Do you know how many people investing and/or trading in equity markets truly succeed over long term? Success here means increase in wealth over their investing lifetimes. This group of people includes individual retail folks and professionals. I am sure many of us would have no clue. I do not have any hard core reference to share; however, I can recall reading various percentages that range from 1% to 7%. Without going in specific data points, my observation has been every time this is less than 10% of investing population. More than 90% of the folks will lose money in equity markets over their investing lifetime. Quite startling but this is very true.
We as individuals focus too much on one or two big time success or multi baggers, but ignore the importance of sustainability and consistency. We fall into the “Chalta hai” trap. Long term success is not built on few multi-baggers. Long term success is built on multiple average successes that are sustainable over time. Continue reading rest of this article…
Investor’s who use long term buy and hold philosophy use varied different ways to manage risk (such as allocation and diversification), monitor their progress, and performance metric. There is no single metric that can be considered as a holy grail of progress monitoring and/or performance measurement. Depending upon what is the objective and what you want to achieve is what will drive that performance metric. 
The current rally has added 98% to the SENSEX relative to March 2009 low of 8160 points. The rally is going on for last 5 months, the question is, what is fueling this rally? This rebound will make us believe it is start of next Bull Run. Any prudent investor will try to figure out what has happened since March 2009 that justifies this rally. As always, at hindsight everything makes sense.
At regular time intervals, I respond to the question asked by readers of this blog. Many of my post on this blog are inspired by such questions. Today’s post is in response to one such question. It is related to number of equity shares, equity base, and calculating EPS. I will use an example to discussion these aspects. So the question is reproduced below in verbatim.
In very simple terms, Non Convertible Debentures (NCDs) are a loan to the company issuing it. This loan, or NCDs, cannot be converted into equity. Public or Private companies issue NCDs to fund many activities such as growth plans, corporate expenses, pay out earlier loans, working capital, etc. I consider NCDs as a form of private or public sector bonds, depends upon who issues it.
Stock Market for 2010: What’s Your Prediction ?
As year 2009 is nearing completion, I have been reading new predictions and themes for year 2010. It is quite amusing to read what folks have to say. I always wonder do any of these forecasters follow their own advice. Could we take a peek at their portfolios? Here are few excerpts: Continue reading rest of this article…