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Vivek Sukhani
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   Posted: 01/Jan/2008 at 9:05am |
Originally posted by basant
Right => The CAPM model. |
Which necessarily implies that if someone's long Ispat @ 12 rupees and made a 7-bagger it should come as no surprise if the alpha is low. Astute fund managers tend to hunt for opposite kind of stocks to the market as the beta tends to be low and hence in case they perform well, the alpha stays high.
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basant
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Posted: 01/Jan/2008 at 9:34am |
But except for those fund fact sheets I haven't met any indfividual investor who keeps looking at these greek terms.
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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Vivek Sukhani
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Posted: 01/Jan/2008 at 9:42am |
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Since the comparision was being made with the mutual funds you have to look at alpha. The fight is always for alpha and never for absolute returns. So, if someone makes a superior return by betting on an ispat he wont be able to claim laurels if alpha is computed.
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smartcat
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Posted: 01/Jan/2008 at 11:11am |
TheEquityDesk XI had high volatility in 2007 and hence I'm assuming risk adjusted returns would be low. Since TED XI mostly consists of stocks from two sectors (Media & financials), the portfolio sees bouts of outperformance and underperformance.
But the HDFC twins (and to some extent Bharti) brought some amount of balance to the portfolio.
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Vivek Sukhani
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Posted: 03/Jan/2008 at 5:43pm |
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One should not worry too much about such outperformance and underperformance. For the first half of the year I was a big laggard. Then I picked up my speed and the last quarter was a zing. Most of us who are heavy in small caps would have managed to beat TED XI. But the thing to remember is that the first half performance of TED XI was really astounding. So, it will be something like sometimes you win and sometimes you lose sort of a game......and thats pretty good for then you stand on the ground otherwise success gets into the head, something which everyone should guard against. And most importantly I believe everyone goes through this. So, yes , the performance doesnt look as outstanding as we were getting the impression after the first half but overall it was a good year for TED XI.
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prashantmohta
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Posted: 03/Jan/2008 at 5:59pm |
performance would have been much better if MERA SHER KHELTA TO.
ANY HOW IT IS EQUAL TO RELIANCE GROWTH FUND WHICH IS BETTER WAY TO COMPARE.
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kulman
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Posted: 03/Jan/2008 at 8:06pm |
Not entirely related, but intriguing observations made in the article here: Stock Market Cycle Investment Management and the Business Cycle
Some excerpts...
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Most investors, I'm beginning to believe, and all financial advisors, media representatives, and market gurus have abandoned these fascinating curves for the comfort of a straight-edged twelve-month playing field... simple, yes; realistic, not.
Investing with a calendar year focus has no basis in the realities of finance, business, or economics... isn't it obvious that the Stock and Bond Markets are far more closely related to the Business Cycle than to the Earth's around the Sun?
Few investment professionals would argue with the observation that a viable investment program begins with the development of a realistic plan, and most would agree that investment planning requires the identification of long-term personal goals and objectives. Some experts would even agree that the end result should be a near autopilot, long-term and increasing, retirement income.
Asset Allocation is used to organize and control the structure of the portfolio so that it operates in a goal directed manner. Is this easy or what! It would be if the average investor would just let things alone long enough for them to work out according to the plan. That's the rub. Wall Street, the financial media, and financial professionals (including CPAs) have no interest in letting things work out according to plan... even if it's a plan that they designed.
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Life can only be understood backwards—but it must be lived forwards
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