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Sectors in Focus

Major Corporate Developments This Week

1. Jio Financial: Incorporates wholly-owned subsidiary for distribution of financial products & allied services
2. OLA Electric: Ola Krutrim tied up with Lenovo to build AI chips and will deliver first AI chip 'Bodhi1' by 2026.
3. Paras Defence: Company gets Rs 305 crore order from L&T for electro-optics system
4. Power Mech: Company gets Rs 114 crore order from Coastal Energen
5. Apollo Hospitals: Company looking to widen margins as Apollo 24/7 and Apollo Health and Lifestyles expected to pick up momentum.
6. Patel Engineering: Company in process of securing hydroelectric power projects of around 38,000 megawatts through competitive bidding.
7. PC Jeweller: IDBI Bank approves one-time settlement proposal of company
8. Torrent Pharma seeks to raise $3 bn for KKR's stake in JB Chemicals
9. GR Infraprojects: Company gets LoI from REC Power Development for transmission project in Karnatak
10. Pearl Global: Company updates on plant operations in Bangladesh, company operating 100% of facilities at full capacity in Bangladesh
11. Cochin Shipyard: Commenced commercial operations at its International Ship Repair Facility (ISRF) in Kerala
12. Jindal Stainless: Company accredited as a qualified vendor by BrahMos Aerospace
13. Atul Ltd: U.S. FDA inspection at Company's unit Ambernath facility in Maharashtra concludes with zero observations
14. ONGC: Company gets government approval to invest up to ₹10,501 crore in ONGC Petro Additions Limited
15. Divgi TorqTransfer: Company wins order from Prominent Indian Automotive player for transfer case business.
16. Godrej Agrovet: Company will be setting up an Oil Palm Processing Milling in Tripura
17. Mazdock: Company wins order worth of Rs 4680 crore from ONGC
18. Lehar Footwear: Company wins order worth of Rs 298 crore

TechnoFunda Investing Quote from Legends -

Robert D. Arnott's quote, "In investing, what is comfortable is rarely profitable," emphasizes the idea that successful investing often requires stepping outside of one's comfort zone. Comfortable decisions usually align with popular trends or low-risk options, which can lead to mediocre returns. True profitability often comes from making bold, informed choices that might feel uncomfortable at the time, such as investing in undervalued assets, enduring market volatility, or going against the crowd. The quote encourages investors to embrace calculated risks and the uncertainty that comes with pursuing higher rewards.

📚 Book I'm Reading This Week Skin in the Game: Hidden Asymmetries in Daily Life Citizens, artisans, police, fishermen, political activists and entrepreneurs all have skin in the game. Policy wonks, corporate executives, many academics, bankers and most journalists don't. It's all about having something to lose and sharing risks with others. In his most provocative and practical book yet, Nassim Nicholas Taleb shows that skin in the game, often seen as the foundation of risk management, in fact applies to all aspects of our lives. In his inimitable style, Taleb draws on everything from Antaeus the Giant to Hammurabi to Donald Trump, from ethics to used car salesmen, to create a jaw-dropping framework for understanding this idea. List of All Books I have Shared →

TechnoFunda 101 - Power Capsules

Learn technical as well as fundamental concept in a simple way

Sunk Cost Fallacy

What is the Sunk Cost Fallacy?

The Sunk Cost Fallacy is when we continue investing in a project, stock, or asset, not because of its current or future potential, but because we've already invested significant time, money, or resources into it. The fallacy lies in the belief that we need to "recoup" our past investments, even when the best decision might be to cut our losses and move on.

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Why Does This Happen?

Humans are naturally loss-averse. We tend to fear losses more than we value gains. When we invest in something, whether it’s a stock, business, or even a relationship, we become emotionally attached to it. The more we’ve invested, the harder it becomes to let go, even if the original reasons for our investment no longer hold true. This emotional attachment can cloud our judgment, leading us to make decisions that aren’t in our best financial interest.

Real-World Example:

Imagine you've invested in a stock that initially seemed promising, but over time, the company's performance has deteriorated. Despite the clear warning signs, you keep holding onto the stock, hoping it will rebound, simply because you've already invested a significant amount of money in it. This is a classic case of the Sunk Cost Fallacy at play.

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How to Overcome It?

1. Reevaluate Regularly: Periodically reassess your investments without considering the amount already invested. Focus on the current and future potential.
2. Set Clear Goals: Have a defined exit strategy or stop-loss level for each investment. If the stock hits that point, be disciplined enough to exit, regardless of past investments.
3. Stay Rational: Remind yourself that past costs are irrecoverable and should not influence future investment decisions.

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Understanding and overcoming the Sunk Cost Fallacy can lead to more rational and profitable investment decisions. Remember, the best investors know when to let go and move on to better opportunities.

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🚀 My Content For This Week 🎬 YouTube: 7 Passive Income Ideas | How to Earn 1 Lakh+/month​ ​ ​ 📋 Twitter: Vivek Mashrani, CFA @MashraniVivek Ever wonder how some investors seem to consistently pick winning stocks while others struggle? Relative Strength is a powerful concept that compares a stock’s performance to the market. When used alongside fundamental analysis, it can help uncover potential top performers. https://twitter.com/i/web/status/1824777187779555839 5:25 PM • Aug 17, 2024 0 Retweets 0 Likes Read 1 replies ​

🎙️ My Weekly Podcast For You

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Keep Compounding...

Vivek Mashrani, CFA Founder, TechnoFunda Investing

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