Archive for the 'Risk' Category

Risk is NOT volatility

Many people confuse risk with volatility. Volatility is not risk. It is like saying that the sea having waves is risky. If you build a ship and sell it saying ‘this ship will sail well when there are no waves’ – sounds like a joke, right? This is so bad that ‘Risk adjusted return’ is […]

For your protection…..

  You bought a policy in 2007 for a sum assured of Rs. 25 lakhs. You have paid premia for 2007, 8, 9, and 2010 by cheque. You paid the premium for 2011 by cash. Great, the policy is in force. In Jan 2012 you die. The family sees the policy and calls the agent. […]

Risk is normally not visible…

The problem with risk is it is generally not visible. In most cases we wish to avoid it by PRETENDING that it is not there, or ignoring our inner voice which keeps telling us that there is risk. The worst thing is Risk is counter intuitive. Let me explain. In 2007 end and perhaps the […]

Sorry, but do you understand what it means?

Here are some axioms, sayings, postulates, ….which people use (well almost indiscriminately) ..let us see if we really do understand what it means? 1. Mutual funds are professionally managed. 2. This company is professionally managed. 3. You cannot look into the rear-view mirror and drive. 4. To spread the risk, it makes sense to diversify […]

American Lifestyle

Sadly there is not enough research on the financial behavior of Indians. On the other hand there is a lot of research in the US about American earning, spending and investing pattern. It is NOT possible to just do a cut n paste of the American behavior patterns, and THEREFORE one cannot just accept the […]

The airline story…

The airline business makes money only for the aircraft manufacturers, airports, food suppliers…rarely for the airline. This post is about the attitude of the employees of Jet airways, Kingfisher and Air India. On my last trip when I was at the airport waiting to get into an aircraft…and could not find a newspaper..suddenly one of […]

Being prepared for risk….

A few days ago I did a post about risk….here are some solutions.. 1. If husband and wife are working in the same industry or worse in the same company, try to change the situation, NOW. 2. Take a stand alone or a floater MEDICAL INSURANCEĀ  policy for say Rs. 3 lakhs for self and […]