“It’s not supposed to be easy. Anyone who finds it easy is stupid.” — Charlie Munger
By February 2024, Kiran had made 43% on his stock portfolio in 14 months. He had a spreadsheet tracking every trade. He had a YouTube channel with 2,200 subscribers where he shared “stock analysis.” He had a Telegram group called “Kiran’s Multibaggers” with 340 members. He was 31 years old and he had found his calling.
In April, he quit his job as a marketing manager to trade full-time. “The market pays more than my employer,” he reasoned. “Why would I keep working for someone else?”
By September, he had given back half his gains. By December, he was below his starting capital. His Telegram group had gone quiet. The YouTube channel had its last upload six months ago.
Kiran had fallen for the bull market illusion: the belief that returns generated in a rising market are evidence of skill.
Luck Dressed as Skill
Between 2020 and 2021, the Nifty 50 rose roughly 100% from its COVID lows. Virtually every stock in India went up. Many went up 200-300%. In this environment, it was nearly impossible to lose money picking stocks — which meant returns told you almost nothing about an investor’s ability.
But humans are pattern-seeking creatures. When we make money, we attribute it to our intelligence. When we lose money, we attribute it to bad luck or market manipulation. This is called self-attribution bias, and it’s particularly dangerous in investing because a bull market can sustain the illusion for years before the correction reveals the truth.
The Survivorship Problem
You’ve never seen the YouTube channel of someone who tried active trading and quietly went back to their day job. You’ve only seen the channels of people who are (temporarily) succeeding. This is survivorship bias — the successful ones are visible, the failures are invisible. It creates the false impression that active trading is reliably profitable, when the data shows otherwise.
SEBI’s own study of individual traders in the futures and options segment found that over 90% of active traders lose money over a 3-year period. The few who profit often do so inconsistently, and many of those gains are attributable to market conditions rather than skill.
What Munger Understood
Charlie Munger was characteristically blunt about overconfidence in investing. He believed most people dramatically overestimate their ability to pick stocks and time markets — and that this overconfidence is the primary driver of underperformance. His antidote was inversion: instead of asking “how do I make maximum returns?”, ask “what mistakes guarantee I lose money?” Overtrading, overconfidence, and confusing luck with skill top that list.
The Lesson
If you made strong returns in the last bull run, ask honestly: did I beat the Nifty 50 index? By how much, and for how long? If your portfolio simply rose because the market rose, a well-selected fund portfolio would have delivered the same result — with less risk, less effort, and someone to keep you from making expensive decisions in the next downturn.
Kiran is back at work now. He still invests — through a structured SIP plan built with a financial planner. He no longer has a Telegram group. He considers that progress.
The Planner Advantage
A financial planner provides something that bull markets systematically destroy: an outside perspective. When Kiran was making 43% and ready to quit his job, a planner would have asked the uncomfortable question — how much of this is you, and how much is just the market going up? They would have pulled up the Nifty 50 returns for the same period and compared. They would have stress-tested the plan: what happens to your income if your trading returns drop by half? That kind of structured, dispassionate review is almost impossible to do for yourself when you’re in the middle of a winning streak.