Informative article on nytimes

Here is the link to an informative article on nytimes, detailing the genesis and circumstances associated with the quantification of risk in a portfolio.

The book mentioned at the beginning of the article “Against the gods” is a part of a series of excellent books by Peter L Bernstein: Capital Ideas, Against the gods and The power of gold. The breadth of history covered in these books along with the analysis and the author’s insights are well worth the time spent in reading these books.

Highly recommended, both the article as well as the books!

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Is 2008 is forgettable? No, Never… Not if we want don’t want to repeat it

I’ve seen enough of the articles, which say 2008 is forgettable or imply this…
Here’s a sample.
Newyork Times:
Markets Limp Into 2009 After a Bruising Year

AP:
Stocks gain as investors try to forget 2008

SanJose Mercury News:
2008: For stock investors, a year to forget

Atlanta Journal Constitution:
Good riddance to 2008; it’s time to start over

Boston Herald:
2008: A year to forget

The National, UAE:
2008 – a year investors would rather forget

Well, let me give you one sentence for all such stories…

Those who forget history are doomed to repeat it….
Don’t ever forget 2008. This was the year which treated us to many historical lessons.
We will forget it at our peril…………….

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Proposed IPO of Visa — Slippery territory

Apparently visa has decided that it will come out with the largest IPO ever in US stock market. As i see it, this is a risky maneuver for buyers. Currently financial industry is trversing an inflection point, asset repricing is in progress and most financial institutions are increasingly looking at monetizing as many different types of assets as possible.

In situations like this, it is extremely important to run through the financial statements of the IPO company with a fine tooth comb and examine the valuation of the organization skeptically. The more conservative the financials and valuation the better it will be for an investor.

Especially important would be elements of the business model that depend on externalities. Credit card industry is a high visibility industry and the chances of external environment affect, like legislative, regulatory impact on the industry should be factored in while arriving at the valuation of Visa.

This is an interesting IPO process to follow.

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