Humans are Loss averse. And the individual, corporate and society which understand it thrive despite odds. “How did this stuff ever get published?” was what traditional economists asked when behavioural economists observed that human beings were loss averse. This aversion is at the heart of human psychology and asset pricing. And if professors are fighting […]
Spin is an art and an important socioeconomic activity for politics, show biz, marketing and capital markets. Its capital market spinning which invariably falls on its head again and again. And only short public memory lets it thrive. Let’s take the rupee. We have been tracking the rupee in this column since December 2006 from […]
Fractal is a form, which appears everywhere in nature both at macroscopic and microscopic levels. Trees, clouds, DNA’s, atomic structures are all fractals. Physics, chemistry, biology, astronomy are full of fractal patterns. Mass psychology is also a fractal. Not very many books and articles are written about this universal truth. A fractal means a mathematically […]
“Simplicity or singleness of approach is a greatly underestimated factor of market success.” These famous words of Garfield Drew are very hard to learn. It’s like accepting that being a fool in markets is the first step to profit. As then you are always alert to a market surprise and never get into genius’s bias. […]
It may still be vivid in many investors’ minds the game of the century, ‘Caritas’, the Ponzi* scheme of the early 1990s in Romania. It was owned by Ioan Stoica and attracted over 400,000 investors who gambled over 1 billion dollars because it promised to repay 8 times the amount invested. Although Caritas lasted for […]
INR touched our anticipated level near 40. This is what we said on December 4, 2006, “The currency is headed down to 43 and lower, despite what the RBI does, despite macroeconomic conditions, despite the seasoned trader”. When we hit 43, we carried the other rupee update on Apr 2 saying, “The long term trend […]
Emerging Market Series, Eastern Europe, Romania So it finally happened. The BNR (Central Bank of Romania) decided to drop the minimum requirement barrier and allow the banks to decide based on their credit system evaluation what the population’s level of debt should be. Additionally, the banks will determine what will be the minimum down payment […]
It’s not very tough. Moody’s did it recently when they discredited their near 100 year old rating research history by giving ridiculously positive ratings to some not so positive Icelandic banks. The research bust happened again and John Moody might have had strange reactions, if he was around. But then we witness it all the […]
Now we might call it the MCX May Potato, but econohistory quotes the Potato’s Irish origin comprehensively. Due to blight, the great famine happened between 1845-49 destroying the primary source of food for many Irish. This is a classic case study of the linkage of a crop and an economy. According to some estimates, 500,000 […]
Just like always, our brain can comprehend a Psychology Channel (Tube), but inverting it to understand Channel psychology might need Bono’s lateral thinking. Even if you are an investor, a trader or analyst, prices leave an imprint on our mind. As just like historical price highs are remembered, our brain also creates imprint of inclining, […]