It is easy for fund managers and television anchors to talk about index being at a pe of 15…but let us not fool ourselves. There are many shares at pe of 58 and 38 – L&T, Tata Power to name a few. How does one deal with these companies? Well a little differently. Why should […]
For many of us who deal with life insurance, we dread the call from the client’s nominee asking for a claim form, do we not? However, do we expect a call from a client to say “Thanks for the term life insurance that I took from you last year, I am alive, but am […]
Why are gold prices going up? There is actually only one answer – the demand for gold is greater than the supply. In fact this can be the only reason why the share price of any product goes up. Let us look at some reasons why gold prices have been going up – and I […]
Investors face all kinds of risks in the financial markets.There is credit risk – the risk that a borrower will default on an obligation. Liquidity risk – the possibility that you will not be able to convert a security into cash when you need the money. Market risk – the likelihood that the share market […]
Yesterday a simple question in the parliment made Icici bank scrip lose about 10% of its value – and recovered 5%. What really happened is a simple accounting necessity for marking down the investment. Let us take an example, I have “bought” a CDO (collatarised debt obligation)- this is a bunch of borrowers of a bank securitised […]
When markets fall, Price Earning ratios correct. Including the PE ratios of candidates who attend job interviews! Already one is hearing about a big broking firm closing down 100 branches. I have lost track of how many branches they have, so this is an absolute number and not a relative number. What it means is […]
A senior executive from a leading private sector bank met up for lunch. One of the topics that came up was “Will gold prices go up?”. He immediately said, YES, it will shoot up if we sell more gold. Intrigued, I asked him to explain. He told me a story of one PYT that the […]