Prashanth Krish | Portfolio Yoga

Timing Mutual Fund Investments

In today’s edition of DNA, Ritesh Jain, CIO of TATA Asset Management Ltd makes a case for investing in Mutual funds since returns from Real Estate going forward are going to be impacted owing to both a excess of supply and changes in government rules with regard to black money (Link). In a way, we agree with his view that forward returns from Real Estate may not be as interesting as it had been in the years gone by (specifically between 2005 – 2010).

But that does mean that investing in Mutual funds at any point of time is the best way forward. While we strongly believe that for most investors who cannot afford time and investment to analyze the markets on their own, the best path is by way of Mutual funds, there still lies the fact that even Mutual funds have big risks.

To buttress my case, lets look at one of the top Equity funds of Tata Mutual Funds – Tata Pure Equity Fund – Growth.

The scheme has been a steady compounder with CAGR returns sinec inception coming in at 20.19%. But that return has not come without some significant volatility. The fund has twice in the last 15 years seen a draw-down that exceeded 50%.

To give you a better picture, assume you invested into the fund in early March 2000 based on the exuberant markets you had heard about and how rather than risk in direct equity, Mutual funds were a better tool. Well, the next time you saw the fund NAV return back to your purchase price was in December 2003.

While I may have chosen the most extreme example, my point is that while Mutual funds are good investments, even there timing matters a lot. Invest in a wrong time (such as the early 2000 or late 2007), and no fund manager can provide you the cushion you so desperately wish.

As I wrote in an earlier post, some of the best performing funds saw big draw-downs in 2008 / 09 and in a way unless one really slept off during the period, the pain of the losses (even though they would be Notional) is too hard to ignore.

The thing called #NetNeutrality

By now I am sure you would have heard and read a lot about the term Net Neutrality and hence I shall not seek to reinvent the wheel so as to say. I myself have been reading voices both in favor and against Net Neutrality as its being understood but rarely have I seen a voice so uniform that the government regulate what kind of services a business can offer for free and offer for a fee.

Net Neutrality in the US pertained to telecom companies offering a higher speed for a few firms that paid them off and the normal or even throttled speed for others. In other words, they said that only if you pay me (the toll booth operator?), I shall allow you this road that has no signals so that you can reach your customers faster. The rest would have to use the normal road and since everyone else shall use the road, this would be slower. This has been seen as wrong and telecom companies out in the US now have to offer the same speed to everyone.

The key point in India is interestingly not about throttling speeds for certain websites which is not happening (supposedly) but about offering for free certain services (Applications) by charging the site operator instead of the end customer. The one making the biggest noise has been Airtel Zero since it was the first to take the initiative and the Facebook promoted internet.org

One of the key concerns among those who are against Airtel Zero and are compelling sites that have signed up with them to withdraw is that by providing certain sites for free, Airtel (and other Telecom operators who are sure to come up with similar plans) shall end up killing the small guy who is unable to pay for the said service and hence may not reach a large portion of users who would not be able to get to their site since they lack the internet connection that they need.

When mobiles were first introduced to India, the call rates were so high that the number of users were those who could afford to not just buy the expensive handset but also pay for the expensive calls (both Incoming and Outgoing). Its only as competition picked up and volumes grew that we now see more people having mobile phones than those having toilets.

While the growth of cell phone in India has been legendary so as to speak, the question here is whether we shall see similar growth in data. Right now, data is expensive (if measured as % of what a general user of telephone pays). While one can have a active phone (for incoming only) with only a Rupee as balance, the same is not possible with data. Also, while more and more people are now getting hooked to smart phones, I doubt if we are seeing the same kind of growth in 3G packages. My guess is that is not happening since 3G packages start for a month at prices close or even more than what many pay for their voice calls.

The way internet penetration (via Mobile) is calculated is by adding anyone who has even mistakenly clicked and went online. If one were to check the major apps and come up with the number of concurrent users and extrapolate them, the number we are looking would be a lot smaller. And even in that, one needs to check how many actually are using 2G / 3G data and how many are using a Wifi connection.

Coming back to the claim that products like Airtel Zero would kill the new competition which would be unable to compete with them, I wonder how many have a clue as to what it takes to survive in this eCommerce world where companies are trying to raise as much cash as possible to ensure that the competition is killed not by quality of service but by ability to burn money for longer than others.

If anyone had read the interview of Taxi for Sure founder, he can recall that the promoters were forced to sell as they were “running out of cash” even as Ola which would have been incurring a similar if not higher cash burn was able to sustain by raising more capital. Anyone today who fancies to start a taxi aggregator better have deep pockets with the ability to go deeper.

In terms of the general eCommerce companies, giving a fight to Flipkart / Snapdeal or Amazon is no child’s play. While there are nearly a dozen other sites that sell Books, how many have one even bothered to visit, forget about purchasing the same in recent times.

Good friend Deepak Shenoy had a wonderful write up on how Telecom companies were not losing money. The write was one of excellent data analysis. But then again, while he used the example of Airtel and Idea, he omitted companies like RCom, TTML and MTNL (all listed with financials available) who are literally bleeding to death. BSNL, the other biggie is also on the path of obscurity.

To me, Telecom companies are not utility companies in the sense that they get to have a fixed rate of return. The winners are ones who provide better services than the competition. The reason Airtel is able to generate a good ROE has more to do with its ability to please customers. Displease them and a competitor will be happy to have them port out to them.

Nowhere in business is there a equal field for everyone. The success of Big Bazaar / Brand Factory / Reliance Fresh was in affect more due to the deep pockets of their owners than any other advantage. For them, the biggest risk they see is not the corner grocery store owner still in business but the likes of sites which having raised Billions can undercut any other store as long as they care to.

The number of people who are online in India is a very minuscule part and unless one thinks that the government should provide internet for free, things like Airtel Zero are the only way to bring them to the super highway. Once exposed, the addiction will have them move to other sites rather than just stick with what is offered.

Yes, Airtel Zero has its faults, especially when it comes to things like Hike, but that said does it make sense to deprive a large part of population from the ability to traverse even the little bit for free?

The War in my opinion has to be against telecom companies offering a fast lane and a slow lane. All lanes should have equal speed regardless of whether there is a conflict of interest or not. But if they want to provide a service road for free, who am I to say that they should not offer the same.

In the world of stock broking where I have been for the last 18 years, the brokerage has been on a steady fall not due to government intervention but due to competition. We have witnessed the same in Telecom as well and the way forward is to ensure that the government enables this to remain a competitive field rather than have it restricted to the benefit of the few.

Building for Rent

Recently I was at a housewarming ceremony of a friend of mine. The said friend of mine had been holding the plot for sometime now and decided that the best way forward was to build a few houses and let it out for rent. This he said gave him the best possible return for his money compared to investing in a fixed deposit or stocks with his assets providing him a regular income which keeps raising year on year.

While in theory, that sounded perfectly fine, I wondered (as I do when people make statements with too many assumptions and without any data to back them up) as to whether that is really true.

The cost of construction came to 7 Million and the friend of mine was anticipating a rent of around 40,000 per month which comes to a rental yield of around 6.85% (pre-tax) on his investment excluding the amount that was spent on acquiring the said site. This seems like a very good number indeed, but how would this compare to investing the same amount of money in the market.

While I come across persons who are happy to invest big money onto properties at one go (after all, you cannot acquire a plot by way of Investing Systematically month on month, can you 🙂 ), when it comes to the market, they find themselves scared enough to risk only a small amount, something even if invested in a very good stock can become meaningless over time.

While its true that risk in markets are high, the same is the case for any other investment save for investing in a fixed deposit. But then again, with fixed deposits not even beating inflation, its not exactly a wealth generator, especially for the younger generation who are and should take more risks in an attempt to build a better nest egg.

First off, here is the matrix of Capital growth using only Rent (which rises 5% year on year). Tax has been assumed to be 15% . While there will be other costs (Taxes, Repairs, Broker Fee, etc), all those have been excluded to make the assumptions simple. Also I have added Interest (on previous years Rent + Accured) at 6% p.a All in all, the end amount is the minimum (not the maximum) one will definitely be able to save / gain from the house.

Our final number comes to a impressive 12.20 Million at the end of 15 years. Definitely not a number to be scoffed at though if we were to apply a higher tax percentage, it can drop quite a bit. If tax percentage is 25%, the final number comes to just above the 10 Million mark.

Now, lets move to the other way of investing those funds – the stock market.

Theoretically there are two ways – One invest in a few bluechip stocks and hold on to them or to invest in a set of mutual funds and hope they either meet or beat the market indices. And then there is the third way, investing into a Exchange traded fund that tracks the Primary Index – in our case Nifty or the Sensex.

Direct investing in stocks can be pretty risky or a pretty awesome move with the final result being dependent on what we bought in the first place. Blue chip companies of the 1970 & 1980’s are not the blue chip companies of today (though a few do remain). Also, its generally scary to plough all the life savings into a few stocks and hope they shall click, and click big.

While its more simple in the world of Mutual funds, even there the risk remains that the fund you chose may actually turn out to be a bad choice. In 1996, you could have invested in funds like Kothari Templeton Prima / Prima Plus as also invested into funds like CRB Mutual Fund. Its only in hindsight that we know which fund delivered and which did not.

While its true that some mutual funds have delivered better results than the Sensex, I doubt if any one can tell the fund that shall BEAT market returns over the next 15 years. The easier option is to just invest into the ETF’s that track the Index and hope that the India growth story shall ensure that we garner a substantial return over time.

If I was looking at a investment period of 15 years (same as the Rent accumulation), what would be the returns provided by the ETF?

To get a answer, lets look at the historical CAGR returns that Sensex has generated over the last 15 years.

The average CAGR return over 15 years has been 14.52% with a maximum of 21.43% and a minimum of 7.31% (the 7.31% being the returns one would have got if one got in Dec 1993 and exited in Dec 2008.

If we were to assume, a CAGR growth of 12%, what would our investment today of 7 Million look like 15 years from now?

If 12 Million was awesome, how about 38 Million 🙂

But, there is a caveat you would say. While it cost 7 Million to build a house today, it would cost a lot more after 15 years and that is a true question indeed. Hence lets look at what would be the cost of construction assuming that construction prices keep moving higher. Assuming that construction costs move by around 6% per Annum, here is the table on what it may cost 15 years from now

A house that costs 7 Million to construct may cost 16 Million 15 years from now. But even accounting for that, the gap between the returns of the Sensex and Rental Income comes to around 28 Million, definitely not small change.

While one may argue that market returns are not smooth, one also needs to understand the various hassles that come with renting a property. And the above returns assume that one had the property for rent for the whole 15 years. What if one did not find a suitable tenant for a few years? How much of a impact it will have on final returns?

While FAR ratio in Indian Cities are pretty low, its bound to go up in the future. Mumbai is already working on a plan where FAR ratio may be anywhere between 0.5 to 8. The FAR ratio for properties around Metro is being increased in cities such as Bangalore and Pune and this additional supply can and would lead to softening of rental returns as we move into the suburbs.

While there can be no Apples to Apples comparison, above analysis does seem to suggest that building a house to rent it out is not exactly the best way to create wealth for ourselves and our future generation.

CNX Nifty – First day of the month

One of the rational behind trading systems is to ensure that we are able to capture as much of the return as possible without having to go through a draw-down similar to what a Buy & Hold strategy would entail. This is achieved by being exposed to the market for as less a duration as possible.

One of the strategies which I stumble quite often is the strategy of the First day. The concept here is simple enough – Buy at close on the last day of the month and sell on close on the first day of the month (both trading days and not calendar).

I tested that idea for CNX Nifty (Spot) and while we are exposed just 1 day (out of average 20 trading in a month), we are able to capture 26% of the total move that happened in the interim period. For a strategy that has no major rationale behind it, this number is pretty awesome.

The testing period was between 1st Jan 1996 to 1st April 2015. The expectancy of the system comes in at 8.62. The system has 141 Winners and 90 losers. Average win is 38.04 points vs a Average loss of 37.39 points

A interesting point to note is the fact that not all months are the same in terms of profit potential (or at least, that has been the case historically speaking). June, March and July are the best months for the strategy while December, August and February turn out to be pretty bad months.

To get a better understanding, here is the chart showcasing month-wise break up of the return.

If one were to ignore months that were not in our favor, the odds increase even further. But then again, unless we have a clue as to why some months are better than the others, treating all months as the same would be the best way to trade strategies such as these.

The Equity Curve (points) generated by the system shows no major hiccups other than in 2008 when it saw quite a bit of volatility.

To get a better sense of the risk, here is the chart of the draw-down it would have faced.

The period between 2003 and 2007 was when it had the best performance with the equity more or less hitting a new peak every month or so. 2000 and 2008 were times when even the most disciplined trader who traded this strategy would have been shaken off by the incessant losses. Post 2009, while markets have been on a consistent rise, the strategy has had quite a few setbacks with one seeing multiple instances of 5% draw-downs.

The fact that this strategy has generated just 282 points from September 2011 till date shows that maybe, just maybe the strategy is getting out of favor with the rewards not worth the risk it entails.

But before we dump this strategy, lets run a Bootsrap on the returns to see whether the returns out here are due to pure luck or is there something more.

The p-value one gets is 0.55. For anyone who was not put off by the high draw-down one saw earlier, this should definitely be a deal breaker. Then again, the lack of any substantial profit over the last 43 months in itself says that the markets may have changed and this strategy no longer works as it did in a earlier time.

On a side note, it seems that this strategy has been under-performing since 2011 even on $SPY. Food for thought I think on how global markets may have become.

Trading System Performance – Skill or Luck

So, you have finally devised your trading system which seems to have produced good returns in the back-testing you have conducted and is ready for trading with real money. Pat yourself on the back since regardless of what happens next, you have taken a step towards being a better trader by using a rule based strategy than implementing a discretionary strategy where every rule has a exception and every failure is easily rationalized.

By accepting that we have our limitations which can prevent us from succeeding in markets, we are able to make our trading more process driven and one where mistakes aren’t rationalized but seen through the eyes of it being either a part of the system or the failure of the system. Either way, the results showcase how good or bad your system is (assuming you take every trade and do not try to over-ride your own system).

While a back-test is a good way to analyze as to whether the system has any merit or not, it is not the end of testing but actually the beginning. It is said that if you were to give typewriters to monkeys, its just a matter of time before one of them hits all the right keys and gets you a Shakespeare’s plays in order.

Or as the character Dr.Alfred Lanning in the film I, Robot says “Random segments of code, that have grouped together to form unexpected protocols”. If one keeps testing ideas, especially using optimization feature, one is bound to hit the right system. Its just a matter of time.

The question hence is, is the system performance due to Skill or pure Luck. A system that is based on some skill or market inefficiency. A system that is based on luck is one where in the streak of profits is just purely driven by luck and its just a matter of time before the said system starts misbehaving.

So, how does one determine whether the profits that are shown in the back-test is due to it being inherently good or just a matter of luck.

There are a few ways to analyze that and I shall lay out a few of them out here. To start with, let me choose a system which will be used for the testing.

The system that I shall use for the test below is a EMA Crossover. To get the two parameters, I ran through a Walk Forward Optimization which finally gave me the 2 variables I was after.

Now that the main requirement is fulfilled, lets move onto what are the ways by which you can detect whether the performance of your system is more based on luck than skill.

The first thing to do is to test your system on other time frames / markets. No single system performs exceptionally well in all time frames / markets and hence if you are looking for a 100% score, you are bound to be disappointed. What we are looking instead is performance that is well within limits.

Lets take the EMA Cross system that we have now created. The testing was done on Daily time frame. Lets compare this to Hourly as well as Weekly and see how different the numbers will be. To keeps things simple and as well as have a standard format, we shall use Expectancy as the parameter to judge. Time frame of the Test is from 1st Jan 2010 to 1st Jan 2015.

Other test settings are

We trade on Close Value
No Commissions or slippage is included.
We do not compound our position size
We take both Long & Short trades (Always in the trade)

We shall first test the system on the Daily time frame. While the optimization was done on CNX Nifty (Spot), we shall see how the system fares on other Indices

Index	Time Frame	Expectancy
	©Portfolio Yoga
Nifty-F1	Daily	25.84
Bank Nifty F1	Daily	212.42
CNX Auto	Daily	87.64
CNX Commodites	Daily	10.83
CNX Consumption	Daily	16.04
CNX Energy	Daily	-28.55
CNX Finance	Daily	95.2
CNX FMCG	Daily	82.34
CNX Infra	Daily	21.56
CNX IT	Daily	22.04
CNX Media	Daily	24.48
CNX Metal	Daily	28.9
CNX MidCap	Daily	255.5
CNX MNC	Daily	52.34
CNX Pharma	Daily	4.87
CNX PSE	Daily	57.34
CNX PSU Bank	Daily	98.52
CNX Realty	Daily	5.45
CNX Service	Daily	23.82
CNX Small Cap	Daily	98.66

The system is profitable in most indices save for CNX Energy where it saw a loss. This is good since it indicates that the system is not curve fitted to Nifty.

We shall now move to testing the system on hourly data.

Index	Time Frame	Expectancy
	©Portfolio Yoga
Nifty-F1	Hourly	7.07
Bank Nifty F1	Hourly	17.9
Reliance	Hourly	0.87
State Bank of India	Hourly	1.09
ICICI Bank	Hourly	0.21
Tata Motors	Hourly	0.89
ITC	Hourly	-0.24

Once again the system trumps (though if you were to observe closely, expectancy is in dangerous area for stocks such as ICICI Bank & Reliance while it out right loses money on ITC.

While we cannot decide based on above data as to whether the system is good or not, what it does show is that there is some amount of skill and its not entirely due to luck.

We next move back to Nifty F1 on Daily time frame and test the result using the Bootstrap method as well as Monte Carlo Testing.

The p-value using Bootstrap for Nifty F1 (Daily) comes to 0.55 which is way above the null value requirement of 0.05 to reject the thesis that the results seen above are based on random luck. In fact, the 0.55 number indicates that 55% of the result probability is just due to random luck and no more. This is pretty damming evidence of the fact that while our system seems to perform great, it actually is nothing more than a lucky streak.

Lets move forward and test our hypothesis using Monte Carlo Analysis. Once again, we are looking at the whether our result is based upon blind luck or is there something worth while.

Before we get into Equity Curves, lets compare and contrast a few other details.

In our regular back-test, we get a max draw-down of 19.70%. In contrast, the 95 percentile says that the probability is high that we may see a draw-down as high as 60%.

In our regular back-test we see a maximum losing steak of 7 trades while in the Monte Carlo approach, the figure comes to 20

And finally, lets look at the various ways in which our equity curve could have been plotted. We ran a total of 10000 stimulations and as expected, chart is messy. But what is does show is the high probability (test of the lower line) of the system losing more than 50% of capital and hence running out of capital.

But should we be surprised with the answer that this system is not suitable for trading since far too many trades hinge on luck than actual skill?

Too many traders believe that one can come up with great system by just optimizing data. If only life was that simple, we would all be chilling out in our favorite place while the system kept earning for us without a sweat 🙂

Cloning Rakesh Jhunjhunwala

Copying from the Rank student is as old as the system of education. Students who are lazy enough not to put in their own efforts would love if they can get their hands on the answer sheet of the Rank Student and enable them to pass the exam without having to deal with the nitty gritties of studying for the same.

While copying in exams is illegal, copying the strategy or even better off, the portfolio of acclaimed investors is a process that has been well documented by Mohnish Pabrai who even wrote a book which deals with some aspects of the same – “The Dhandho Investor: The Low – Risk Value Method to High Returns” and “Mosaic: Perspectives on Investing”.

At Portfolio Yoga, one of our aims is to simplify the complexities of investing in the stock markets and what better than to create portfolio’s which mimic the great investing legends of India. By buying the top picks / holdings of these people, we believe can provide for excellent returns though even the best of guys can make bad picks and hence one needs to do a bit of studying rather than blindly copy.

“Be a cloner… but clone the best” says Mohnish Pabrai and who better to start of this series than India’s best known Investor – Rakesh Radheshyam Jhunjhunwala. I do not think that I can say anything about the guy which is not known by the reader.

So, how does one clone any others portfolio?

Rakesh Radheshyam Jhunjhunwala may invest into hundreds of companies, but we as cloners are concerned only about his holdings where he holds more than 1% of the company’s total stock. This is because by having a investment > 1%, he not only shows his confidence in the said company but also enables us to track his holding via the updaets company makes to the stock exchanges.

The secondary aspect of investing would be to determine how much of money one devotes to each company of the investor we intend to clone. A simple formula would be to make equal investments into each such ideas. But if a investor has huge holding (in value terms) in one company and a mearage holding in other, why should we give equal weight to both of them.

The better way would be to invest in the same proportion as he has. Maximum investment in his biggest shareholding and smallest in one where he has the least amount invested. When I say “invested”, I mean the current value since we are not privy to the prices at which he purchased and even if we knew, it makes not much of a sense at the current juncture owing to the appreciation or the depreciation seen by the said stock.

So, if you were investing say a sum of 1 Million based on the picks by Rakesh, what should your investment be in each of his holding stocks?

The answer is provided in the pic below. Do note that the value has been taken as on date while the holding is as on 31-12-2014 for which data has been last updated.

Remember that while cloning is no guarantee for success, it at the very least provides us with a list of stocks one can look deeper.

Analyzing a few Mutual Funds

Mutual funds are one of the ideal vehicles to invest in the markets. But with a plethora of funds, its tough to identify what fund to go with. Should one invest in the top rated (by rating agencies such as ICRA) or should one invest in funds managed by star managers.

Among the large cap funds, HDFC Top 200 fund rules the roost. With Asset under Management of 14,285 Crores, its one of the biggest (if not the biggest) funds that you can find in India. Launched in 1996, the fund has a very impressive track record with compounded growth of 22.37% since launch. The expense ratio for the fund is 2.33% for the regular plan and 1.65% for the Direct plan.

Two funds that have a similar history (in terms of being launched around the same time) come from the Templeon stable.

First off was the Kothari Templeton Prima Fund (as it was called in those days). Launched in 1993, it has been one of the top performing funds with it having a return since launch of 21.80%. But despite such stellar returns, its Asset under Management is just around 3400 Crores. Expense ratio for the fund is 2.32% for the regular plan and 1.14% for the Direct (among the lowest you shall come across).

A year later, the fund house launched another fund – Kothari Templeton Prima Plus. The return for this fund since launch is 20.36% which while lower compared to the above two funds, is still way above many other funds with similar length of operation. For example, State Bank of India launched its SBI Global 94 fund in the same period and the return for that fund since launch has been just 16.08%

To close off, we shall analyze another fund that started off as the first Direct only plan and remains Direct only till date. It has one of the lowest expense ratio’s of 1.25% on assets. While the performance as we shall see has been better than HDFC Top 200 fund, its Assets under Management is a partly 416 Crores. The fund started off only in 2006 and hence the data history is limited compared to that of HDFC Top 200

To make it even, I shall analyze the funds starting from 1st April 2006 to make all of them comparable as well as to provide a better understanding of the risks one saw when the markets dipped in 2008.

First off, a comparison chart of the above funds.

(click on the above chart to get the full picture)

As can be seen, all the funds have beaten the benchmark (Nifty Total Return Index) by a pretty significant margin. In a way, this points out the advantage of actually investing in a fund versus investing in a ETF that tracks the benchmark index. Then again, since all these funds have investments in Mid and Small Cap firms), the logic of using Nifty as a benchmark in itself maybe faulty. But since we do not have the data (Total Return Index of CNX 500), we cannot but compare with what we have got.

While its clear that the funds have performed way better than the benchmark, what a investor should look at is how they performed when markets literally fell through in 2008 / 09. Since Mutual funds need to hold a minimum of 70% of their assets in stocks, when markets crash, they too unfailingly start falling though depending on how good the allocation of the fund manager is, some funds maybe better off than others.

For instance, right now, Quantum Long Term Equity Fund has its max level of cash (nearly 30%). In the event markets crash, this amount cash not only means a lower draw-down but also the fund manager is not compelled to sell stocks at their lows due to investor withdrawals.

While CNX Nifty touched its low in late October of 2008, we shall take the low of March 2009 (right before markets took off) to see how much the funds lost compared to the Index.

In the chart above, what you see is that when markets made their final bottom in 2009, it was performing much better than the Templeton twins. A near 70% draw-down in Prima Plus seems to suggest that while funds perform brilliantly in bull markets, thanks to moves in mid and small cap stocks, when one hits a bear market, its those very stocks that drag the performance to hell.

With markets being strongly bullish, investors are once again rushing to invest into mutual funds. A quote from a recent article in Mint shows how bullish Indians have become in the just concluded financial year compared to 2008

Mutual funds (MFs) invested a record Rs.38,627 crore in Indian stocks in the year to 31 March—more than double the previous highest in the year ended March 2008

Even investments into Portfolio Management Schemes has shot up substantially, but as the above data shows, the question that should be asked is, are investors prepared to wait it out in case things do not turn out as anticipated. After all, markets are not a one way street to riches but a way to channel earnings for a better return in the long term than one that can be achieved elsewhere.

Investing by just looking at performance can be risky if such performance was delivered by taking higher risks. One needs to understand that while there is always a give and take relationship, when the shit hits the fan, all kinds of logical thinking are quickly thrown out of the window with investors keen to get out at any rate possible regardless of the fact that cycles are common and one never knows when this will end and the next begins.

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this: