The age of rumour and negative information - Market Commentary
- Satish Anand
- May 26 2020
Globally, News continues to be dominated by things about and related to Coronavirus.In this edition of the newsletter, we have covered:Important aspects of Health Insurance during COVID timesThe dynamics behind the negative oil price in the US on 21st AprilThe rights of a nominee with relation to assets of the deceased.India’s plan to create a manufacturing alternative to ChinaSteps taken by RBI to ensure liquidity in the Debt MarketsThe link to the April Newsletter is at the end of this article.Please...
A Tale of Two Friends
- Anup Bansal
- Apr 15 2018
Sensex fell by 410 points on Friday, March 23rd, 2018 - a more than five-month low according to one news headline. Since Jan 29, 2018, when the Sensex (36,283) and Nifty (11,130) indices touched their highest level ever, the Indian market has corrected by 10%. Besides several domestic reasons - BJP loss in UP bypoll elections, TDP pulling out of the NDA combine, Rs.11,000 crore fraud in the Indian banking sector, LTCG tax etc. - being attributed to the market fall, fears of global trade war due to...
May Newsletter - 2019
- Mitraz Knowledge
- May 31 2019
KNOWLEDGE - NEGATIVITY BIASSymptoms - Investors put more weight on bad news than good and react to negative events in a more than a proportionate way to good events.Examples - Investors do not feel confident to enter markets during/after a meaningful correction and fail to average out in that phase. They may also stop further exposure to a particular asset class/ instrument because of the past negative experience. Often, investors may feel overall unhappy about the portfolio even if the number of...
Did I miss the bus?
- Anup Bansal
- May 23 2019
The election uncertainty is over and like many news channels are saying, "The People of India have spoken". Hopefully, the rabble-rousing, the mud-slinging, the pot-shots and the name calling will subside and we will all get back to business at-hand.India has a vibrant democracy where the sheer size of the electorate - more than 850 million eligible voters - is mind-numbing. When ~70% people vote, the number of votes we are talking about is more than 550 million. To put things in perspective, the...
January Newsletter - 2019
- Mitraz Knowledge
- Jan 31 2019
KNOWLEDGE - SELF SERVING BIASSymptoms - The tendency to attribute favourable outcomes or successes to one's own skill/internal factors and attribute unfavourable outcomes to bad luck/external factors. Many times, outcomes can be bad because of our own wrong reasoning and not due to lack of luck. This is dangerous in the investment world because it stops us from improving our skills and creates overconfidence in our abilities to generate positive outcomes.Example - A Mutual Fund-Card always blames...
How to handle bad roads and traffic. Start Early!
- Anup Bansal
- Dec 31 2018
Sometime back when I was driving to work, I saw a car overtake me and speeding much beyond the prescribed limit. It seems the vehicle occupant was late for an appointment. Of course, as expected, he got stuck in traffic after some time and I pretty much caught up with him. I could not help but draw a comparison with investments. When someone starts late from home to go for an appointment, there is a tendency to drive fast. Similarly, when a person starts investing late, there is much more pressure...
We are all stories in the end, Just make it a good one!
- Anup Bansal
- Dec 8 2018
"Do Nothing Wrong and the Right Thing Will Happen"This is the headline from Chapter 6 of the book "the art of the good life" by Rolf Dobelli. I have taken an extract from this chapter as it is so relevant for prudent RISK MANAGEMENT."The downside is always more concrete than the upside. The downside is like granite - hard, tangible, solid. Whereas the upside is like air. Investors who have been successful in the long term, such as Warren Buffett and Charlie Munger, work with mental tricks, tools,...
August Newsletter - 2018
- Mitraz Knowledge
- Aug 31 2018
KNOWLEDGE - INFORMATION BIASSymptoms - The tendency to collect more information beyond a point that the information collected ceases to affect the decision that has already been made. Financial News Channels and Websites present investors with plenty of information every day and it is difficult to filter the material, relevant info from non-material info.Examples - Getting worried or influenced by daily share price or market movements or random company developments that usually contain no information...
