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Very common statement from the market analysts these days for the Indian stock market.  India Overvalued but the blogrally will continue.  Although based on valuation metrics, Indian equities are now trading at a significant premium to stocks in other EM countries some analyst claim this too.

We have consistently outperformed the market! … Sensex is now overvalued.

“The stock market is overvalued.” “The stock market is undervalued.”

Which one of these statements is true? Well I don’t know.  May be both

Thanks to quirks of the most popular way of measuring a stock’s valuation: the price/earnings ratio.

While no one disagrees about what the “P” is when calculating the ratio, there is no consensus on how to View full article »

Monday Thoughts :)

Very Good morning to all my readers, Last week was an event full week in India.IMG_20150302_084856

Union budget and Railways budget both presented in the parliament. I would not do any more analysis on them as the media has already done the need full.  Let’s start with some motivational thoughts to get in to the week  :

  • Success is the ability to go from failure to failure without losing your enthusiasm.” – Winston Churchill
  • The challenge is not to manage time, but to manage ourselves.” – Steven Covey
  • When it doesn’t matter how much the drinks cost, it’s always happy hour.
  • Associate to Analyst: “My Tuesday night is your Friday night.” ED to Associate: “My bar tab is your paycheck.”
  • One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man.” – Elbert Hubbard
  • View full article »

Wall Street Sales Pitches

Sharing  some one liner sales pitches that became famous on Wall Street and people should really avoid them & mostblog of them used by many advisory firms and they have embraced a culture of sales and monthly quotas. If you find these pitches be afraid it’s a caveat…..

  1. “It’s like a CD.”
  2. “Buying on margin will greatly increase your returns.”
  3. “This fund did really well last year.”
  4. “As long as the music is playing, you have to get up and dance.”
  5. “Do you want the confirmation sent to your office or your mansion?” View full article »

The single greatest mistake investors make is to extrapolate recent history out into the future. They take the financialblog returns of the past 5 days or 5 years or even 50 years and assume the next few days or years will look just the same without any consideration for the historical context or conditions that provided for those returns.

They forget that, while ‘history may rhyme, it doesn’t repeat itself’ (Twain). Or that, “the only thing that is constant is change” (Heraclitus). These two famous quotes apply to the financial markets as much as anything.

Ignoring these truths and instead simply extrapolating is why investors are suckered into pouring money into the stock market only after a run of great performance. View full article »

As I did a story few days back  When to sell and When to buy ?     Trying to recollect the some book rules blogfor Investments that holds true in many adverse scenarios.

As all of you must be aware of that the field of behavioral finance has helped us to understand that we don’t always make rational investment decisions.We often make poor decisions because of our biases. And the designers of structured product are well aware of these “flaws” in investor behaviour. So they structure products that exploit our flaws. View full article »

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