Archives for 2011

Infosys was a great stock in March 2000, but has returned its investors only 32% since then.

HUL was a great stock 10 years back, but has generated returns of just around 34% over these years.

The list of such ‘great’ stocks is endless – stocks that were loved so much by investors but failed to return much over the long term.

Let me clarify one thing here – ‘great’ here means stocks that investors love so much that they are willing to pay any price to own them.

This makes ‘great’ stocks really bad investments for the long term.

Confused?
[Read more…] about ‘Great’ Stocks are Bad Investments for the Long Term

The leading American entrepreneur, author and public speaker Seth Godin has had a great influence on my life as a writer and thinker.

His snappy blog posts and pithy remarks on the irrationality we see around us are worth a read.

I recently came across his post about being stuck.

In this, Seth described four reasons we run into problems when trying to tackle any kind of project:

1. We don’t know what to do.
2. We don’t know how to do it.
3. We don’t have the authority or the resources to do it.
4. We’re afraid.

Well, these are four deceptively simple reasons to explain any kind of impasse on whatever we are working on.
[Read more…] about Investing in Stock Markets: 4 Reasons People Get Stuck

“Investors lose over Rs 2 lakh crore in two days over economic slowdown” shouted a leading business daily on August 19th.

The BSE-Sensex had plunged almost 700 points over the previous two days. That was not a small drop. It amounted to a 4.2% decline in the index.

Yet few headlines reminded investors that the Sensex was still up 98% (excluding dividends) from the market lows 2 ½ years ago.

But ‘2 lakh crore’ was made out to be a sensational figure, at least the way the headline was framed.

Of course the past few weeks have been very volatile for stock markets. But what is interesting is that this has led millions of investors to completely reverse their view on the future of equities.
[Read more…] about Are You Ignoring This Huge Risk to Your Investments?

“See I told you that the markets are going to rise,” was what the anchor’s face suggested as he read through his Friday market update on the business channel.

And why not, given that the BSE-Sensex’s 6.1% rise during the week gone by has raised hopes that what we saw during the past few weeks was just a passing phase of correction in stock prices, or so it seems.

“All is well!” the anchor said.

The expert on the other side of the table was confused whether he had just heard a statement or was it a question.

Anyways, he was called on the programme to give his views, so he said, “Well, I would say that things are definitely looking better now. And if people don’t buy shares now, they will regret after 18 months!”
[Read more…] about The Sensex can rise by 50%, or it can fall by 50%

Everonn Education’s stock tumbles 20% on arrest of MD

NALCO plunges +8% on chairman’s arrest

What do these news headlines mean to you?
[Read more…] about Do You ‘Own’ the Stock You’ve Bought?

320 runs. That’s what the Indian cricket legend Sachin Tendulkar has scored in his last 10 innings in England.

For someone who has a test match batting average of 56, with 51 centuries, spread over a record 181 test matches, the recent form must be a cause for worry.

Anyways, does this poor form over the past 45 days make Tendulkar a bad player? A majority of us would say, ‘No’.

But what about the poor run your stock market investments have seen over the past 45 days? The BSE-Sensex has lost 10% during this period.
[Read more…] about How Sachin Tendulkar Would Have Made You a Richer Investor