An article on our own @basumallick
An old article from 2010, interesting correlation with rogue waves. Peak and trough generally of same size, once the cycle is complete, past peak has no bearing on the normal cyclicality that market returns to.
Strange as it is, when the markets were going up, good times were to last forever, and never worried about where markets will go next – well, it was to go up only right!, now that it is correcting i suddenly am feeling this pressing urge to seek all the holy /exotic technical stuff that will quench my thirst to know where the markets are headed next. Trying to alleviate this anxiety and control my nerves and let markets behave like markets :). Oh well, till that time, here is another interesting take on forecast using Hurst cycles that was pretty much on target, as per David guidance is that US markets are in long term decline till 2020:
This is definitely an interesting article if not great one to qualify here.
Not trying to influence or discourage anyone, however, knowing things from a different perspective will certainly help us to understand what we know and what we don’t.
Monish Pabrai’s Q&A session with Dakshina youngsters. A good way to remind each one us where we have to be focused and at the same care for the society around us in some meaningful ways.
Confidence tricks. Affirmation that ‘body language’ is not an indicator of business prospects.
https://americanaffairsjournal.org/2018/02/private-equity-overvalued-overrated/ great article IMO trying to understand financial engineering
Review: Skin in the Game by Nassim Nicholas Taleb — down with the ‘Intellectual Idiots’
Never trust advice from experts who aren’t risking their own necks, says this forceful book. Matthew Syed is mostly persuaded
‘Do not pay attention to what people say, only to what they do, and to how much of their necks they are putting on the line,” says Nassim Nicholas Taleb. This is the guiding principle of his new book, Skin in the Game.
When it comes to people offering advice on stocks and shares, Taleb says: “Don’t tell me what you think. Just tell me what is in your portfolio.” Don’t listen to supposedly disinterested financial advisers, pundits and journalists who are not exposed to the consequences of their advice. Taleb argues that it is more worthwhile to listen to pundits with stocks and shares and who are risking their own money.
“Skin in the game comes with conflict of interest. What I hope this…
I am posting Buffett’s annual letter here Warren Buffett - Letter to shareholders for 2017
I credit Buffett with nearly all my returns since 2001; and they have been satisfactory. Thankfully he does not charge a fee on his advice
This letter was shorter than usual. What I found most interesting was the bet with Protege Partners made in 2007 for $ 318,250 (or $ 500,000 in 2017). The bet was that in the long run index funds beat any other hedge fund. Protege could choose any five funds from the universe to beat the dumb and inactive guy - the S&P 500. Protege chose 5 fund-of-funds, which in turn had access to 200 funds. Each of these fund-of-funds could change these funds anytime.
Protege had access to the whole of Wall Street, chose the most intelligent, hardworking and confident fund managers.
At the end of 10 years however, the S&P 500 beat every single fund-of-funds handsomely.
The interesting story is not that the index is difficult to beat. The more interesting story is that the fund managers made a lot of money, even as the investors lost (relative to Index)! They could as well have put their money in an index fund, saving on fees as well as making returns.
Then there is something even more interesting.
At around 2012, both Buffett and Protege decided to take their outlay which had a yield to maturity of just 0.88%, and invested in BRK.
Bonds were at more than 100 times PE, whereas just the dividend yield was 2.5% and certain to grow. Buffett also underwrote any downside in case of an exceptionally weak market. The effect was that $ 1 million became $ 2.2 million.
It tells me that valuation should not be looked at in isolation to the interest rates or the bond markets.
In India, the 10 year yield is at a PE of just over 13.3, and the Nifty is at a trailing PE 22.4, with a dividend yield of 1%. That’s a premium of ~ 68%.
This is unlike the US where bonds were at about 40 PE and S&P 500 at about 20, a discount of 50%. Possibly that’s the reason he says US stocks are not overvalued in relation to interest rates.
A article about our VP Sh Aveek Mitra ji
Good memo to read to understand base rate of finding quality businesses. This table in the memo reminds us how difficult it is to find businesses with consistent earnings growth over a long duration. The probability of that is not more than 10% over 10 -15 year period. Also the probability a businesses exhibiting a negative earnings growth is between 30% - 55% , quite high. I found this little piece of information quite enlightening.
But nobody starts with the entire universe of stocks. After filtering using reasonable criteria, I think the probability of finding a decent compounder would increase drastically.
good insights. Especially the one which relates to scaling up. Indian businesses find it very difficult to scale up and those that do seem to be more the exception rather than the norm.
How labour regulations affect manufacturing in India
Ten lessons from Buffett for investors by NANDINI VIJAYARAGHAVAN dt 15th Mar 2018