finance
-
The Information Curse
Recently, an investor told me that he is selling underperforming funds and buying those that have performed. Perfectly rational thinking – Or is it? Today we’re inundated with near-real-time information. Investors can track (and obsess over) daily NAVs, and financial channels and influencers amplify this multi-fold. This noise makes us forget that markets are cyclical,… Continue reading
-
The Comfort Trap
Indian companies have record cash reserves. Banks have clean balance sheets and want to lend. Yet private Capex remains subdued. Instead of leveraging excess cash and cheap loans to invest, companies are hoarding cash, buying government bonds, or returning money to shareholders via dividends and buybacks. So why is this? The usual excuse is poor… Continue reading
-
The Madness of Crowds, Version 2026
The most talked-about event in recent days has been the SpaceX listing. Every day, there are stories about Elon Musk’s net worth, and how he made more money in a single day than Warren Buffett made in a lifetime. The SpaceX frenzy is not an isolated event but the latest episode in the unparalleled boom… Continue reading
-
Markets, Madness and Melody
The “Efficient Market Hypothesis” (EMH) became hugely popular in the seventies and influenced market thinking for a long time (it still does). Essentially, it postulates that markets are efficient, and prices reflect all available information at any given time, so outperformance can only be achieved by taking more risk. EMH gained popularity because it was… Continue reading
-
The Index Is Flat. The Market Isn’t.
Markets rarely behave the way we expect them to. From a Covid low of <26k in March 2020, the Sensex crossed 70k in December 2023, and peaked around 86k in September 2024. Many believed the party would never end. But since then, the index has stayed in a range of 73-86k for almost two years.… Continue reading
-
Fully Charged. Fully Priced?
In the last few years, India has significantly ramped up Capex in the power sector, be it solar, grid connectivity, transmission and distribution infra, and more. Total power generation capacity more than doubled from 248 GW in 2014 to 520 GW today. Within this, solar has jumped from 2.8 GW to 110 GW. The transmission… Continue reading
-
Banks Are Not Dinosaurs — Yet
I recently read an article claiming that fintechs and NBFCs will use AI to dominate lending, while traditional banks fade into irrelevance. It sounded plausible at first. But the more I thought about it, the less convinced I became. The essence of the argument is as follows: Today’s consumer wants speed and convenience (i.e. instant… Continue reading
-
Ignore the Noise
One of the hardest lessons (for me) as an investor has been how to ignore unsolicited investment advice, especially at chaotic times like this. As the US-Israel vs Iran war grinds its way into Week 3, the world is facing an unprecedented energy shock. Large supplies of oil, gas, aluminium, and fertilisers cannot move because… Continue reading
-
5 Things I Learnt About Inflation
On 12th February, the government announced a new consumer price inflation (CPI) series. The earlier CPI used 2012 as the base year; the new one uses 2024. This was much overdue. Consumption patterns have changed dramatically since 2012. The old series still tracked stuff like VCRs and cassettes, which are pretty much extinct. Digital expenditure,… Continue reading
-
So much noise. So little clarity.
Back after a short vacation, the headlines suggest the world has been reinvented – again. Before we could digest the India-EU FTA, the Budget was announced. Then, out of the blue, came the India-US trade deal. The Sensex didn’t like the Budget, but loved the deal, expressing its emotions in no uncertain terms. In the… Continue reading
