India’s true sunshine sector

As of this writing, the NIFTY is trading slightly below its lifetime high of 10,477 points, nearly doubling from 5,517 in early September 2013. In the same period, NIFTY Price-Earnings has risen from about 16 to over 26, a zone considered to be significantly over-valued compared to median values. Price multiples expansion typically accompanies improving prospects for earnings growth in times of general optimism. The problem, for India, has been the lack of translation of that optimism into earnings growth. While the NIFTY (Price) has risen by 17% annually for the last four years, NIFTY Earnings Per Share (EPS) has

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Investing success: Rationality scores over Intelligence

We know that tests of conventional intelligence that measure Intelligence Quotient (IQ), are only a part of a measure of how well someone thinks. Yet, most societies focus on intelligence as predictors of successful decision-making. IQ, on it’s own, has been found wanting in explaining success or failure in environments that call for complex decision-making. A paper by Michael Mauboussin and Dave Callahan of Credit Suisse “IQ versus RQ” (link to paper provided at end of post) explores the role of rationality in investment decision-making and it’s impact on success or failure. Prof. Keith Stanovich, a professor of applied psychology at the University of

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