Aur Kitna Niche Jayega – No Stock is Safe
Many investors underestimate the extent to which a stock can fall. Let’s take the example of the real estate company Unitech. The stock was trading at Rs 520 in January 2008. In January 2013, the stock was at Rs 40. Looking at the fact that the stock crashed by more than 90% in these 5 […]
Difference between Top down approach and Bottom Up approach of Researching Stocks
Top-down and bottom-up are two approaches to investing. Let’s look at what each of these two approaches means. Under the top-down approach, an investor looks at the big picture. An investor first chooses which sector is going to do well. Then he moves on to find which companies in the sector are worth investing in. […]
5 Important Traits To Have As An Investor
It is not enough for investors to just analyze stocks well. There are certain key traits that investors need to have to be successful in stock markets. All good investors such as Peter Lynch, Warren Buffett, Mohnish Pabrai, etc have certain key traits which have made them successful. Let’s look at some of these traits. […]
Some Things To Learn From Peter Lynch!
Peter Lynch has been one of the most successful investors in America. He was the manager of the Magellan Fund at Fidelity Investments between 1977 and 1990. During this period, he delivered stunning annualized returns of around 29%. In these 13 years, Peter Lynch was able to raise the assets of the firm from around […]
Never Miss A Bear Market In Your Life!!!
What is a bear market? Bear markets are markets where the prices of shares fall – in many cases, quite sharply. There is widespread negative sentiment in a bear market. Markets tend to follow a cyclical pattern. Bull markets, where the prices of shares rise, are followed by bear markets. Bear markets are again followed […]
Why Does The Stock Fall Immediately After I Buy?
Many people have the million-dollar question – Why does the stock fall immediately after I buy? There could be different reasons for the same. Let’s consider a situation when your analysis is correct and the stock falls immediately after you buy. As an investor, you might buy when there is pessimism. But, this pessimism might […]
Importance Of Margin Of Safety In Value Investing
What is the Margin of Safety in Investing? Why is it an important parameter Before Taking Any Investment Decision? Let us assume you have to reach the office at 9.00 am for an important meeting and your normal commute time is 1 hour. What could potentially happen if you start at 8.00 am? There is […]
What is the Lollapalooza Effect?
There are many extreme events in the world. These events can be explained with the help of the Lollapalooza outcome. Everyone defines the Lollapalooza effect differently. Charlie Munger, a renowned American investor, defines the Lollapalooza effect as ‘The most important thing to keep in mind is the idea that especially big forces often come out […]
Mean Reversion and its Importance in Investing/Trading
Mean reversion applies to different contexts such as economic growth, volatility, and asset returns. Mean reversion in the context of stock returns implies that the returns will eventually revert to the long-run mean. It implies that periods of above-average performance in stocks will be followed by periods of underperformance and vice versa. Let’s take the […]
Why Investing in IPO is a Disaster for a LongTerm Investor
1. Business owners have a better hand over investors in terms of pricing and thus wealth creation opportunity. Owners who own the business will bring the IPO’s only during good times so that they will get a better price for their Assets. Nobody wants to sell their assets at lower prices. There is no value […]