Investing, much like contract bridge, is a loser’s game which means that the best performers succeed by minimising their own errors and taking advantage of other people’s mistakes. The behaviour of most investors today suggests that risk is not uppermost on their minds. Since future returns are driven by perceived risk, the equity market today is not priced for above average returns during the next 12 months. The Sisyphean lure of the mantra that higher risk means higher return is inescapable in the current risk-tolerant, fully valued investment landscape.
Despite an unusually troubling macro outlook, vulnerable to issues that include:
(This story appears in the 17 June, 2011 issue of Forbes India. To visit our Archives, click here.)
Sanjoy sir, Thank you for reinforcing investing discipline! Also taking this opportunity to wishing you a very happy birthday!
on Jun 7, 2011