What white shirts taught Kishoreji and me…

Below are some of the excerpts from the book “It happened in India” by Kishore Biyani:

A couple of years back a team at Big bazzar came up with an idea of buying white shirts at low, stacking them high and selling them cheap. This is the underlying principle of any hypermarket. The premise to the idea of white shirts was that every person in India owned a white shirt in his wardrobe. So, if they could sell it cheap, they would make handsome profits. So they purchased a huge stock of one lakh white shirts and priced them at Rs 149 each. But the customer response didn’t seem to be keen enough. Reason: White shirts although are cheap, they are costly to maintain. And the intended customers to whom this price is meant for are those who travel by bus, train and will have to bear dust and pollution. And those of whom who can afford for maintaining a white shirt are those who are willing to pay Rs 500 or Rs 1000 per shirt. So when the manager on floor realized this he brought the selling price further down to Rs 129 (Rs 105 being the cost price). But this strategy too didn’t help. When this issue came up to Kishoreji, he said that his manager though has put in good effort hasn’t tried enough. Kishoreji simply asked “Have you tried it to sell at Rs 49!?” The essence is that when we have done a mistake, accept it and try to get out of it quickly. Never put bad money after good money.

The above statement is somewhat similar to what my friend surender told me when I had expressed my interest over trading. He said “Never get obsessed with any particular share. If a share isn’t fetching you money, forget it, you may lose some money, but you can probably avoid a debacle.” No matter how much research you have put in buying those shares, no matter how much time and effort you have put in, no matter how much sentimental you are about that share, at the end of the day what matters is whether that share is fetching you money or not. If it is not fetching you money, dump it, Kill it! And forget it. Things like shares depend on n number of variables or parameters. And the failure of the share is not that one hasn’t put effort, it is just because, of these n variables, m variables didn’t perform well.

I believe that the same principle follows for life in case of any sort of investment (not just money). Generally people are obsessed with those things in which they put in a lot of time and effort. Even if we know that things aren’t going well, we tend to think “Let me give it one more chance”. The reason is “how can we let go things when we have put it so much effort in it”, “common let me try a little more”. I believe that it is OK to think this way, But when things are not in our hands, it is foolishness to be obsessed with them. When other parameters as mentioned or other people for that matter are not willing to make things work, it isn’t our fault! If things aren’t working fine and we know that they won’t, its better we leave them aside and concentrate on those that would fetch us more.
The best part of these bad investments is that they teach you some good lessons in life. Take the lessons, forget those bad things and move on with your life!