[4:40 PM, 10/23/2019] Jiten Patel: Sun Tv the WISDOM OF THE CROWD AVERAGE PURCHASING price @409/-....
On 20/9/2019 Sun Tv made a low of @390/- and went way below my Wisdom of the crowd Purchasing Price....
In Jan 2018 Sun Tv made a lifetime high of @1098/-
Today it is @515 after making a Low of @390/-.....
Note the price of Sun Tv can go to zero also and anything can happen.....
It is my personal opinion and view only and not a recommendation to buy or sell and I reserved to be proved otherwise also...... please consult your Financial Advisor.......
[4:54 PM, 10/23/2019] Jiten Patel: But as such at Lower Valuations and value for money Poor Investors are coming in flocks to sell are Current prices as if there is no Tomorrow..... the more these so called Poor Investors are selling and taking the price still further downwards still the stock becomes cheaper and cheaper......
In long term if the Stock performs as per its long term trajectory ......than the rate of return in the future if purchased at lower cheap prices today..... will be very good.....
[4:59 PM, 10/23/2019] Jiten Patel: There are 6000 companies in stock market and as such so many companies stock prices must be hitting my WISDOM OF THE CROWD AVERAGE PURCHASING price....... which i am not even aware of because i follow very few selective companies.......
[1:04 PM, 10/25/2019] Jiten Patel: How Biological Evolution..... Economic Evolution and Financial Investing Evolution are correlated.....
Few days back I had started to read a new Book...... and found it very interesting.....
In the book the author mentions and tries to correlate how the process of Biological Evolution and Economic Evolution are similar....... what the author means that we are in a constant process of Evolution and as you all know that the organisms living on this planet are continuously Evolving for survival and passing their genes and DNA to the next generation......the organisms which do not adapt and change as per the natural process of evolution are wiped out of the planet and their existence is completely extinct.....
Same way the Economy Evolution works...... products and services which are outdated are completely wiped out and new form comes in to existence......
Typewriter..... Artificial intelligence..... Bullock cart.... Digitalization..... sanskrit language..... Medicines.....and many more products and services fall in this category which got extinct and wiped of......
So to keep on changing and evolving is the key to future growth and survival and success and it is a on going process......
The same rule is applied in Financial Investing.....if you don't evolve your style of INVESTING.......your existence is completely doubtful in the Long Run......
So continuously you have to evolve and change or fine tune your system and process which you adapt in financial INVESTING.....
Because as the law says those who evolve and change have a better chance of survival.....
[10:36 PM, 10/27/2019] Jiten Patel: Happy diwali wishes to you all and all your family members.......
[9:57 PM, 10/31/2019] Jiten Patel: Disposition Effect - an anomaly in behavioural finance
Hilaire Gomer
14:00, 5 September 2017
The disposition effect in behavioural finance is one of the many biases or partialities that people are influenced by when they make imperfect decisions, particularly in investing and market trading.
The disposition effect describes how investors often sell shares whose price has risen when they might be holding them in hopes of higher gains. To an extent the investor ‘taking profits’ is logical and healthy.
However, selling after a short time to avoid possible future loss can deny the investor financial gain.
But, the flipside of the disposition effect is even worse. Investors tend to hang on to investments, shares, commodities and the like, when these assets have dropped in value.
Trying to be rational all the time
Rather than admit failure, or through sheer inertia, investors with the disposition effect neglect the shares and let them tread water indefinitely.
Rationally, it is best to sell these poorly performing items before they decline further and then re-invest the proceeds in fresh, researched, ventures with the expectation of making money.
The rational and emotional reactions that make investors practise the disposition effect has much in common with another bias, ‘loss aversion’.
As with the disposition effect, this bias says that people don’t wish to risk loss, even though they might acquire equivalent gains. They feel it is better not to lose £5 than to find £5 even though both are actually the same.
This is not so surprising as psychological studies have shown that people feel losses twice as much as they feel gains. Investors want to avoid losses at all costs, so they exhibit risky behaviour by holding onto duff shares.
They are loss averse, so they sell shares too soon before they even begin to show signs of further upward movement.
Disposition Effect is centre stage for investors
Cognitive and social psychology academics Nicholas Barberis and Wei Xiong describe the disposition effect as one of “the most robust facts about the trading of individual investors.”
They say the disposition effect is common in individual investor trading and is linked to pricing phenomena, such as post earnings announcement ‘drift’, and stock level momentum.
This bias also extends to the real estate market, where properties that don’t sell hang around for months or years when common sense would dictate in that in many cases the seller should reduce the price and sell.
Prospect theory and aversion bias
This brings us to Daniel Kahneman and Amos Tversky’s ‘prospect theory’ of 1979.
People hate to lose. Losing, we learn, is much more of an emotional event than gaining, to such an extent that people prefer not to risk gaining for fear of losing face and being disappointed.
Professor Barberis, has noted: “Stocks that have done well over the past six months tend to keep doing well over the next six months; and that stocks that have done poorly …… tend to keep doing poorly over the next six months.”
Why is the disposition effect so strong that investors keep doing the exact opposite of what they should do – sell the poor shares and keep the good ones?
Why do investors think the odds don't apply to them
Why do investors think the odds don't apply to them? Source Shutterstock.
Barberis and others have come up with some queries for the investors irrational behaviour. For example active investors are often outperformed by passive, longer term investors. What is the significance of this?
Why, he asks, do buyers think they know something the seller doesn’t? Why do investors think the odds don’t apply to them? Why do they think they are the exception to the apparently obvious rule? Why are they so confident?
The culpable bias – over confidence
A lot of bias boils down to the problem of over confidence. Kahneman and Tversky reckon that over confidence is a big culprit in making poor assessments. In other words, a lot of us believe the glass is half full and will stay that way, but often neither of these things fit the facts.
A mental solution to the problem does exist. It is called ‘hedonic framing’ which may be worth a try. The idea is that the person or investor fools their prejudices by making themselves think of a single, large gain as parcels of small gains, and to think of small losses as a single, large loss.
Also this solution suggests that people might think in terms of parcelling up different-sized losses into a more attractive net minor gain.
[10:38 PM, 10/31/2019] Jiten Patel: Market moves in Cycles...... and Instant and Delayed Gratification......
Presently where the current market is standing it is important to note that we have almost completed 60% of the total Uptrend cycle which started in 2008/2009 bottom....
We are still far away from the completion of 100% of Uptrend market cycle which as per my perception and view should take 3/4 years to complete and reach the Euphoric Market Top....
What i mean is that the market cycle from Bottom to Top is still incomplete and there is lots of Steam left in the market going up......in coming few years time frame.....
But in between many corrections will come and those corrections will try the patience of the Investors...... the ride to market top will be in Zig Zag manner leaving the last few legs of reaching the Euphoric Market Top......
Today's is the time when Investors who have invested in good fundamental companies to practice Delayed Gratification and sit tight and do nothing and just watch your investments earning you huge profits in coming few years.....
Investors who are very emotional and reflexive will be the ultimate losers because of practising Instant Gratification and booking profits to early instead of capturing the full potential of capital gains the STOCKS might provide in the longer term......
So believing in market cycles and practising delayed gratification might bring a smart Investors superior returns in the next few years......
IT is my personal opinion and view only and not a recommendation to buy or sell and I reserved to be proved otherwise also...... please consult your Financial Advisor......
On 20/9/2019 Sun Tv made a low of @390/- and went way below my Wisdom of the crowd Purchasing Price....
In Jan 2018 Sun Tv made a lifetime high of @1098/-
Today it is @515 after making a Low of @390/-.....
Note the price of Sun Tv can go to zero also and anything can happen.....
It is my personal opinion and view only and not a recommendation to buy or sell and I reserved to be proved otherwise also...... please consult your Financial Advisor.......
[4:54 PM, 10/23/2019] Jiten Patel: But as such at Lower Valuations and value for money Poor Investors are coming in flocks to sell are Current prices as if there is no Tomorrow..... the more these so called Poor Investors are selling and taking the price still further downwards still the stock becomes cheaper and cheaper......
In long term if the Stock performs as per its long term trajectory ......than the rate of return in the future if purchased at lower cheap prices today..... will be very good.....
[4:59 PM, 10/23/2019] Jiten Patel: There are 6000 companies in stock market and as such so many companies stock prices must be hitting my WISDOM OF THE CROWD AVERAGE PURCHASING price....... which i am not even aware of because i follow very few selective companies.......
[1:04 PM, 10/25/2019] Jiten Patel: How Biological Evolution..... Economic Evolution and Financial Investing Evolution are correlated.....
Few days back I had started to read a new Book...... and found it very interesting.....
In the book the author mentions and tries to correlate how the process of Biological Evolution and Economic Evolution are similar....... what the author means that we are in a constant process of Evolution and as you all know that the organisms living on this planet are continuously Evolving for survival and passing their genes and DNA to the next generation......the organisms which do not adapt and change as per the natural process of evolution are wiped out of the planet and their existence is completely extinct.....
Same way the Economy Evolution works...... products and services which are outdated are completely wiped out and new form comes in to existence......
Typewriter..... Artificial intelligence..... Bullock cart.... Digitalization..... sanskrit language..... Medicines.....and many more products and services fall in this category which got extinct and wiped of......
So to keep on changing and evolving is the key to future growth and survival and success and it is a on going process......
The same rule is applied in Financial Investing.....if you don't evolve your style of INVESTING.......your existence is completely doubtful in the Long Run......
So continuously you have to evolve and change or fine tune your system and process which you adapt in financial INVESTING.....
Because as the law says those who evolve and change have a better chance of survival.....
[10:36 PM, 10/27/2019] Jiten Patel: Happy diwali wishes to you all and all your family members.......
[9:57 PM, 10/31/2019] Jiten Patel: Disposition Effect - an anomaly in behavioural finance
Hilaire Gomer
14:00, 5 September 2017
The disposition effect in behavioural finance is one of the many biases or partialities that people are influenced by when they make imperfect decisions, particularly in investing and market trading.
The disposition effect describes how investors often sell shares whose price has risen when they might be holding them in hopes of higher gains. To an extent the investor ‘taking profits’ is logical and healthy.
However, selling after a short time to avoid possible future loss can deny the investor financial gain.
But, the flipside of the disposition effect is even worse. Investors tend to hang on to investments, shares, commodities and the like, when these assets have dropped in value.
Trying to be rational all the time
Rather than admit failure, or through sheer inertia, investors with the disposition effect neglect the shares and let them tread water indefinitely.
Rationally, it is best to sell these poorly performing items before they decline further and then re-invest the proceeds in fresh, researched, ventures with the expectation of making money.
The rational and emotional reactions that make investors practise the disposition effect has much in common with another bias, ‘loss aversion’.
As with the disposition effect, this bias says that people don’t wish to risk loss, even though they might acquire equivalent gains. They feel it is better not to lose £5 than to find £5 even though both are actually the same.
This is not so surprising as psychological studies have shown that people feel losses twice as much as they feel gains. Investors want to avoid losses at all costs, so they exhibit risky behaviour by holding onto duff shares.
They are loss averse, so they sell shares too soon before they even begin to show signs of further upward movement.
Disposition Effect is centre stage for investors
Cognitive and social psychology academics Nicholas Barberis and Wei Xiong describe the disposition effect as one of “the most robust facts about the trading of individual investors.”
They say the disposition effect is common in individual investor trading and is linked to pricing phenomena, such as post earnings announcement ‘drift’, and stock level momentum.
This bias also extends to the real estate market, where properties that don’t sell hang around for months or years when common sense would dictate in that in many cases the seller should reduce the price and sell.
Prospect theory and aversion bias
This brings us to Daniel Kahneman and Amos Tversky’s ‘prospect theory’ of 1979.
People hate to lose. Losing, we learn, is much more of an emotional event than gaining, to such an extent that people prefer not to risk gaining for fear of losing face and being disappointed.
Professor Barberis, has noted: “Stocks that have done well over the past six months tend to keep doing well over the next six months; and that stocks that have done poorly …… tend to keep doing poorly over the next six months.”
Why is the disposition effect so strong that investors keep doing the exact opposite of what they should do – sell the poor shares and keep the good ones?
Why do investors think the odds don't apply to them
Why do investors think the odds don't apply to them? Source Shutterstock.
Barberis and others have come up with some queries for the investors irrational behaviour. For example active investors are often outperformed by passive, longer term investors. What is the significance of this?
Why, he asks, do buyers think they know something the seller doesn’t? Why do investors think the odds don’t apply to them? Why do they think they are the exception to the apparently obvious rule? Why are they so confident?
The culpable bias – over confidence
A lot of bias boils down to the problem of over confidence. Kahneman and Tversky reckon that over confidence is a big culprit in making poor assessments. In other words, a lot of us believe the glass is half full and will stay that way, but often neither of these things fit the facts.
A mental solution to the problem does exist. It is called ‘hedonic framing’ which may be worth a try. The idea is that the person or investor fools their prejudices by making themselves think of a single, large gain as parcels of small gains, and to think of small losses as a single, large loss.
Also this solution suggests that people might think in terms of parcelling up different-sized losses into a more attractive net minor gain.
[10:38 PM, 10/31/2019] Jiten Patel: Market moves in Cycles...... and Instant and Delayed Gratification......
Presently where the current market is standing it is important to note that we have almost completed 60% of the total Uptrend cycle which started in 2008/2009 bottom....
We are still far away from the completion of 100% of Uptrend market cycle which as per my perception and view should take 3/4 years to complete and reach the Euphoric Market Top....
What i mean is that the market cycle from Bottom to Top is still incomplete and there is lots of Steam left in the market going up......in coming few years time frame.....
But in between many corrections will come and those corrections will try the patience of the Investors...... the ride to market top will be in Zig Zag manner leaving the last few legs of reaching the Euphoric Market Top......
Today's is the time when Investors who have invested in good fundamental companies to practice Delayed Gratification and sit tight and do nothing and just watch your investments earning you huge profits in coming few years.....
Investors who are very emotional and reflexive will be the ultimate losers because of practising Instant Gratification and booking profits to early instead of capturing the full potential of capital gains the STOCKS might provide in the longer term......
So believing in market cycles and practising delayed gratification might bring a smart Investors superior returns in the next few years......
IT is my personal opinion and view only and not a recommendation to buy or sell and I reserved to be proved otherwise also...... please consult your Financial Advisor......
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