PEG Ratio: Peter Lynch’s Growth-Adjusted Valuation Framework
And yet, 11 crore investors and rising — most of them new to equities — are walking into Dalal Street with the bluntest, most over-used number…
Blog · Page 8
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
Walter Schloss’s 16 Factors: How Graham’s Quietest Disciple Beat the Market for 47 Years Without Ever Meeting Management
Most Indian investors who have read a few value-investing books know three names by heart: Benjamin Graham, Warren Buffett and Charlie Munger. A few will throw…
Behavioural finance
Outside View vs Inside View: Kahneman & Lovallo’s Reference-Class Forecasting Discipline
If you ask an Indian retail investor, “What return will your favourite small-cap stock deliver over the next five years?” you will almost always get a…
Behavioural finance
Beneish M-Score: The 8-Variable Forensic Model That Caught Enron Three Years Before Bankruptcy
According to the latest SEBI study on individual traders in the equity Futures & Options segment, 9 out of 10 lose money. Combine that with the…
Behavioural finance
The Twenty-Punch-Card Rule: Warren Buffett’s Lifetime-Scarcity Discipline for Indian Value Investors
In 1991, on stage at the University of Notre Dame, Warren Buffett offered a single thought experiment that, if taken seriously, would have saved Indian retail…
Behavioural finance
Book Value Per Share (BVPS) Compounding: Warren Buffett’s 53-Year Berkshire Yardstick
Most retail Indian investors stare at the share price 50 times a day and never look at the book value once a year. That single habit…
Behavioural finance
The Lollapalooza Effect: Charlie Munger’s 1995 Harvard Doctrine on Multiplicative Forces
There is a kind of investment outcome — both spectacular wealth-creation and spectacular wealth-destruction — that no single explanation ever fully accounts for. The 2008 Lehman…
Behavioural finance
Action Bias: Bar-Eli et al.’s 2007 Goalkeeper Study and Why Indian Investors’ Compulsion to ‘Do Something’ Destroys Long-Term Returns
Action bias is the systematic, cross-cultural human tendency to favour action over inaction even when inaction is the statistically superior choice. The bias kicks in hardest…
Behavioural finance
EBITDA Margin: The Profitability Yardstick Every Indian Value Investor Must Master
EBITDA Margin tells you, in a single number, what fraction of every rupee of revenue a business converts into earnings before paying interest, taxes, depreciation, and…
Behavioural finance
Stocks as Equity Bonds: Warren Buffett’s 1977 Equity-Bond Framework — Why Indian Long-Term Investors Should Treat Every Share Certificate as a Variable-Coupon Bond
One of the most useful sentences ever written about equity investing is buried in a 1977 Fortune essay titled “How Inflation Swindles the Equity Investor”. Warren…
Behavioural finance
Pre-Mortem Analysis: Gary Klein’s 2007 HBR Discipline for Imagining Failure Before You Invest
If you can imagine, in vivid and unflattering detail, the precise way an investment will fail before you ever click “Buy” — and write that obituary…
Behavioural finance
Return on Capital Employed (RoCE): The Single Most Important Profitability Metric for Indian Value Investors
Warren Buffett has called it “the single most important number in business analysis.” Charlie Munger built much of Berkshire’s bolt-on acquisition discipline around it. Indian equity…
Behavioural finance
Second-Level Thinking: Howard Marks’s First-Chapter Discipline for Indian Value Investors
Most Indian investors I meet on Dalal Street are intelligent, well-read, and sincerely trying to compound their savings. Yet the majority will earn returns that lag…
Behavioural finance
Representativeness Heuristic: Why Indian Investors Confuse “Looks Like the Next Multibagger” with Probability
Read time: 12 minutes. Reading level: serious long-term investor. The single most expensive shortcut in your stock-picking process is the one you don’t notice you are…
Behavioural finance
Capex-to-Depreciation Ratio: The 60-Second Reinvestment-Discipline Filter Every Indian Value Investor Must Master
Every Indian investor has heard Warren Buffett’s famous line that “the most important number in financial statements is the one we never see.” That number is…
Behavioural finance
Mr. Market: Benjamin Graham’s 1949 Parable for Treating Daily Quotes as Offers, Not Verdicts
Benjamin Graham wrote the most useful four pages in the entire history of investing in 1949, and the average Indian investor in 2026 still hasn’t read…
Behavioural finance
Status-Quo Bias: Samuelson & Zeckhauser’s 1988 Cognitive Anchor That Keeps Indian Investors Stuck in Regular MF Plans, Old Brokers and Drifting Allocations
Samuelson and Zeckhauser defined status-quo bias as the systematic tendency of individuals to disproportionately stick with the current option whenever a “do nothing” choice is available.…
Behavioural finance
Interest Coverage Ratio: The 30-Second Solvency Filter
The Interest Coverage Ratio measures how many times over a company’s operating profit can pay its interest bill. Conceptually, it is the financial-statement equivalent of a…
Value investing
The Maximum Pessimism Rule: Sir John Templeton’s Contrarian Doctrine for Indian Value Investors
Sir John Templeton's 'buy at the point of maximum pessimism' rule is the most uncomfortable, most lucrative discipline in value investing. Here's how Indian value investors…
Behavioural finance
Free Cash Flow Margin: The One Number That Separates Real Profits From Accounting Illusions
Most Indian retail investors stop their fundamental analysis at net profit. They look at the bottom line, multiply by a P/E ratio, and decide whether the…
Behavioural finance
Regret Aversion Bias: Why Indian Investors Dread the Decision More Than the Loss
Regret aversion (also called regret aversion bias or regret theory) is the tendency to anticipate the painful feeling of having made a wrong decision and to…
Behavioural finance
Inventory Turnover Ratio: The Asset-Productivity Metric That Reveals Operating Discipline
The Inventory Turnover Ratio answers a deceptively simple question: How many times in a year does a business sell through its average stockpile of goods?
Behavioural finance
The Too-Hard Pile: Charlie Munger’s Cognitive-Humility Discipline for Indian Value Investors
Most of the disasters I have watched investors walk into over the last twenty-five years did not happen because they did not understand the company. They…
Behavioural finance
System 1 vs System 2 Thinking: Daniel Kahneman’s Dual-Process Framework for Indian Long-Term Investors
Daniel Kahneman’s dual-process theory is the most quietly powerful idea in modern behavioral finance. Master it, and you stop fighting the wrong battles inside your own…
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.