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Rakesh Jhunjhunwala Ppt

July 13, 2011 6 Comments

wealthymatters.com

Here is a power point presentation dating from Rakesh Jhunjhunwala’s 11 Aug 2007 meeting with IIT -Mumbai students.I happened to find it by chance today.And it’s still worth a read.When you have a spare 15 minutes do flip through the presentation.

http://www.authorstream.com/Presentation/lakkaraj_kk-115602-rare-analysis-presentation-rakesh-jhunjhunwala-celebrities-ppt-powerpoint/

Filed under Paper Assets, Theory Tagged with IIT, postaday2011, Rakesh Jhunjhunwala, RandomBlog2011, stock investor, stock trader

Confusing Uncertainity With Risk

March 4, 2011 Leave a comment

Here is an extract from the article ‘ Investors will miss out if they confuse uncertainity with risk ‘ by Whitney Tilson published in the Financial Times on 16 Feb 2008.I think confusing uncertainity with risk is precisely what happened pre-budget in India this year. And this confusion is something that happens to a greater or lesser extent every year before the budget.The same thing happens before the final decision is taken on any government policy. So if a stock investor remembers that there is a difference between uncertainity and risk he/she can sometimes buy shares cheap.Risk means the chance of a loss of capital. Uncertainty is the range of different outcomes. So a stock may have high uncertainty but may not be risky, if no one knows what will happen but the worst case scenario would not results in a huge loss.

“Dealing with uncertainty is always a key challenge for investors. But dealing with uncertainty doesn’t mean avoiding it – on the contrary, it is often fuzziness about a company’s future that creates the type of opportunity bargain-hunting investors cherish.Wall Street in the main hates uncertainty, which manifests itself in depressed share prices of companies whose prospects lack “visibility.” But where the market can err is in confusing uncertainty with risk. Just because a company’s future is highly uncertain doesn’t mean an investment in it is risky. In fact, some of the best potential investments are highly uncertain, but have little risk of permanent capital loss. As hedge-fund manager Mohnish Pabrai describes it in his book, The Dhandho Investor: “Heads, I win; tails, I don’t lose much.” Read more of this post

Filed under Paper Assets, Theory Tagged with bankrupt, bargain hunting, buying opportunity, debt fuelled consolidation, debt load, debt problems, doubling share price, Financual Times, free cash flow, Funeral Home Operator Stewart Enterprises, government policy, least likely to fail, Monaish Pabrai, permanent loss of capital, pre-budget, probability, Risk, share investing, stock investing, stock investor, stock share, The Dhandho Investor, Uncertainity, Whitney Tilson

Psychology And Bad Market Timing.

February 21, 2011 2 Comments

Every stock investor whether a technical or fundamental or value investor ultimately needs to take a call on whether he/she wishes to buy or sell at the price Mr. Market sets at any given time.How much an investment ultimately nets a person depends on the timing of the buy and sell decision and the actual price at which the transaction takes place,despite all the theories of averaging out and time in the market and reversion to the mean.

The following is a checklist of mental mistakes that may affect a person’s decision to buy or sell and cost a him/her dearly. The checklist is from Whitney Tilson’s presentation ‘How to Avoid – and Profit From – Manias,Bubbles and Investor Irrationality”

•Failing to Buy

–Status quo bias

–Regret aversion

–Choice paralysis

–Information overload

–Hope that stock will go down further (extrapolating recent past into the future; greed) or return to previous cheaper price (anchoring)

–Regret at not buying earlier (if stock has risen)

•Office Depot at $8 (vs. $6) Read more of this post