This is the archive of all articles and analysis related to the nature of stock market risk and reward
In the last month, the Nifty fell by 7.7%! Out of which 3.32% was just yesterday! Yesterday I wrote a short note with a few suggestions for new equity investors at such a time of carnage. In this post, I would like to expound on that. Just as I was thinking about ways to do…
Continue reading →Every now and then readers have suggested that I write about the FMCG sector and in particular, FMCG funds. Since I know next to nothing about this, I requested Krishna Kishore who writes a refreshing blog on stock investing at tyroinvestor.com to discuss some of the myths surrounding FMCG stocks. This is his second post at…
Continue reading →Are we now in a bear market? The Senex has fallen 8% this month and 14% the last year. If you had invested a lump sum at the end of May 2014, it would given close to nothing or even a small loss. Does this mean we are in a bear market now? This is…
Continue reading →A review of Amit Trivedi’s new book, Riding The Roller Coaster -Lessons from financial market cycles we repeatedly forget. I was fortunate to listen to Amitji on March 1st 2015 at the Mumbai Investor Workshop. We were short of a speaker and Subra requested Amitji to speak on debt mutual funds. Amit Trivedi is a renowned…
Continue reading →How much can I expect from equity as an asset class for long-term goals?. This is a question one often hears from first-time investors, especially those who are migrating from the comfort of fixed deposits or real estate. Unfortunately, answers from experienced equity investors are steeped in hindsight bias. They often extrapolate their own good…
Continue reading →What we know as Systematic Investment Plan is an investment strategy (not a financial product!) derived from what is known in the US as Dollar Cost Averaging. Obviously the term SIP sells better(than Rupee cost averaging) ! The Indian stock market is a toddler. Sensex data is available from only 1979. Many have argued with me that…
Continue reading →I am a fan of Carl Richard’s (Behaviour Gap) napkin drawings (who is not?!). From time to time, I have thought of similar sketches but never got around to actually drawing them on my own napkin – Excel. Here are few. The whole point of such a sketch is that it should be self-explanatory….
Continue reading →In an interview to Wealthforumezine, Shankaran Naren, CIO, ICICI Pru AMC, suggested that buying low and selling high using the price to book value (PB) is better than the price to earnings (PE) model. Since I have earlier shown that there is absolutely no merit for long term investors to buy at low PE and sell at…
Continue reading →Here is how I visualize the growth of an equity portfolio as a tilted pendulum. It is a simple ‘mental model’ that might* aide a new investor with regard to what he/she should expect from equity investments. (*) might because, it makes sense to me, but I am not sure if it will to you….
Continue reading →Those who attended the second Chennai investor workshop had the privilege to listen to R. Balakrishnan – Crisil co-founder; former head of equity research at DSP Merrill Lynch, former executive VP of Edelweiss, Money Life columnist and blogger (to name a few!) He spoke about “investing for keeps: in equities I trust”. The video was shot by my friend,…
Continue reading →So the indices fell the sharpest yesterday in recent memory. So the Sensex rose by 19% in the last year, but much of it was in the first 6 months. For in the last 6 months, the index fell by about 4%. Six months of a sideways market! oh my! oh my! Is this it? Is…
Continue reading →In the second part 2, let us address the ‘kitna milega?’ with a little more analysis. The first part is here. Before we being to answer, what return one can expect, the objective of the study must be clear. We will be using past data to figure out, for a given duration (say 15 years), what is the average return…
Continue reading →On Monday last, most Indian stock indices ‘crashed’ by about 2%. Immediately the media wrote columns as to why this occurred. The next day there were hand-holding articles as to why one should not be scared of such market movements. A case of, ‘pinch the baby and rock the cradle’. Here is a series of…
Continue reading →Balaji Vaidyanath from Sundaram AMC where he works as a fund manager in its PMS wing spoke about, investment process and construction of an equity portfolio on 1st Nov. 2014, at the Chennai Investor Education Workshop on Financial Planning and Goal-based investing. The workshop was jointly organised by Srinivasan Sundararaman of MoneyKare, Wealth Managers, and myself and…
Continue reading →Are the markets overvalued? Is the Nifty PE too high? Should I exit and re-enter later? Aided by ‘experts’ who advice ‘caution’, such questions are doing the rounds again. Here are some misconceptions and myths about the Nifty PE. In a previous post on the relevance of the Nifty PE for the long-term investor, I…
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