Investment bankers focusing on public markets have their swagger back after a hiatus of three years. They have an important role to play in the capital markets ecosystem, they are the folks who facilitate liquidity events for corporate India. Those who provide risk capital (PE, VC, other investors) to entrepreneurs when they need it the…
This post is a slightly modified version of my original post on valuepickr a few months ago You can read that here https://forum.valuepickr.com/t/towards-a-capital-allocation-framework/504/86 I have further built further upon some of the points there, especially those related to the behavioral and more personalized aspects of the asset allocation thought process. The investing world is various shades…
No investment blog is complete without an analysis of the investing mistakes one has made. My early mistakes were all schoolboy level mistakes that can be eliminated with a good investment process. The mistakes to worry about are those that one can make even after having a good investment process. The kind of mistakes that…
Common knowledge is not what I know or what you know. Common knowledge is what everyone knows that everyone else also knows. A simple concept that is central not just to game theory but to the financial markets too. Without the concept of common knowledge, it is difficult to explain why markets are the way they…
Fintech should be a lot of tech and a little bit of fin. The successful models so far have been on payments and other transactional elements where technology can make things faster, cheaper and more reliable. But when techies start dabbling into areas like lending and designing investment portfolios, things are no longer that simple…
This has been the trajectory of my net worth, expressed in NAV terms since 2014. My net worth is up almost 7.5x over the 7-year period, it has grown at a rate of 32% p.a. Please note that this is not the return on my equity portfolio, this is the rate at which my net…
Everyone wants to be a bodybuilder; nobody wants to lift no heavy ass weights” – Ronnie Coleman Pearls of wisdom can sometimes emerge from unlikely sources. For the record Ronnie Coleman is arguably the greatest bodybuilder of all time, he was Mr. Olympia for eight years in a row. He started off as a powerlifter…
Diversification is a fundamental concept of modern portfolio theory that has been drilled into our consciousness since the day we started thinking about investing. Don’t have all your eggs in one basket, contain portfolio risk by investing into a basket of securities across asset classes. The benefits of diversification are contingent on the securities not…
Mistakes don’t happen in a vacuum; you cannot win if your opponent doesn’t make mistakes. A Magnus Carlsen quote after beating Viswanathan Anand in a game of conventional chess. Carlsen put Anand under sustained pressure for over 34 moves before Anand made a blunder under time pressure. Watch the 2020 French Open men’s final. Nadal…
Use principles of reduction to avoid most avoidable mistakes. This is not the first time, neither will it be the last time you will hear me say this. Let us get around to defining what investing is NOT This list can go on but the big message is that investing is not what business news…