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24 Apr 2020 by Pradeep U
Investing in Stocks - Timeless Lessons from the First Men to Fly - Research & Ranking

Wilbur and Orville Wright, popularly known as the Wright Brothers were the pioneers of aviation who designed and flew the first powered, heavier-than-air aircraft in the history of mankind on December 17, 1903.

Most of us already know this, right?  But what most people don't know that the lives of these extraordinary people offer some priceless lessons in investing too.

Lesson # 1 Don’t take unnecessary and dangerous risks while investing in stocks

"The man who wishes to keep at the problem long enough to really learn anything positively must not take dangerous risks. Carelessness & overconfidence are usually more dangerous than deliberately accepted risks." – Wilbur Wright

Flying was considered as an extremely dangerous activity back then. Before the Wright Brothers, thousands had tried and failed miserably with many ending up dead or seriously injured.

Even some of the greatest inventors like Alexander Graham Bell and Thomas Edison, who had experimented a lot on flying had failed.  None of them had succeeded.

During their earlier flights, Wilbur and Orville Wright had recognized the potential risks associated with flying and took adequate steps to reduce those risks by flying at a low height and lots of practice by flying on a beach where the soft sand would act as a cushion in case of a crash landing.

As a result of their low-risk approach, they were able to experiment with flying safely, which can be attributed as one of their biggest reasons for success.

Now let’s compare this with investing. Just like the risks in flying, there are numerous risks associated with investing too due to the huge market volatility. Countless investors have burnt their hands and even lost their capital in their attempt to create wealth from the stock markets.

With a patient, disciplined and step-by-step approach to investing, any investor can reduce the risks associated with the stock market investing and create wealth. For more information, click here.

Lesson # 2 An investment in knowledge pays the greatest dividend in any field including equity investing

“The best dividends on the invested labour have invariably come from seeking more knowledge rather than more power."  – Wilbur Wright

Wilbur and Orville Wright were bicycle mechanics. Forget scientific education; they did not even have proper schooling. But they were mechanical geniuses, who could repair anything and build anything they imagined. Besides they spent their childhood in an environment where their father encouraged them to read a lot.

To understand how birds, fly in the air, the Wright Brothers would spend countless hours on the beach looking at birds. Many locals in the area who saw them doing this day after day would think of them as nuts. However, it is this learning experience that gave them the best lessons which helped them to improvise the designs of their aircraft to make it better and better.

Rather than spending their time in learning, if they would have rushed in their attempt to fly, they would have probably failed or even lost their lives like countless others who had failed.

Similarly, in investing, investors who spend their time and energy learning the real factors which influence the stock prices and stock markets as well as understanding the businesses they are investing into are the ones who are able to create significant wealth.

Lesson # 3 Belief is very important to succeed in life and in equity investing

“My observations since then have only convinced me more firmly that human flight is possible and practicable.” – Wilbur Wright

During his childhood, Wilbur had created many toys which could actually fly. Because of this, Wilbur strongly believed that it was quite possible for human beings to fly, and he and Orville would be one of the first humans to fly.

Despite the odds against them and the failures of all others before them, it is their strong belief which ultimately helped them to achieve their success.

For success in equity investment, belief plays a paramount role. People invest in equity because it has the potential to generate the highest returns over the long term compared to all other asset classes. Data of the past few decades have proved this beyond doubt. Yet in testing times such as the current global situation, many investors panic and try to exit their investments. That is why to be successful in investing; one needs to ignore all the negativity and remain invested by believing in the power of equity and the quality of businesses to overcome all odds over time.  Belief is a must!

To summarize, flying and stock market investing is not exactly the same, but they still have a lot of things in common to be successful such as the need for proper risk management, adequate knowledge/practice and a strong belief. Click here if you wish to read about another priceless investing lessons.

One of the biggest reasons behind the success of Wilbur and Orville Wright can be attributed to their thorough understanding of risk and reward. Many others who tried and failed before them were either too reckless, risking their lives in their attempts to fly or were too cautious to take even small risks.

Similarly, majority of stock market investors fail because they fail to recognize the risk-reward relationship while investing. As they result, they end up making risky investments without looking at the fundamentals of the company, or indulge in reckless intraday trading and often fail to diversify their portfolio adequately.

By understanding and implementing these timeless lessons from the first men to fly in the stock market investing, any investor can ensure that the value of their investments too will soar.

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