Setting the context: Howard Marks is a legendary billionaire investor and has received acclamations for his memos by Warren Buffet himself. He is the Co-Founder and Co-Chairman of Oak Tree Capital Management and has about 50 years of investing experience under his belt. Through his books “Mastering the Market Cycle” and “The Most Important Thing”, […]
Author: Prarthana Shetty
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Monetary Policy Introduced
Setting the Context: In this week’s article, we shall go over “What Monetary Policy exactly means? What are the types of monetary policies at the bay of the Central Bank? What are the challenges that arise in implementing them successfully? Then finally, a mini snapshot is presented on India’s policy response to the pandemic. What […]
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Derivatives 101
Setting the Context Derivatives are part of the Alternative Investment asset class and provide a very interesting dynamic in hedging investment portfolios. In this week’s article let’s go over “What exactly Derivatives are?”, “What are Forwards, Futures and Options?” and examples of using Forward Contracts and Call Options as hedging instruments. What is a derivative? […]
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Hedge Funds 101
Introduction This week, let’s gain a good understanding about “What exactly Hedge Funds are?”, “What they do?” and “Who they cater to?”. Hopefully by the end of this article, you’d associate the term “Hedge Funds” with more than just fancy cars, an elite lifestyle and humungous mansions (that’s what most movies portray right?) Alright, let’s […]
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Introduction to Economic Cycles
INTRODUCTION This week, let’s focus on getting the basics of an Economic Cycle right. When you’re through with this article, you’d no longer feel lost when the wizards on Financial Times say stuff like “Expect a serious economic contraction in Q2 of year 2034″. Alright, let’s jump right into it! What is a Cycle? A […]
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Shapes of Economic Recovery
In order to understand the behaviour of the economic recovery from the COVID-19 pandemic, the different shapes of recovery has been a hot topic of discussion in most forums. Howard Marks draws a beautiful analogy in his memo stating, “The government will provide life support to the economy during the coma and bring the patient […]
Part I gave a good introduction to what Behavioural Finance actually is. As a recap, Behavioural Biases can be divided into two categories namely, (I) Cognitive Errors and (II) Emotional Biases. In this post, let’s delve deeper and understand what our “Emotional Biases” are shall we? EMOTIONAL BIASES Emotional Biases are the types of behavioural […]
Setting the Context: Just like investors analyse different asset classes to allocate their investments, another style of investing is observing the exposure of the investment portfolio to different factors. Factors are the drivers of return across different asset classes. For example, consider growth of GDP, it’s pretty intuitive that when an economy is performing well, […]
SETTING THE CONTEXT So, in the previous two posts in the “Behavioural Finance Series” I had provided a brief introduction on the topic of Behavioural Finance, its distinction from the Traditional Finance Perspective and covered an overview of different types of Emotional Biases. If you’ve not already gone over those articles here’s the link, Part […]
This week’s post is going to explore a topic I’ve perpetually been fascinated about – “Behavioural Finance”, specifically the various biases we might fall victim to! INTRODUCTION To provide you some context, Traditional Finance [TF] assumes that investors are “rational” decision makers and have access to perfect information equally. It characterises investors as risk averse […]
Coffee Time Finance 