This is a very basic post for the kids and for the people to explain the banking terminologies. Here is a conversation between Dad and Son explaining how the bank operates,
What are the implications of CRR, SLR, Repo Rate, Reverse Repo Rate and their impact on deposit rate, loan interest rate and on inflation?
Son: I have heard recently that Mr. Rajan has reduced Repo Rate by 50 basis points and everyone is saying that this is good for the market. Loan EMI may also come down. What is this rate cut means actually? I want to understand this.
Dad: To understand this you first need to know, how does a bank function. Continue reading “How does a bank operate?”
You are a trader or investor ? This is the difficult question that most people do not able to answer, they take a short term view and when position goes against them, they prefer to hold the stock as long-term bet.
Most successful investors tend to have clarity of thought and look only at the larger picture. They discount all day-to-day noises and concentrate only on the fundamentals. In the end, fundamentals always prevail over speed.
here is a small description that short-term is more of an emotional based trading where as the long-term provides value for your thoughts.
Short term= Emotions
Long term= Earnings Continue reading “Short Term V/s Long Term”
The IPO season is back in the Indian market; Yesterday Thyrocare got listed on Indian bourses with more than 50% of premium. Ujjivan Financial Services will make the debut today, Parag milk foods owner of Go and Gowardhan brands of dairy products, is in the pipe line.
I have been always arguing the case Do IPO’s really make money for the investors? Yes/No
There is a proactive paper published in 2012 arguing that Initial Public Offerings (IPOs) must simply be abolished by Adam Pritchard (“Revisiting ‘Truth in securities revisited’: Abolishing IPOs and harnessing markets in the public good”). He suggests that Continue reading “Shall IPOs be abolished ?”
In personal finance, if you divide the number 72 by the rate of interest, you get to know the number of years it will take for you to double the money..
Ex: if the rate of interest is 9%, simply divide the number 72 by 9% and the answer is 8. Thus 8 years will take to double your money if you invest at 9% of rate of interest.
INTEREST: we can use this rule in reverse to know the rate of interest needed to double your money to achieve your set goal. Continue reading “The Rule of 72”