Category: Excerpts

Source: Vijay Pahwa

Source : The Ken

Bad startup investments are par for the course. There’s even a commonly used term for them: lemons. 

Thus the VC adage, “lemons ripen faster”.

Meaning, bad investments tend to become apparent faster than good ones.

True for listed investments also

Source : Mint

 “Market kya lagta hai?”, at least in the Indian context, is a futile preoccupation. 

Samplethis: MSCI India barely produced any return in dollar terms for 10 years between November 2007 and November 2017.

If, in November 2007, one had gazed at the crystal ball and said that the market would yield nothing for the next 10 years, the statement would have been apocalyptic, but that’s what actually happened.

And not even the staunchest bear would describe the last 10 years in Indian equity markets as apocalyptic.

That’s because over longer time horizons, money is made or lost in individual stocks whose performance does not have much to do with what the broad market does. 

Despitethe lost decade for the headline index, 86 stocks, with market capitalization in excess of $500 million, quintupled over that time frame (multiplying five times in 10 years implies a healthy compound annual growth rate, or CAGR, of over 17%) .

We keep reiterating that our basic unit of thinking is stocks and not market averages. Like all investors, we own stocks in our portfolio and not index futures.

Source: Karvy’s India Wealth Report 2017

Hat Tip: Ian Cassel