Friday, August 18, 2006
Behavioral finance
For all those who dabble into the financial markets, let me point to an interesting field of behavioral finance.
Some interesting theories
1. Loss aversion - A 100 Rs. loss gives twice as much grief as the happiness of a 100 Rs. profit. So people tend to hold on to losses.
2. Endowment effect - The tendency to value something more when we posses it
3. Availability heuristic - Making judgement on what we remember rather than by looking on complete data. So everybody chases the next Infosys forgetting that there are several other companies which bit the dust.
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Current music : Tumhi Dekho Na/KANK
Some interesting theories
1. Loss aversion - A 100 Rs. loss gives twice as much grief as the happiness of a 100 Rs. profit. So people tend to hold on to losses.
2. Endowment effect - The tendency to value something more when we posses it
3. Availability heuristic - Making judgement on what we remember rather than by looking on complete data. So everybody chases the next Infosys forgetting that there are several other companies which bit the dust.
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Current music : Tumhi Dekho Na/KANK
Thursday, August 10, 2006
The Indian indifference
Yesterday's Pune Edition of Times Of India carried an article on the front page about a man in Rajasthan who became a father at 88. As if that was the burning issue in the country. And isn't that the reason why Pune Times exists in the first place ? One of my friends who doesn't read the main paper, read that article only.
In contrast, the Indian Express is carrying one article daily on each of the 180 odd victims of the deadly Mumbai blasts of 7/11. It is their near and dear ones who have to bear the pain while people who weren't directly affected have forgotten the blasts in less than a month.
It is this indifference that is costing us dear. As one panelist said on the "We The People" Special(NDTV 24X7) on Mumbai blasts "We are dying anyway. It is for us to decide how to die".
In contrast, the Indian Express is carrying one article daily on each of the 180 odd victims of the deadly Mumbai blasts of 7/11. It is their near and dear ones who have to bear the pain while people who weren't directly affected have forgotten the blasts in less than a month.
It is this indifference that is costing us dear. As one panelist said on the "We The People" Special(NDTV 24X7) on Mumbai blasts "We are dying anyway. It is for us to decide how to die".
