Tuesday, March 07, 2006

Excellent Compilation

"Hindsight bias ;"
"EARTHQUAKES share some characteristics with financial markets. Both follow a power law.;"
"Hedonic treadmill;"
"opportunity-cost principle in economics;"
Gordon's dividend model;preference reversal
"recognition heuristics"
Black and Scholes (B&S) model
Game theory studies how we take decisions to maximise our benefits (payoffs).
"When alpha becomes beta "
"Physics of finance "
"The theory of allocation of time".

This are some of the phrases from the articles at Business Line. They are short, crisp and educative. Some with science background will also enjoy.
The link http://www.blonnet.com/iw/2005/03/20/stories/2005032000
641300.htm

http://www.thehindubusinessline.com/cgi-bin/bl2005.pl?mainclass=97&subclass=726

Monday, March 06, 2006

When to sell ?

If you have been an investor since many years, chances are you would have made lot of money if u would have held on to your good stocks. The question arises , when to sell. Well it is not easy unless u had predecided goals for yourself. There are many good advisors telling different strategies, but I think the following are worth considering.
1) If you need money , then sell.
2) If your asset allocation was pre decided, sell equities to balance your portfolio. Increase your exposure to gold, debts etc.
The second strategy is best , because it minimises your risk and maximises your returns in numerous ways.