“The point is, ladies and gentleman, that greed, for lack of a better word, is good.” – Gordon Gekko
“Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful.” – Warren Buffet
Greed may have been good for Gordon Gekko (at least for a while), but in the investment world it rarely is as Warren Buffett is famous for saying.
Investors are unequivocally greedy today, and with some perspective it is hard to blame them. Continue reading
Just wondering how many ever read the prospectus before signing the document for investments May be securities, Mutual funds, debt, Insurance or may be any other investment.
I already did a series of articles on the topic but there are always possibilities to explore more :
Here are some more bold pointsissued by SEBI (Stock exchange board of India)
In-case of Securities:-
- Read the Prospectus/ Abridged Prospectus and carefully note:
- Risk factors pertaining to the issue.
- Outstanding litigation’s and defaults, if any.
- Financials of the issuer. Continue reading
I thought of putting the Sahara case today vis-a vis the famous Bernard Madoff ponzi scheme scandal case … well the study is on, need more data collection and actual reporting but Kudos to RBI and SEBI as they finally nailed out the Sahara Scandal case with the help of Supreme court.
Recollecting some of the scandals in the Investment banking space from The Barclays Saga and Libor , LIBOR Manipulation : any thing for you Big Boyz , JP Morgan : Jamie Dimon Testimony and the series is endless ..I believe the quotes of the maverick author holds true :
- The main difference between government bailouts and smoking is that in some rare cases the statement “This is my last cigarette “holds true
- The difference between banks and Mafia: banks have better legal regulatory expertise,but Mafia understands the public opinion. Or you can say”Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world” Continue reading
For the true connoisseur, the finest expression of the art comes when a high-profile investor identifies a bubble, perhaps even makes money out of it, exits in time – and then gets sucked back in only to lose everything in the resultant bust.
An early example is the case of Sir Isaac Newton and the South Sea Company, which was established in the early 18th Century and granted a monopoly on trade in the South Seas in exchange for assuming England’s war debt.
Investors warmed to the appeal of this monopoly and the company’s shares began their rise.
Britain’s most celebrated scientist was not immune to the monetary charms of the South Sea Company, and in early 1720 he profited handsomely from his stake. Having cashed in his chips, he then watched with some perturbation as stock in the company continued to rise. Continue reading
Recalling a chapter from Traders Guns and money Beautiful lies on sale side how derivatives are misinterpreted or mis-sold, It’s simple trying to figure out the hierarchy of the trading floor. There are Sales people – they lie to clients. Traders lie to sales and to risk managers. Risk managers ? they lie to people who run the place – a small correction they think they run the place. The people who run the place lie to shareholders and regulators 🙂
Few days back I did Derivatives derivatives so many, resembles outstanding derivatives with the top 5 banks of the world, here is some basic background for my non financial market friends about derivatives. Continue reading