How to learn from mistakes which we keep encountering? The question should interest most of us, as presenting the past can contribute to a less mistaken future. It should especially interest if you are engaged in businesses. You would have probably committed loads of errors in the past. But if you can learn from them and be more successful next time, it would be singularly salubrious.
I will begin with a mistake which I have made that have taught me a great lesson. This is about when to buy and sell.
In business, the price of commodities keeps fluctuating. As a buyer, there is the craving to procure more when there is a price dip; and as a seller, the inherent desire is to wait for higher prices so that one can make bonus-profits! But can one always buy low and sell when prices are high? The answer to the vexed question is: No. You can never time the market.
Let me cite an example. You would have heard of Nutrela soya chunks. The brand owner Ruchi Soya, India’s largest maker of edible oil, crashed into great financial distress when castor seeds procured to make castor oil turned out to be its nemesis. Dinesh Shahra, the company chief, a well-known expert on castor market, took positions on castor seed price. The castor price crashed globally in early 2016. The company got stuck with higher-priced castor seeds. The debt soared, resulting in the company falling into a disastrous debt trap.
The prime cause of the muddle was the speculative view on castor seed prices. It must have worked well in the past, but one bad decision, made the company go belly up.
I have learnt one crucial lesson in my life while buying commodities. Never buy long thinking you will out-smart others. It is always good to do replacement-buying. That means, procure as much as you will consume. Not more. Yes, you will definitely lose out on some opportunities. But historical evidence shows, that the risk of loss of one decision, could wipe out all the gains which you may have made in the past.
There is no shortcut to making money. Speculation and gambling could be someone’s trade, but for many of us, it is a mistaken trait that should be avoided.
Can we learn from our past mistakes? Yes, we can.
Take some time off and delve on the past and evaluate a bit for the future. You will be surprised that numerous lessons will emerge which business books or management classes can never teach you.