Extraordinary returns follow extraordinary discipline. Discipline in buying and selling, and maybe the most important one of all, holding. Developing the conviction to hold is something that I’ve learned over time. It didn’t come easy. The basis of this article is to give some insight on how to develop the conviction to hold your winners. It is very tempting to sell along the way, and it’s okay to take a little off the table, but the big money is made by holding.
“It never was my thinking that made the big money for me. It always was my sitting.” — Reminiscences of a Stock Operator
Many of us, myself included, look at stocks that have made big moves and think to ourselves, “If I would have only knew about that company and bought it back then.”But would you really have developed the conviction to hold during the run up? The problem is that to achieve a multi-bagger in the portfolio, you have to hold a multi-bagger. And if you want it to change your life, you need to hold a lot of it. Continue reading “Patience is Power – Market Convictions”
Recently sharing and discussing on the economic growth and the debt market yield spread impact recalled me some work I did in the past and its worth sharing,
The abstract was based on the evidence that yield spread can serve as a leading indicator of economic activity.It’s important to understand few basic concepts before moving forward:
YIELD SPREAD: The difference between yield of long-term debt and short-term debt instrument is known as yield spread. Higher the difference between instruments greater will be the yield spread.
For example, if the 05-year Treasury bond is at 3% and the 20-year Treasury bond is at 4%, the yield spread between the two debt instruments is 1% (4% – 3%). Continue reading “Economic Growth and Yield Spreads on Debt paper – Back to School”
Here are some honest predictions for 2014 🙂
|Sensex 30,000 or 10,000
||WTF are you asking me for?
|10 Year Bond
||Could not fathom a guess
|Fed Fund Rates
||Haven’t a clue
|US Housing Market
||That’s a really good question
||Not a clue
||Yes, we will probably have a GDP
|Growth in China
|European Sovereign Debt
||Hmmm, interesting . . .
|2014 Election outcome
||HTF should I know?
|Abenomics & Japan
|Possibility of Recession in 2014
||Possibility & Probability are 2 different things
What determines the shape of the zero curve? Why is it sometimes downward sloping sometimes upward sloping and sometimes partly upward sloping and sometimes partly downward sloping?
Lot of theories have been proposed but the simplest one is the expectation theory which conjectures that long-term interest rates should reflect the expected future short-term interest rates. More precisely, it argues that the forward interest rates corresponding to a certain future period is equal to the expected future zero interest rate for that period. Continue reading “Theories on Term structure of interest rates :”
There was a unique study done recently paper titled “MARKET EFFICIENCY AND DEFAULT RISK: EVIDENCE OF AN ANOMALY FROM THE CDS AND LOAN CDS MARKETS” by Lawrence Kryzanowski, Stylianos Perrakis and Rui Zhong.
The findings where significantly positive pricing-parity deviations from a simulated portfolio that simultaneously participates in opposite legs of the undervalued and overvalued contracts in the CDS and LCDS markets for exactly the same underlying firm, maturity, currency and restructure clauses. These deviations cannot be accounted for by trading costs, illiquidity or imperfect data about recovery rates in the event of default, suggesting segmentation between CDS and LCDS markets. Continue reading “Market Efficieny : Anomaly from CDS and Loan CDS”