Mean Reversion and its Importance in Investing/Trading
Mean reversion applies to different contexts such as economic growth, volatility, and asset returns. Mean reversion in the context of stock returns implies that the returns will eventually revert to the long-run mean. It implies that periods of above-average performance in stocks will be followed by periods of underperformance and vice versa. Let’s take the […]
Why Investing in IPO is a Disaster for a LongTerm Investor
1. Business owners have a better hand over investors in terms of pricing and thus wealth creation opportunity. Owners who own the business will bring the IPO’s only during good times so that they will get a better price for their Assets. Nobody wants to sell their assets at lower prices. There is no value […]
Value Lies Deep
Deep Value Investing is like paying for the tip and buying the iceberg, an investment strategy that asserts choosing stocks that are cheap & offer great value because not everyone understands investing where the focus is on buying stocks at a much higher discount to intrinsic
Circle of Competence- A Mental Model To Avoid Disasters In Investing
The concept of the “Circle of Competence” has been used over the years by Buffett and Munger. Over the past 10+ years, I’ve researched and built up a base of companies that are in the business which I understand well and would like to own at the right value