There is one activity that an investor can never over do — reading.
But it’s important that you read things that build your knowledge and help you make better investing decisions. Avoiding the noise is as crucial as reading the timeless stuff.
In this post, we’re sharing few good pieces that we came across this week …
I would argue that an investor should have roughly equal doses of arrogance and humility to be able to perform well. The arrogance would allow him to stay apart from the crowd and believe in his own logic and objective reasoning, while humility would keep him grounded and not be seduced by hubris which would lower the quality of his investment decisions.
There are tens of thousands of investment funds. Most of their managers will be rewarded handsomely for being right. But they have a limited time frame and a limited number of strategies to prove their rightness. And the intersection of high stakes and limited options makes people believe deeply in whatever options they have in front of them. It’s the same as Hajaji’s reasoning, with orders of magnitude lower importance. That idea, I think, helps explain why so many smart people in finance do so many weird, irrational, things.
Going forward, the idea in making debt investments is: be ready for some risk. Funds in India are better regulated than banks – and will do a lot to ensure they maximize value for you. Kotak or HDFC can easily mark the bonds down to a low value and sell them to interested vulture funds at those low prices – and ensure you get some money back but not all. They’re choosing to try and get you paid in full after a while. This is noble, but it won’t always be the case; at some point, you will see funds selling out their bad investments and passing the loss to you. (That’s a good thing – you invested for liquidity at the end, not to pray to Lord Chandra to please return some of your money)
On 18 March, L&T announced its plan to launch an open offer to buy an additional 31% in Mindtree after agreeing to purchase Café Coffee Day founder V.G. Siddhartha’s 20.32% stake in the firm for ₹3,269 crore. L&T also said it would buy 15% stake in Mindtree separately from the open market.The transaction, if completed, will see L&T buy up to 66.32% in Mindtree at ₹980 per share, making the three-part deal the first hostile takeover in the Indian IT industry.
If you’ve read something interesting, feel free to share it with us.