Warren buffet: A good business that can be purchased for less than the discounted value of its future earnings.
George Soros: An investment that can be purchased (or sold) prior to a reflexive shift in market psychology/fundamentals that will change its perceived value substantially.
Benjamin Graham: A company that can be purchased for substantially less than its intrinsic value.
Some other examples are:
The Corporate Raider: Companies whose parts are worth more than the whole. Continue reading “Some Great Examples of Good Investment:”
Its fun to watch the market these days’ analysts making disclosures, investors taking positions or rather trader based on the budget and cabinet formations. The sectors that I personally feel should grow will be railways stocks , infrastructure stocks, fertilizers space, manufacturing sectors PSU banks and the steel segment but not the iron ore , the above sectors will definitely get impacted by the Modi policies .
But I prefer to to follow the below rules from Peter lynch and they are applicable in all the forms of market across the globe.
- Your investor’s edge is not something you get from market experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand.
- Over the past 3 decades, the stock mkt has come to be dominated by by a herd of professional investors. Contrary to popular belief, this makes it easier for the amateur investor. You can beat the market by ignoring the herd.
- Often there is no correlation b/w success of a company’s operations and the success of its stock over a few months or even years. In the long term there is 100% correlation b/w the success of the company and the success of the stock. This disparity is the key to making money: it pays to be patient, and to own successful companies.
Continue reading “Modi Government , where should you invest now ;)”
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 behavior. So they structure products that exploit our flaws.
Few points to be taken in to account :-
- Never buy an investment product if there’s a commission attached to it.
- Only work with an adviser who offers a fiduciary standard of care.
- Only invest in a product if the seller can demonstrate that they also are investing in the same product.
- Never buy a complex product; if you can’t fully understand the nature of the risks and the costs, run as fast as you can because you can be 100 percent certain the complexity is designed to favor the issuer. In other words, you’ll be the patsy at the poker table who doesn’t know he’s the patsy.
Continue reading “Book Rules for Investment”
If you are deployed in the Investment banking space front office, middle office or back office, you should have come across phrases such as “collateral liquidity crunch” and “collateral scarcity”, and new terms such as “collateral transformation” and the “collateral upgrade trade.
Came across an interesting paper on Collateral management sharing some of the highlights, need for collateral management, how we got there, some of the Best Practices to collateral.
The 2008 financial crisis and the role derivatives played in it compelled regulators to re-examine and reengineer the entire derivatives market structure. The disruption to the derivatives market is already underway, primarily as a consequence of behemoth regulations such as the Dodd-Frank Act (DFA), European Market Infrastructure Regulation (EMIR), Basel III and others. But new global regulations are not the only driver. Continue reading “Collateral Management simplified”
With all the Ukraine stuff, Missing Malaysia Airlines flight MH370, World’s biggest democracy getting ready for the exaggerate Melodrama and some procrastination from my side , some things got lost in my spindle. Time to catch up 🙂
In the banking sector, which features leveraged institutions operating in a principal capacity, capital requirements are designed with the goal of enhancing safety and soundness, both for individual banks and for the banking system as a whole. Bank capital requirements serve as an important cushion against unexpected losses.
They incentivize banks to operate in a prudent manner by placing the bank owners’ equity at risk in the event of a failure. They serve; in short, to reduce risk and protect against failure and they reduce the potential that taxpayers will be required to backstop the bank in a time of stress.
Continue reading “No Failure Vs Orderly Failure”