The Dow Jones Industrial Average (DJIA) or the Dow is an index of 30 companies that many investors are confident about investing in. It shows the market valuation of companies such as General Electric, Exxon Mobil and Microsoft Corporation and is a good reflection of...
The term ‘hedge’ refers to risk mitigation. Earlier, Hedge Funds used to aim at reducing the risk of decline in prices of securities. Nowadays, it works for generating outsized returns. The hedge fund is not an investment instrument but refers to a collective...
The Sharpe ratio is an important metric used to determine the overall return an investor receives on his portfolio and measures the total amount of revenue earned for each unit of risk. The ratio shows the investor how their investment or fund is performing after...
Goodwill is an intangible asset that represents the non-physical items of a company has that cannot be easily valued. It is the excess value of a business after subtracting the assets from the liabilities. This value can be generated from customer loyalty, the quality...
While picking a quality company for long term investment, one of the key element to check is the company’s sustainable competitive advantage or Moat. If you are new to the concept of Moat, I would suggest you to first read this blog post. Anyways, in general, the Moat...
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” – Charlie Munger Over the last couple of years, since I’ve started investing, I’ve come to know so many...
The Random Walk theory is a statistical model of the stock market that shows that stock prices with the same distribution can be independent of each other. In other words, the prices of these securities are not influenced by past events in the market. The random walk...
Price to earnings ratio is definitely one of the most frequently used valuation ratio used by the investors to evaluate a company. Although I do not use this ratio too often, however, every now and then I check the PE of companies and industries to try to look them...
Deep value investing is an intense version of value investing which focuses on buying stocks at a much higher discount to intrinsic value in comparison to value investing. This results in an increase in the potential reward and risk of the investment. Background...
An overview of Face Value, Market Value & Book Value: Recently when I was navigating my Quora profile, I got an answer request for the question what is the difference between the face value and market value of a company? Although both these are elementary terms...
