Reblog – Getting to Zero: Value and Risk Management

Why it’s valuable to calculate how your investment price can go to zero

“Any time you manage other people’s money, risk management should be defined as preventing the permanent impairment of capital. Nothing can be riskier to an equity investor than losing all your money. Anybody who loses sight of this is – quite frankly – both a terrible fiduciary steward and value investor.” – Duncan Farquhar

In a recent article, Science of Hitting discussed the difficulty in adding to your position after Mr. Market plays havoc on the stock’s price and valuation. Making the decision to double down is tough for several reasons.

Reblog: Jargon Buster

We’ve created our Jargon Buster to explain some of the most commonly-used investment words and terms.

Active management

An actively managed investment fund is one where your money is invested in a portfolio of assets selected by a professional fund manager. Each fund manager constantly monitors companies, economic conditions and markets, and decides where it’s best to invest to meet the investment fund’s objectives.

Reblog: 1980 to 2014: Sensex Vs. Fixed Deposits, Gold & Silver

While this article may seem dated, it does not in any way diminish the importance even at this point in time.The article has been written by D. Muthukrishnan (Muthu) and can be found on his blog

The article has been written by D. Muthukrishnan (Muthu) and can be found on his blog here.

For last 3 years, I’ve made it a practice to give performance comparison of various asset classes- Sensex (Equity), Fixed Deposit (Debt), Gold and Silver and the impact of inflation on them beginning from the financial year 1979-80. Why 1979-80? That is the year from which Sensex came into existence with a base as 100.