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Tag Archive: Behavioural Finance


Life is uncertain and volatility could be best understood by one’s life, sometimes you are on peak sometimes low. IMG-20160214-WA0004-2Loves, hatred, emotions, excitements, are the various factors that define the volatility of life.

Moving down to markets Volatility is the inherent behaviour of the markets that’s the reason trader makes and loses money.

The markets are volatile so does the life.  It’s important to curb the volatility and see the things from the long-term horizon.  The high tides do not last forever so does the calm sea-shore.

The nastiest thing I’ve ever told anyone (a finance fellow angry with me): “When you have absolute intellectual and more disrespect for someone, the only real compliment you can possible get from his in making him angry”
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Continuing from the last post on predicting the market from:  the words by John Templeton “Bull markets are born blogon pessimism, grow on skepticism, mature on optimism and die on euphoria.”

You can’t wait to time or predict the market, today is the best time to start investing if you have cash. Cash is a strategic asset.

The sense of pessimism is prevailing all over. Generally speaking the lifespan of investment remain for 30-40 years and to get the opportunity window for investment is bit difficult. Analyzing the Sensex in the last 20 years there has been 3-4 opportunity windows. Continue reading

Starting with Nassim Taleb’s sardonic story about forecasting. As the tale goes, a trader listened to the firm’s chief CDSDEFAULT-1-1economist provide a forecast about the markets and then lost bundle acting on it, getting him fired. The trader angrily asked his boss why he was fired rather than the economist, as the economist’s poor forecast led to the poor trade. The boss replied, “You idiot, I’m not firing you for losing money. I’m firing you for listening to the economist.”

Here is a different sort of “top ten” list of interrelated investment insights and recommendations – mistakes that are both common and deadly – for us to try to correct for 2015 and beyond :-

  1. We don’t prioritize properly in financial planning: Your savings rate is far more important than your rate of return in determining how bright your future is likely to be. However, we are far more likely to obsess over squeaking out a bit more performance out of our investments rather than thinking about ways to save more. Continue reading
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