Importance Of Margin Of Safety In Value Investing
What is the Margin of Safety in Investing? Why is it an important parameter Before Taking Any Investment Decision? Let us assume you have to reach the office at 9.00 am for an important meeting and your normal commute time is 1 hour. What could potentially happen if you start at 8.00 am? There is […]
What is the Lollapalooza Effect?
There are many extreme events in the world. These events can be explained with the help of the Lollapalooza outcome. Everyone defines the Lollapalooza effect differently. Charlie Munger, a renowned American investor, defines the Lollapalooza effect as ‘The most important thing to keep in mind is the idea that especially big forces often come out […]
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 […]