Showing posts with label Parag Parikh. Show all posts
Showing posts with label Parag Parikh. Show all posts

Tuesday 31 July 2012

Why Stocks?

Past performance is no guarantee for future performance.  There are no guarantees that any asset will thrive in the future because it has in the past.

This leaves two choices:

1.  Keep hard cash and save enough during your working years to last your retirement years; or
2.  Take some risks and invest the money in assets that have a reasonable chance of increasing in value over time.

Keeping cash:  Most people cannot save enough to support them in retirement especially when inflation continuously erodes the purchasing power of money.  Therefore, most would not choose this option.

Investing the money in different asset classes:  Here is where the problem of choosing investment options comes in.  It is definitely wise to spread your wealth across various asset classes like stocks, bonds, real estate, art or gold.

Why Stocks
Stocks increase in value faster than inflation decreases the buying power of money.  The best way to have money in the future is to make money in the future.  So, forget about which asset class will appreciate in the future but rather focus on owning a business that profitably sells products or services.  Of course, most do not have the inclination, the money or the skills to start their own business, so the next best way to share in the profits is through the stock markets.

Stocks represent ownership interest in businesses.  When you invest in stocks, you become a partial owner of the concern that will hopefully make money in the future.  Stock ownership will reward the owners either because the stock prices go up or because the firm/s profits will be distributed as dividends.  In the short period stocks may rise for reasons having nothing to do with profitability or dividends.  But over the long periods of time it has been proved that stock prices rise in relation to a company's earnings and distribution of profits to shareholders in the form of dividends, bonus share and rights.  Learn and acquire the knowledge to consistently identify specific companies that will thrive.  In the absence of this ability, employ the services of a professional.

If you don't plan to tap into your long-term savings for a period of at least five years, stocks should probably constitute the bulk of your portfolio depending upon your emotional strength to deal with the ups and downs of the market.  Even retirees who draw their current income from their investments should have a portion of their savings invested in stocks so that their money will grow faster than inflation.

To be a savvy investor, know the difference between investing and speculating.





Thursday 24 May 2012

Facebook IPO - The Psychology driving the Investors

Facebook is the biggest IPO ever listed in the U.S.

In the light of its recent listing, this video is a very good one to understand the psychology of IPO investing.

There are great lessons one can learn from Parag Parikh, who explains this very well.

With these knowledge, your investing will be safer.





Facebook exec ducks questions about IPO debacle

May 24, 2012

Sandberg speaks during Class Day ceremonies at Harvard Business School in Allston, Massachusetts May 23, 2012. — Reuters pic
BOSTON, May 24 — Facebook chief operating officer Sheryl Sandberg spoke to Harvard University students in her first public appearance since the company’s disappointing initial public offering, but refrained from addressing the controversy around its messy, glitch-plagued debut.
Instead, Sandberg urged students graduating this week from Harvard’s business school to work for fast-growing companies, communicate honestly and address inequality in the workplace.
“We need to acknowledge openly that gender remains at issue at the highest levels,” she told a crowd of students and their families assembled Wednesday afternoon on a lawn outside the business school library alongside Boston’s Charles River. Only about 16 per cent of the highest corporate jobs are held by women, the same level as a decade ago, she noted.
Sandberg, who visited her alma mater with her parents and two children, only once made reference to the IPO in her speech. After urging the graduates to use Facebook to stay in touch, she said: “We’re public now, so could you please click on an ad or two while you’re there.”
Asked before and after the speech to comment on the IPO, Sandberg said she not speaking to the media.
She told the crowd that she sometimes suffers from anxiety: “When things are unresolved, I get a tad anxious,” said the 42-year-old who became one of Harvard’s wealthiest alumni after the IPO. “People have never accused me of being too calm.”
She chatted and posed for photos with dozens of students after the speech. Several said they had accepted jobs with Facebook. “I’ll see you over the summer,” she said to one of them.
Facebook shares closed yestersday at US$32 (RM96) a share, 16 per cent below the price at the IPO last week. The deal was beset by computer glitches at the Nasdaq market and lower-than-expected demand from investors.
Facebook and lead underwriter Morgan Stanley were sued by shareholders yesterday who claimed they hid the social networking company’s weakened growth forecasts ahead of its US$16 billion initial public offering.
Sandberg received an undergraduate degree from Harvard in 1991 and an MBA from the business school in 1995. — Reuters




How Zuckerberg cashed in $1.13 BILLION worth of his personal shares BEFORE stock cratered - now could it end up at $10?
Read more: 
http://www.dailymail.co.uk/news/article-2148839/Facebook-IPO-Mark-Zuckerberg-cashed-1-13bn-worth-personal-shares-BEFORE-stock-cratered.html#ixzz1vksQbPPc

Psychology of Initial Public Offers (Understanding the IPO of Facebook)




IPO  .... It's Probably Overpriced.

The full version.