Some excerpts from my annual review to subscribers. Hope you will find it useful
Sources of outperformance
Superior performance versus the indices can usually be broken down into three buckets
- Informational edge – An investor can outperform the market by having access to superior information such ground level data, ongoing inputs from management etc.
- Analytical edge – This edge comes from having the same information, but analyzing it in a superior fashion via multiple mental models
- Behavioral edge – This edge comes from being rational and long term oriented.
I personally think our edge can come mainly from the behavioral and analytical factors. The Indian markets had some level of informational edge, but this edge is slowly reducing with wider availability of information and increasing levels of transparency.
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This hard hitting article is written by D. Muthukrishnan (Muthu). The original post can be found here.
I was reading this article written by Vivek Kaul.
A bungalow in Nepean Sea Road, South Mumbai was bought for around Rs.1 lakh in 1917. It is now going to be sold for Rs. 400 crores. The value of the bungalow has multiplied by whopping forty thousand times in 100 years.
Real estate is always discussed in terms of how many times it has multiplied. Rarely anyone in that industry calculates XIRR or annualised returns. 40,000 times in 100 years when expressed in terms of XIRR is 11.3%. Not a bad return at all. But nowhere as glamorous as saying 40,000 times.
Many tell me something like that the property they bought 25 years ago has multiplied by 10 times. Sounds fantastic. But the annualised return works out to 9.6%.
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The Honourable Finance Minister presented the Annual Budget 2016 today (February 29, 2016) in the parliament. While he touched upon a lot of points, here is a brief on what the budget holds for the different sectors in the stock market and some specific scrips that would be affected.
Food
- 4 new schemes to enhance dairy-farming in India at Rs. 850 crores. A positive for Prabhat Dairy
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