Sunder’s List: Uncertainty

Roundup: S&P -0.20%, Dow -0.06%, Nasdaq -0.44%, Gold $1273.70, London -0.38%, Germany -0.35%, France -1.12%. At pixel: Nikkei -0.14%, Hang Seng +0.30%

Regulators around the world are examining alleged abuses of a number of financial benchmarks by companies that play a central role in setting them. And now we find out that gold prices are manipulated. (Bloomberg, #gold) GOLDBEES 0.00 0.00 (0.00%)

NSEL Scam Update: EOW will attach properties of Jignesh Shah, Joseph Massey and all other NSEL directors. Plus, a hint of insider trading in the latest FTIL sale of its Singapore subsidiary. (LiveMint, LiveMint) FINANTECH 0.00 0.00 (0.00%)

Its not only India that have warehouses overflowing with food and vermin. The USDA had to purchase locally manufactured sugar as Mexico continued to export it into the US. (WSJ)

Growth tends to mean-revert, don’t get taken in by “Asiaphoria”. “In neither country [China, India] does investor confidence rely on rule of law.” (WSJ)

Uncertainty

A big part of investing is understanding your own behavioral shortcomings. All investing decisions are taken under a cloud of uncertainty:

Warren Buffett, the famed value investors, poured $3.4 billion into Exxon Mobil, the world’s largest oil producer. (USAToday) Short-seller Jim Chanos thinks that its a “value trap” as cash flows decline and return on capital slides. (Reuters)

Most of us overrate our own capacities and exaggerate our abilities to shape the future. Advisers face a peculiar problem: Their plans and proposals must be approved by their clients and they have a stake in getting that approval. This dynamic leads to their tendency to understate risk and overstate potential. (ATM)

The irony: Economic growth comes from employing labor and capital more efficiently. That comes from people working hard and innovating. Each of these requires motivation. Thus, motivation is the foundation of success. What drives motivation? The need to resolve uncertainty. In other words, the opposite of guaranteed security. (QZ)

Good luck!

 

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Get in touch with Shyam for advice on mutual funds. You can either WhatsApp him or call him at 080-2665-0232. He is an AMFI registered IFA who can advice you on Franklin, Blackrock, IDBI, Mirae, HDFC, ICICI Pru, UTI, Sundaram, Reliance, Religare, Peerless, Tata and Birla Sun Life funds.

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