Let’s make some Loss in business..What!?
I really want to talk about making Loss today. If you are thinking ‘Why Loss, always talk about making Profit instead?’, you have come to right place.
We always find people talking about how to make more money or expand business or grow in career or how to get rich ..etc We rarely hear people talking about making Loss. You will find very few people who want to talk about how much loss they made in business in past few months. Loss is a topic which we want to lock in a room and throw key in to Bandra khadi(or is it Mahim Khadi? doesn’t really matter).
However – can you find any one business which never made any loss?
We live in middle of uncertain situations all the time. Look at present stock market – why is market going down since last 2 weeks. No one really knows. News channels always come up with valid reason for why market went down. Is news channel correct?
Markets can go down when news is good and can turn North when news is horrifying. Markets are made up of people and people sometimes do things without valid reason. If I was already under peer pressure to sell my stocks – I will do it as soon as I hear something stupid. North Korea bombed South Korea – I have no idea where exactly is Korea on the map but I think its good enough reason to sell my stocks.
You are surrounded by people who would run away from market when some bank in Greece declares that they cannot payback loan because they paid all money to employees to have nice holidays and get all kinds of benefits.
You cannot stay bull all the time – you cannot stay bear all the time. You have to flow with people. And always have a backup plan(loss making plan).
No one really wants to make loss. But every trade you do has potential to turn in to loss.
What is your backup Plan?
Do you plan your trade or you trade your plan ?
Do you know what is the maximum Loss you can handle in your annual overall finance if things go wrong?
Do you know what is the maximum loss you can handle in each individual deal ?
If you are thinking why the hell I am thinking about all these loss making questions? go back to first line and read whole post again.