tag:blogger.com,1999:blog-7148222695370746347.post8657260930117198335..comments2023-10-15T17:16:24.091+05:30Comments on Stock Market Charts | India Mutual Funds Investment: Some practical examples of Behavioural FinanceSubhankarhttp://www.blogger.com/profile/13248068905130821262noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-7148222695370746347.post-47465832194878498752010-05-07T23:04:59.080+05:302010-05-07T23:04:59.080+05:30My knowledge of behavioural finance is based on wh...My knowledge of behavioural finance is based on what I've read combined with my years of investing experience. Not sure if that can be translated to a PhD thesis.<br /><br />Here are a couple of article links that can help you along in your research:<br /><br />http://www.behaviouralfinance.net/behavioural-finance.pdf<br /><br />http://www.psychonomics.com/research/a&s/bflinks.htmSubhankarhttps://www.blogger.com/profile/13248068905130821262noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-16957603608903901122010-05-06T19:54:46.163+05:302010-05-06T19:54:46.163+05:30Hi Subhankar ,
Very good article and you have a gr...Hi Subhankar ,<br />Very good article and you have a great knowledge base. Presently I am working on my Phd on: " Behavioural Finance " Do you know of some books / persons who can guide me how to start the practical part of showing the impact of behavioural finance in Indian market scenario? I am waiting for your answer....CaesarUnknownhttps://www.blogger.com/profile/04301730578495185088noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-82004242929916289712009-11-14T22:05:35.958+05:302009-11-14T22:05:35.958+05:30If you read some of my blog posts, Ruby, you'l...If you read some of my blog posts, Ruby, you'll learn that I only take long-term views.<br /><br />The telecom sector in India - and around the world - have had their day in the sun. As growth slows and ARPUs continue to tumble, telecom services is turning into a commodity - with per second billing and number portability, and no longer deserve the valuations they have received so far.<br /><br />Value-added services might be the next growth area in telecom, but the service providers haven't nailed down a strategy yet.Subhankarhttps://www.blogger.com/profile/13248068905130821262noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-28872497065269297962009-11-14T16:34:29.534+05:302009-11-14T16:34:29.534+05:30Hi Subhankar,
I think you should take a long term ...Hi Subhankar,<br />I think you should take a long term view on Bharti Airtel...<br /><br />Just because its falling doesnt mean we should avoid....rubyhttps://www.blogger.com/profile/08063602532928160168noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-23330999802566724792009-11-06T21:50:13.251+05:302009-11-06T21:50:13.251+05:30Appreciate the kind words, Rishi.
You have been p...Appreciate the kind words, Rishi.<br /><br />You have been perceptive about Graham's thumb rule not working for FMCG companies. The 'defensive' nature of such stocks (they rise less and fall less) due to little debt and strong cash flows, cause high valuations.<br /><br />Technical analysis can help by studying long-term price charts. Since 2006, ITC has made several lows in the 140-180 range; HUL made bottoms in the 160-190 range. That gives you indicative entry levels in those two stocks.Subhankarhttps://www.blogger.com/profile/13248068905130821262noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-41219779098225669822009-11-06T18:47:50.357+05:302009-11-06T18:47:50.357+05:30Dear Subhankarji,
Behavioural Finance sounds i...Dear Subhankarji,<br /><br /> Behavioural Finance sounds interesting. Thanks for the article with examples, it helped in understanding the concepts better. <br /> Could you please suggest a rule of thumb for investing in FMCG stocks as they generally dont fit into the Graham P/E * P/BV < 22.5 rule. <br /> <br />Thanks<br />RishiRishihttps://www.blogger.com/profile/13418674527881171689noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-21090640601055848902009-11-05T18:56:28.067+05:302009-11-05T18:56:28.067+05:30@tax_trp: The article wasn't targetted at you,...@tax_trp: The article wasn't targetted at you, Mansoor. It was to point out behaviour patterns that cause losses in the stock market.<br /><br />'Waiting and Watching' is a great strategy for stock investments. It should be interspersed with occasional but decisive buying and selling. 'Praying' should be used only to meet spiritual goals.<br /><br />@Sumanta: Thanks for your comments.<br /><br />It is always a good idea to set a stop-loss when you buy. For fundamentally strong stocks for the core portfolio, the stop can be at 30%; for speculative stocks for the satellite portfolio, it can be at 5% or 10%. A bit of trial and error may be required, because volatility of each stock is different.<br /><br />Follow Graham's thumb rule of buying stocks only if P/E < 15, or P/BV < 1.5, or P/E x P/BV < 22.5, to avoid over-priced stocks.<br /><br />You can read Hersh Shefrin's "Beyond Greed and Fear" and Robert Schiller's "Irrational Exuberance".<br /><br />@ms: Appreciate your comments.Subhankarhttps://www.blogger.com/profile/13248068905130821262noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-37342163617609507372009-11-05T17:45:34.306+05:302009-11-05T17:45:34.306+05:30Good article sir. I wish to do my Ph.d in Bevaviou...Good article sir. I wish to do my Ph.d in Bevavioural Finance.Unknownhttps://www.blogger.com/profile/10915129970227118866noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-37712076455158838152009-11-05T08:22:31.867+05:302009-11-05T08:22:31.867+05:30Sir,
Thanks for another good post, practical one....Sir,<br /><br />Thanks for another good post, practical one. You nailed it exactly right as to how we don't act rationally while investing in stock markets. This post reminded me of the good book "Predictably Irrational" by Dan Ariely. Although that book talks about human behaviour in other life situations and also provides tools & techniques for better decision making.<br /><br />Coming to the topic on the post, do you think the following action would always help especially when we invest in the stock market?<br /><br />1. Whenever we buy (we always buy to start with), we should straightaway decide on the loss that we are willing to take beforehand and apply a stoploss accordingly? This looks like a simple thing to do but i have not been able to do it in a disciplined manner. <br /><br />2. Are there any other tools & techniques for better decision making against some of the bias you talked about in your post? Any good books/references on Behavioral Finance in Stock investing would also help.<br /><br />Thanks,<br />SumantaSumantahttps://www.blogger.com/profile/05075210194928602608noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-72273529476759513682009-11-04T21:29:22.417+05:302009-11-04T21:29:22.417+05:30sir,
This was one of the most difficult post i ha...sir, <br />This was one of the most difficult post i have ever read because i hold both the scrips discussed here, not large holdings but 5% each in my portfolio, bought recently,also honestly i acknowledge in me the behaviour mentioned in the said post,anyhow truth is always truth how bitter it may be.<br />Now let's wait, watch and pray for the respectable exit, i hope u dont write one more blog on my behaviour called "WAIT, WATCH AND PRAY"<br />mansoor panjwaniUnknownhttps://www.blogger.com/profile/14655727843733516053noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-79479885461696153292009-11-04T14:53:02.847+05:302009-11-04T14:53:02.847+05:30Check out my blog post of Oct 20 '09 ("A ...Check out my blog post of Oct 20 '09 ("A Parable about Cash Flows").Subhankarhttps://www.blogger.com/profile/13248068905130821262noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-6996026378996228052009-11-04T14:38:32.966+05:302009-11-04T14:38:32.966+05:30whoa! This IS scary. So, very quickly, what does a...whoa! This IS scary. So, very quickly, what does a -ve cash flow indicate?Jasihttps://www.blogger.com/profile/14267764047614537730noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-20049889032912880922009-11-04T14:25:07.671+05:302009-11-04T14:25:07.671+05:30One bad quarter, Jasi? How about five years of eve...One bad quarter, Jasi? How about five years of ever-worsening financial situation?<br /><br />Check the cash flows from operating activities - negative for the past 5 years (may be even longer). Right through the biggest economic boom in India, this company has been unable to generate a single Rupee in cash from its business!<br /><br />How are they managing? By taking on more and more debt. Nearly Rs 3000 Cr as of Mar '09. <br /><br />Either their business model is terrible, or they are siphoning off the cash. The management is definitely not the epitome of integrity.Subhankarhttps://www.blogger.com/profile/13248068905130821262noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-25750315895778421322009-11-04T14:07:27.475+05:302009-11-04T14:07:27.475+05:30Very interesting observations but you have raised ...Very interesting observations but you have raised a very good question abt Punj Lloyd. I mean really, do you sell a share based on just one quarter of bad performance? And it is not like everyone else if reaping in gains, its still early days after recession. Should not you take a contrarian approach in such conditions and may be stand to gain? For sure a quarter shud not be enough to make or break a Punj Lloyd.<br />Disclaimer -> I have investments in Punj ;)Jasihttps://www.blogger.com/profile/14267764047614537730noreply@blogger.com