Are you a business ninja? You think you’re good? Getting daddy’s business to run doesn’t count? Being a one hit wonder doesn’t count. I mean are you serially successful across businesses?
As the British Government’s Dealmaker for India and China, I know a thing or two about structuring deals. It also helps to be a businessman (from asset management to algo trading under my own brand alpeshpatel.com) and barrister of course too helps.
Doing business is like trading. In trading you buy low and sell high. Whether that is Apple shares or GBP against INR. But trading teaches you business skills. The most important, least appreciated business skills traders have that makes them super-rich, really quickly are:
- They know when they are in a winning trade, to add to the position. Most business people don’t do this. They don’t have the option. Warren Buffett is rich because he structures his business deals so that he has the option to get more money, if he is right, by owning even more of the company (for payment of course) – that payment being at a lower, exclusive price oftentimes.
- They structure deals so they find out fast if they are going to lose money, and they have an ability to exit. Most business people are locked in. The best dealmakers ensure they are never locked in. They also have a mechanism to find out if they are losing money, and if so, can force the other side to buy them out. They are masters at put options, liquid markets, insurance policies, price transparency. Most people don’t do deals like this – and end up stuck.
- The best business people don’t turn profits into losses. They do not hold on too long. They exit at the peak when the momentum is high, when everyone is optimistic. They make sure their deals allow that. They are ready to sell, the day they buy. They don’t wait and hang around. That is also what trading teaches you.
- The best business people don’t add to losers. The worst traders will sell their profitable positions to put the money into their losing ones. Think Vijay Mallya for one. The best business people sell their losers, and make sure the deal allows that, to put money into their winning trades. They double down on winners not losers.
Want to know what trading can teach you about business, about controlling your emotions? Want a crash course – try trading for even one hour and you will learn about your character – they say after all if you want to find out about a person’s character – just give them some money – check out http://etx.tradermind.com to kick off your self-discovery and see if you have what it takes to be a business ninja.
Alpesh Patel
