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Share Trading and Game of Chess

In 1972, Bobby Fischer won the  World Chess Championship.That year I was doing M.Tech from IITK India and staying at Room Number 316 ,Hostel #4 of IIT Kanpur. I vividly remember the day was 1st Sept 1972 when Bobby Fischer was declared winner defeating Boris Spassky.My immediate neighbour Mr. Behl was doing PhD in Physics,and we both became almost addicted to the game of Chess, and used to play regularly.Occasionally we were joined by Institute champion Mr. Dhawan,and in a very short time I had picked up the game very well,and in that year Chess tounament I was placed 6th,among 48 entries received.Not bad for a novice who started playing just a few months back.

Later after leaving IITK,I continued playing Chess and Contract Bridge,and won a few awards too.In year 1976,I started investing in stocks,and now that I have also started trading in shares,I find that playing game of Chess and Trading in shares,have number of similarities.Some of them are:

  1. Market sentiment is the “Queen” which can move in any direction.Understanding of market sentiment carries the biggest weightage in share trading,just as Queen has the most points for one piece on the Chess Board.
  2. Fundamentals of the company are like the two “Rooks” which can move up or down or sideways but at a slow pace signifying the movement of Elephants.
  3. Technicals  of the company,are like the two “Bishops”which can move only diagonally as the data interpretaion of price/volume movement is diagnosed by a Technical expert,who normally does not like to be straightforward.He likes to confuse traders with his interpretation.
  4. M&A activity in the company is like the movemrnt of  two “Knights”,as atleast two entities are involved in M&A and after the event a new entity takes shape.
  5. All employees are represented by “Pawns”.Some of them can become Queen,but can not take position of the “King” as happens in family run businesses.

So the most important element in share trading is the market sentiment.To understand market sentiment requires the intuitive ability to read the mind of other traders.In today’s Times of India,I was reading about the 13 year old Grand Master PARIMARJAN NEGI from India.And the common trait I found between Bobby Fischer and Parimarjan is the incredibly high retentive power.In 1972 newspapers had reported that Bobby Fischer remembered all the moves that were played during various games with Boris Spassky.And today’s Times of India reported and I quote:

“He remembers all his games.At the age of four Parimarjan’s computer like mind got hooked on to chess.He could foresee the moves of his opponents” 

I think people like Rakesh Jhunjhunwalla and Warren E Buffet have also been gifted with excellant retentive power and intuition to foresee the market sentiment,analyse the fundamentals accurately and predict the behaviour of the market with Technical analysis,before others can.Well,my consolation is that I still have 20 more years to catch up with Warren Buffet and send a letter like written by him on 26th June 2006 ,the day I started my blog to my Guru HE Sri Sri Ravi Shankar.I am sure I will be able to accomplish my mission before my visa to visit this planet expires.       Š

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4 thoughts on “Share Trading and Game of Chess

  1. manohar paul says:

    I am not a great chess player but ur analysis is thought provoking !!!!!! wanted to congratulate you on the excellent web site
    you have hosted on the web from tommorow i am planning to invest in some of your scrips, but unfortunately i have not been able to find ur email address, so i thought of posting this message here.Also i would appreciate your comments on a few scrips i track, such as Taneja Aerospace and Expo Gas Containers for long term, if and when time permits,like you i too worked for QGPC in Qatar but on a very lower rung of the ladder.

    Like

  2. Mandeep says:

    Hi,

    I’m glad I discovered your site , one can safely rely on your thoughts , because they are genuine , transparent and carry spirit of selflessness. I congratulate you for your efforts and I wish you good luck for your mission .

    Regards
    Mandeep

    Like

  3. Vivek says:

    Hello Ashok Dhingra

    It’s so wonderful to discover you and m really thankful of Google. I started trading just 8 months back only bcoz of my curiosity to know what is “BSE” with my first investment of only 1500. “You started investing in stocks first and then started trading” the same rule I am following. I read few rules of Warren Buffet b4 investing in shares. You are having >30 years of experiece in stocks. In last 8 months I understand so many things abt stock market so can simply relay in your research.
    I am too curious to know many things about stock market and it’s sentiment. I will be thankful if you give me ur email id where I can mail my queires to you. The queries will not be related to share prices but technicals and basics of market. Thank you

    Like

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