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Markets this quarter and a game of dominoes
At a glance Indian markets have just ended their best quarter in five years – Valuation metrics tell differing stories – Nifty P/E say “expensive” but P/B say “fairly priced” – History suggests the...
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The four types of investor stories
At a glance We’re swayed much more by good stories than by factual evidence – In investing, a compelling story backed by anecdotal evidence is much more likely to get us to act than graphs or numbers –...
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Four reasons why sharply rising markets aren’t a good thing
At a glance Rising markets bring cheer all round – However, there are potential downsides to rapid upmoves – An investor should be aware of the potential downsides in such a market – A perception of...
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Is the US about to sneeze?
At a glance A newsletter suggests that US markets currently are ripe for a huge correction – This is a result of the Fed’s Quantitative Easing programs that have pumped huge amounts of liquidity in the...
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Are you a hedgehog or a fox?
I travel quite a bit in my line of work, and many of those are short trips to cities I’ve never been before. This means a fair amount of variability in my commute times. So, when I’m back home in...
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How to prepare for a market correction
Nov 2014: Both the Indian benchmark indices are up by almost 40% from November last year. These are troubling times for the calm investor. I know, the two sentences don’t make sense. Shouldn’t an...
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Are you a humble decision maker?
Let’s say you were offered a game where you picked one of two choices: A 95% chance to win ₹1,000,000 OR Certain offer of going home with ₹910,000 Classical economic theory suggests the value of #1...
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3 charts that sum up Indian equities in 2014
1. An “exuberant” 2014 Both key benchmark indices up by 30% December so far has seen the only significant correction in 2014 2. A “can’t go wrong” 2014 Every sub-index provided positive returns, some...
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Predicting stock market returns
At a glance While predicting market performance is nearly impossible, there are lessons to be learnt from looking at past performance We take the predictive power of three popular valuation metrics;...
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Predicting market returns? Not so fast!
“Be careful – you are using the same data to predict as the model itself. You used past data to determine how stocks have behaved 1 year in the future based on the P/E that the index had (average...
View ArticleFor the next great investment story
We are wired for stories The human brain is an awe-inspiring feat of evolution. According to biologists, it has approximately 90 billion nerve cells which are linked together by, literally, trillions...
View ArticleInvesting and Life, Balance Sheets matter over Income Statements
How do you follow your investments? If you’re like a lot of people, you keenly await quarterly earnings announcements to track projected versus actual growth in Sales, EBITDA, Net Profit, EPS (Earnings...
View ArticleWhat if you were the world’s unluckiest investor?
[This post was inspired by Ben Carlson’s post: What if you only invested at market peaks?link on his fantastic blog ‘A wealth of common sense’. Highly recommend following Ben on twitter @awealthofcs]...
View ArticleIndia’s true sunshine sector
As of this writing, the NIFTY is trading slightly below its lifetime high of 10,477 points, nearly doubling from 5,517 in early September 2013. In the same period, NIFTY Price-Earnings has risen from...
View ArticleIs Bharat22 ETF a good investment?
The Bharat22 ETF opens for subscription for retail investors on Nov 15th. I was curious about this latest NFO (New Fund Offer) for two reasons: because it’s an ETF (Exchange Traded Fund) and not a...
View Article5 Lessons from Amazon’s stock price chart
Jeff Bezos recently made news (again) when he became ‘the world’s richest man’ with a net worth of over $90 Billion. Over $10B of that was added within a few days in October 2017 after Amazon announced...
View ArticleNIFTY versus the Sectors
Market correction: “When” not “If”? We’ve all been bracing for it for a while now. At Price-Earnings of 25+, NIFTY PE is now two full standard deviations above its median value of 19, that suggests or...
View ArticleBill Nygren: Value Investing Principles and Approach
Bill Nygren is a fund manager at Oakmark Funds. He is also Chief Investment Officer for U.S. Equities at Harris Associates. He’s particularly well-known for being a value investor who doesn’t fear the...
View ArticleRead this before deciding your 2018 investment strategy
What a week for the markets! Drama from the Gujarat elections injected volatility, but overall stocks rose dramatically through the week. 82% of stocks listed on the NSE rose during the week. To put it...
View ArticleBrace for negative returns in 2018
Predicting stock markets is a futile exercise. You only need to compare historical predictions versus actual market movements to come to this conclusion. When bulge bracket investment banks and...
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