, nor should it be construed as investment, tax or legal advice, or an offer to sell, or a solicitation of any offer to make investments with Buoyant Capital. Prospective investors should rely solely on the Disclosure Document filed with SEBI. Any description involving investment examples, statistical analysis or investment strategies is provided for illustration purposes only – and will not apply in all situations and may be changed at the discretion of the principal officer. Certain information has been provided and/or based on third-party sources and although believed to be reliable, has not been independently verified; the investment managers make no express warranty as to its completeness or accuracy, nor can it accept responsibility for errors appearing herein