In 2016 I bought a health insurance policy.
Cover: 7 lakh; Premium: 7k.
I was already covered under group insurance offered by my employer. This health insurance was (and is) free, i.e. premiums are paid by my employer and not deducted from my salary.
I am relatively young, with no history of premature heart disease, diabetes or cancer in the family.
So why did I buy choose to buy more health insurance and pay 7k?
Enter Prospect theory to argue my stupidity.
Prospect theory states that losing a million dollars shrinks your heart more than making a million dollars swells your heart with happy feelings. In other words, our emotional brain sucks at math. Continue reading “Investor behavior in India: Are stocks bought like insurance or as lottery tickets?”
The last few months have been testing for NBFCs in general. Demonetization was a black swan event that brought fears of a repeat of the AP Crisis in 2010 that served a near death blow to Microfinance in India.
On paper, Microfinance remains a fragile business model when compared to banks and depository institutions.
Borrow -> Lend at spread of 10-15%
Deposits + Borrowings (RBI, Bonds etc.) -> Lend at net interest margins of 2-5%
Without the cushion of deposits, an MFI must disburse what it borrows, and borrow more to grow its loan book. The cost of customer acquisition for MFIs is also higher than banks.
Continue reading “Microfinance : Demonetization. Budget. Beyond”
I have been trying to keep away from US politics and the frenzy Trump seems to have caused all around me. Armies of snowflakes march against the Wall of Fate that will stand for 5 years. It gives me heartache to think about it, even as I try to filter their screeching to not get “triggered” myself. These are well meaning people, far ahead of their time, feeling let down by institutions that were built to uphold the tribal nation state. There is ofcourse much lulz to be had in raging against the Plastic First Family. But I am an alien here, and this is not my business. Continue reading “Steve Bannon and your Portfolio”
Once dismissed as a “death trap” by Warren Buffet, Airlines saw frenzied buying in 2016. In third quarter Buffet’s Berkshire was seen accumulating stocks of not one but multiple airlines. In India, airlines listed on the exchanges saw buying by marquee institutions and funds. In 2016 the much maligned Airlines business caught the fancy of the investment community. What changed? Continue reading “Cinderella at the Ball – Are Airlines still a Value Trap?”
I am not a SEBI Registered analyst, and my views are biased as I am invested
Over a period of investing, my core beliefs have evolved, and these are the relative “truths” that I anchor to :
Continue reading “My Core Investing Beliefs”