Bet On Sure Things
April 26, 2013 1 Comment
Both investments have an 8 percent average annual return. But Investment #1 has a wide range of returns, while Investment #2 has a stream of returns that more tightly hug the average annual return.
If each of the points on the charts represents a monthly return and both investments achieve the same end result, which investment should you choose?
The answer: Investment #2 — the one with the tighter distribution of returns since it gives you a higher probability of achieving a higher return. Read more of this post
Here is the transcript of Rakeshji’s interview on ET NOW of the day before yesterday for those of us who didn’t manage to catch it alive:
For a while now I have been expecting the stock markets to tank and keeping aside a lot of cash to go bottom fishing. I thought that the S&P downgrade of the US would be the trigger event.However as things panned out,at the time the markets didn’t slide as much as I expected.But in the time since then my expectations have come to pass.Meanwhile I’ve been assailed by doubts so often during this time that I’ve considered just rushing in and buying stocks for fear that I might not get a lower price.The video below also added to my doubts at the time but it has also given me a way to deal with doubts for all time.I just have to remember
Below is a favourite but somewhat dated Rakesh Jhunjhunwala interview.I frequently revisit the article to read about how he started out.Every time I wonder how I might be able to do what I want to do with so few resources,I find reading his story inspiring.Also I like his way of limiting risk,dealing with loss , having flexible targets and dealing with unfavourable opinions.The red ink is mine.It’s to highlight the parts I find interesting.As a side note,I also like reading the account of the 1993 blasts,if for no other reason than to remind myself about the spirit of Mumbai and the grit of all Mumbaikars. 
