In the fifth article of our Series on ‘The Most Important Thing’, we show you why if a certain investment is too good to be true, it probably is… Time and time again, the post-mortems of financial debacles include two classic phrases: “It was too good to be true” and “What were they thinking?” Why do we investors keep making such mistakes repeatedly? Because investing is an action undertaken by human beings, most of who are at the mercy of their psyches and emotions. According to Marks, there are four important emotions that govern our behaviour: Greed: The first emotion that serves to undermine investors’ efforts is the desire for money, especially as it transforms into greed. Most people invest to make money. There’s nothing wrong with trying to make money. Indeed, the desire for gain is one of the most important elements in the workings of the market and […]Read more
If you take a look at the Warren Buffett menu of investments, you’re sure to find the likes of Yum Foods (KFC & Pizza Hut), Coca-Cola, PepsiCo, Hershey’s in the specials. Is it time to add some sauces?
Yes! Warren Buffet’s Berkshire Hathaway has inked a deal to buy-out H. J. Heinz, along with 3G Capital. Is it just his love for the ketchup, or does it make absolute business sense too? Does it fit into his typical style of investing? What is his investing style, by the way?
I spent a Sunday morning talking over the same with my Dad. Here it goes…Read more
Over the last 2-3 years, we have seen the economy riding a roller coaster, offering less foresight, and more structural distortions. In such a scenario, are factors like rising inflation & mis-selling by financial institutions shaking the retail investors’ confidence? Are they being driven to gold and real estate as preferred investment avenues rather than to sensible equity investing which could manifold their existing returns?
The budget provides the government with an important platform to introduce constructive reforms. So, could the FM, through the forthcoming Union Budget 2013, have anything in store to bring investor confidence back to the Indian Stock Market? Let’s find out…Read more
If you are a long-term investor, your objective for investing is bound to be two pronged. You expect short-term (dividends) as well as long-term returns from the stock. To fulfill the latter objective i.e. capital appreciation, the company needs to focus on building shareholder value.
However, in pursuit of short-term gains and stock price appreciation, a company may sacrifice long-term value creation. In order to avoid such companies, you need to look for a ‘Level 10’ company.
So, what is a Level 10 company? And, how can companies strive to become one? Let’s investigate….Read more
In October 2012, foreign institutional investors crossed the $150 billion mark of net investments in India. This is despite the challenges the Indian economy is currently facing!
While this may sound surprising, this positive bias comes on the back of the recent reform initiatives taken by the Indian government. These have strengthened chances of better economic growth and thus, improved market sentiment.
But, we retail investors back home continue to stay away from the market! Let’s find out what’s stopping us from earning that extra return…Read more