Sheep in Wolf’s clothing: An asset’s true character

Let’s assume that you own a hospital (say Hospital C). You have been doing well in your market and currently have the third largest market share, and you are thinking of installing 500 slice CT machine (because both your two major competitors (Hospital A and Hospital B have one each) and it will cost you […]

Octavo Pansophy #1: James Gipson

It has been quite a while. In these 2 long years, I went from working for a fund to start my own advisory firm along with an excellent investor and most of the time has been spent understanding businesses and reading annual reports. Few years back, I thought of starting a series of articles called […]

Human Misjudgment : Deprival Super Reaction Syndrome

Imagine the following scenario. You are sitting at your work desk sipping your coffee when your boss comes and offers you the following deal.   He offers you a fixed bonus of Rs 1 crore for the year. Besides this, he offers you a variable bonus. For the variable bonus, he asks you to either […]

Human Misjudgment : Authority

Authority, authority!” they shout Whose minds, not large enough to hold a doubt, Some chance opinion ever entertain, By dogma billeted upon their brain. ~ Ambroce Bierce   There is one thing we all have been taught from very beginning and that is to accept what our elders tell us; to accept their authority.   […]

Human Misjudgment : Endowment Effect

Today I discuss the human trait that, despite all its glory, has lead to disastrous consequences for many individuals and societies and specifically in investment world.   In fact, if there is one trait which, even though I do frequently observe in successful people in various other human endeavors, is very rare to find in […]

Human Misjudgment : Social Proof

Few years back, while buying a book on Amazon, I ended up buying two more books along with the intended purchase.   It was due to a feature of Amazon, which tells you what other buyers have bought along with the book you are trying to purchase. I never heard of these books earlier but […]

Human Misjudgment : Confirmation Bias

“I hated discussing ideas with investors, because I then became a defender of the idea and that influences your thought process.” ~ Michael Burry (The Big Short)   I’m sure this is one statement most of you will relate to. We often discuss stock ideas which, we understand, are contingent to future events but if we […]

Human Misjudgment : Reciprocation

If you are sitting in a dark and unknown place for long time and someone switches on a light source, the initial feeling is of discomfort (especially for eyes). But once you get comfortable, you realize how different that place is from what you initially thought it to be.   In my college days, I […]