I am personally inclined towards behavioral finance, as it has continuously challenged the conventional financial theory of rational wealth maximizers.
The irrational financial decisions, emotions and psychology have taken over the field of finance.
The very famous Aswath Damodaran says, the equity risk premium is the key to investing & valuation.
Ben Graham told once Mr. Market is there to serve you, not to guide you.
In the Taleb’s language you buy – sell or you make omelette out of it depends upon your luck, randomness, Probability, Belief, conjecture, Theory, Forecast and Anecdote.
The most crucial investing question that I have noticed is: Do you know your time frame? Continue reading “Investing facts and Behavioral Finance”
Recalling the movie Other People’s Money . as I was more curious to know about the heated debate in US whether Private Equity to be termed 813530as Hero or Villan. Those of you who has seen the Wall street series and remember Gordon Gekko,a character resembling popular culture for unrestrained greed (with the signature line, “Greed, for lack of a better word, is good”), often in fields outside corporate finance.
Let us try to understand Private Equity (PE) :
Private equity generally make investments in the operating companies through a variety of loosely affiliate investment strategies leveraged buyout, venture capital and growth capital.Typically, a private equity firm will raise pools of capital, or private equity funds that supply the equity contributions for these transactions. Continue reading “What is Private Equity?”
Prof Aswath damodaran is an authority on Corporate Finance, sharing his latest post where he defines why we should welcome the Uncertainty. If you can value companies early in the life cycle, you cannot do so with any degree of confidence. I concede that point, but that is exactly why I would try to value them!
I know that statement makes little sense, but to solidify my argument, take a look at the following list of five assets/entities and rank them on the basis of the confidence you will feel in valuing each one. Continue reading “Welcome the Uncertainty”
In one of the recent post of Prof Aswath Damodaran the authority on corporate finance in this world, valued Twitter at about $10 billion. He made a ton of assumptions to get to that value and argued that changing those assumptions could give you a different value. In the last few days, he is sure that you have seen many stories about Twitter’s post-IPO worth, with numbers as high as $25 billion being offered as estimates. In fact, the gambling markets have already opened on the offering price and the players in that market seem to be siding with the higher numbers.
To describe the market the difference between Pricing Game versus The Value Game have some amazing stuff :The Pricing Game versus The Value Game Continue reading “The Pricing Game versus The Value Game : The Twitter IPO”
The very famous Aswath Damodaran says,the equity risk premium is the key to investing & valuation . Ben Graham told once Mr. Market is there to serve you, not to guide you.
And A crucial investing question: Do you know your time frame?
To cut short I am sharing 9 facts on investing below :-
1. Nine out of 10 people in finance don’t have your best interest at heart.
2. Don’t try to predict the future. Continue reading “9 Facts about investing”