The IKEA Effect: Norton, Mochon & Ariely’s 2012 Discovery That Labour Leads to Love
In 2011, three behavioural economists at Harvard Business School and Duke University — Michael I. Norton, Daniel Mochon and Dan Ariely — conducted a series of…
Blog · Page 6
Daily lessons in long-term investing
Plain-English lessons on judging businesses, reading annual reports and staying patient — 370 articles and counting, a new one most mornings. Educational only: none of these is a research report or a recommendation.
Behavioural finance
Behavioural finance
Employee Cost-to-Revenue Ratio: How a Single P&L Line Reveals Operating Leverage, Wage Discipline & Hidden Margin Risk
According to the SEBI “Analysis of Profit and Loss of Individual Traders Dealing in Equity F&O Segment” study, 93% of individual F&O participants incurred net losses…
Value investing course
Marathon’s Capital Cycle Theory: The Supply-Side Framework That Spots India’s Next Multibagger Industries Before the Headlines Do
Marathon Asset Management's Capital Cycle Theory tells Indian value investors to count plants, not consumers — the supply-side framework that predicts industry returns better than any…
Behavioural finance
Choice Overload & The Paradox of Choice: Iyengar & Lepper’s 2000 Jam Study and Sethi-Iyengar-Huberman-Jiang 2004 401(k) Evidence
In May 2026, the average Indian retail investor with a demat account can choose between roughly 5,000 listed equities on the NSE and BSE combined, ~1,500…
Behavioural finance
CEO-to-Median-Employee Pay Ratio: Companies Act §197(12) Read With Rule 5(1)(i)
If a value investor were allowed to study exactly one governance disclosure in an Indian annual report, the smart choice would not be the audit report,…
Value investing
Chris Mayer’s 100-Baggers Framework: The Seven Empirical Attributes Behind Every Hundred-Bagger Stock
In 2014, Christopher Mayer, then a portfolio manager at Bonner & Partners and now at Woodlock House Family Capital, set out to answer one question that…
Behavioural finance
Negativity Bias: Baumeister, Bratslavsky, Finkenauer & Vohs (2001) ‘Bad Is Stronger Than Good’
If you have ever opened your portfolio after a bad market day and felt the loss with a sharper, longer, more visceral pain than the equivalent…
Behavioural finance
Audit Committee Composition and Independence: SEBI LODR Regulation 18 and Companies Act Section 177(2)
When the National Stock Exchange of India crossed the eleven-crore registered investor mark in early 2026 — having scaled from roughly three crore in 2020 —…
Behavioural finance
Chuck Akre’s Three-Legged Stool: The 25-Year Compounder Framework
When Charles T. Akre Jr. — the soft-spoken Virginia investor who turned a small boutique into a multibillion-dollar compounding machine — was asked at a 2011…
Behavioural finance
The Outsiders Doctrine: William Thorndike’s 2012 Study of Eight Unconventional CEOs and the Five Capital-Allocation Choices That Built ~20% Annual Shareholder Returns
Some of the greatest fortunes in American corporate history were not built by the most charismatic operators, the loudest brand-builders, or the most aggressive empire-acquirers. They…
Behavioural finance
The Conjunction Fallacy: Tversky & Kahneman’s 1983 ‘Linda Problem’ — Why Indian Investors Believe Elaborate Multi-Leg Bull Theses Are More Probable Than Simple Ones
“In 1983, Amos Tversky and Daniel Kahneman published a six-page paper in Psychological Review with one of the most counter-intuitive results in cognitive psychology: when given…
Behavioural finance
James Montier’s Modified C-Score: The 6-Variable Cooking-the-Books Detector That Complements Beneish M-Score and Piotroski F-Score
India now has over 11 crore unique investors registered with NSE as of 2025 — up from barely 3 crore at the start of the decade.…
Behavioural finance
Capacity to Suffer: Tom Russo’s Doctrine on Why Long-Term Compounders Tolerate Short-Term Reported-Earnings Drag
Most Indian retail investors look at a quarterly result, see a margin dip or a flat top-line, and immediately ask the wrong question: “Has the business…
Behavioural finance
The Bias Blind Spot: Pronin, Lin & Ross (2002)
In April 2002, Stanford social psychologist Emily Pronin and her colleagues Daniel Lin and Lee Ross published a paper in the Personality and Social Psychology Bulletin…
Behavioural finance
Vigil Mechanism & Whistleblower Policy Disclosures: SEBI LODR Regulation 22 and Companies Act §177(9)
India’s equity investor base has multiplied roughly four-fold in seven years — from ~3 crore unique investors in FY18 to over 11 crore registered NSE investors…
Value investing
Buffett’s Four Filters: The 1977 Berkshire Letter Acquisition Checklist Refined in the 1994 Owner’s Manual
Warren Buffett does not actually invest. He filters. The investment is what remains after four filters have eliminated everything that does not belong. He has said…
Behavioural finance
Board Meeting Frequency: SEBI LODR Regulation 17(2) and the Forensic Governance Engagement Test
India’s retail investor base has gone from roughly 3 crore unique PAN holders at NSE in March 2019 to over 11 crore in 2025 — a…
Value investing
The Klarman Doctrine: Seth Klarman’s 1991 ‘Margin of Safety’ Three-Pillar Architecture — Why Absolute Returns, Bottom-Up Bargain Hunting, and Risk Aversion Define the Real Value Investor’s Edge
Most readers think Klarman’s book is a longer, glossier explanation of Graham’s “buy a sixty-paise rupee” idea. It is not. Read the contents carefully and you…
Behavioural finance
Myopic Loss Aversion (Benartzi & Thaler 1995): Why Indian Retail Investors Sabotage Long-Term Returns by Checking Portfolios Too Often
In 1995, two behavioural economists — Shlomo Benartzi and Richard Thaler — published a paper that won Thaler the 2017 Nobel Memorial Prize in Economic Sciences.…
Behavioural finance
Net Debt to EBITDA Ratio: The Single Solvency Test Credit Analysts Care About Most
Almost every Indian retail investor learns to look at Debt-to-Equity, EPS, and P/E. Very few learn to look at the single ratio that professional credit analysts…
Behavioural finance
Look-Through Earnings: Warren Buffett’s 1990 Berkshire Letter Framework for Measuring Your True Portfolio Earnings
Open a brokerage statement in India today and you will see one earnings number that the system insists is “yours” — the dividend credit. Everything else…
Behavioural finance
Ambiguity Aversion: Daniel Ellsberg’s 1961 Paradox and Why Indian Investors Prefer the Illusion of Probabilistic Certainty in Weekly Options Over the Honest Uncertainty of Long-Term Equity
Daniel Ellsberg — later more famous for the Pentagon Papers, but in his Harvard PhD work a serious decision theorist — presented a deceptively simple thought…
Behavioural finance
EV/Sales Ratio: The Capital-Structure-Neutral Revenue Multiple Every Indian Long-Term Investor Must Master
The number of registered investors on the National Stock Exchange has multiplied from roughly 3 crore in 2020 to more than 11 crore by early 2026…
Behavioural finance
Peter Lynch’s Six Categories of Stocks: The 1989 ‘One Up on Wall Street’ Classification Discipline Every Indian Investor Must Master Before the Next Multibagger Hunt
Peter Lynch's six-bucket classification — slow growers, stalwarts, fast growers, cyclicals, turnarounds, asset plays — is the discipline that prevents Indian retail investors from applying the…
The securities quoted in these articles are for illustration only and are not recommendatory. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.