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
Recently an article published on Bloomberg, Richard Thaler is not only a famous economist and author, but is also part of a very successful fund, the 70-year-old University of Chicago professor, whose stock-picking theories drive the Undiscovered Managers Behavioral Value Fund, is getting discovered in more ways than one:
- “Behavioral economics [is] a field that only exists because regular economics is based on an idealized economic agent, sometimes called Homo Economicus. In the book we refer to such creatures as Econs. Econs are creatures that can calculate like a super computer, never get tempted by fatty or sweet foods, never get distracted, and probably aren’t a whole lot of fun to be around. In contrast, real people, who in the book we call humans, don’t make any appearance in standard economics. Behavioral economics is economics about humans. Continue reading
It’s a Lazy Sunday sharing some of the random thoughts, observation that will come to your mind if you are in the Corporate financial jungle, or may be your boss have shared with you..if not you would love to read them for once :-
- Drinking is bad, but feelings are worse.
- What most people would call the greatest night of their lives, I call just another Friday.
- I thought there’d be worse nicknames to have for a girlfriend, but she didn’t find “The Warden” funny at all.
- Some of the best moments in life are the ones you can’t tell anyone about.
- A Blackberry and a 6-figure pay check is the crutch that single chicks call a career. That facade crumbles at 30.
- Haircuts are the ultimate economic indicator. In bad times, it’s every 8 weeks. In good, it’s every 6. I go every 3 weeks. 🙂 Continue reading
Had an interesting conversation – “what is the feeling on Markets? I think further selling will be there. Everything is going against the economy Crude, Rupee, Earnings, Monsoon. Global issues not cooling down, Greece planning to exit Euro, China Production is slow, Saudi might again attack Yemen. Yaa but we had a spectacular run up this year as well as all in anticipation. Macro was improving and micro we were discounting and were giving time, but now Macro is against us and micro will take time to improve. People are booking profits big time I think ….”
To be honest no one knows how market will react, if you are keeping these points in check probably you might do well :-
- Saying “I’ll be greedy when others are fearful” is much easier than actually doing it. Continue reading
As I did a story few days back When to sell and When to buy ? Trying to recollect the some book rules for 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. Continue reading