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📈 Market Kya Lagta Hai
Nifty 50 🔻-0.82%
Midcap 150 🔻-2.39%
Smallcap 250 🔻 -2.81%
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Sectors in Focus
Major Corporate Developments This Week
- Welspun Specialty: Co secures rupees 231.78 cr order from BHEL for stainless steel seamless boiler tubes.
- Brigade Enterprises: Brigade Group announces the launch of Brigade Eternia in Yelahanka, Bangalore || Revenue potential of over ₹2700 crores; project to be completed by March 31, 2030.
- KPIT Technologies: Qualcomm Ventures is introduced as third shareholder in Qorix GmbH || Qualcomm has option to increase shareholding in Qorix up to Euro 10M.
- Timken India: Co to enhance capacity at Jamshedpur || Investment of approx. 1.20B rupees || Capacity for cup and cone for rail bearings to increase by 20%.
- G R Infraprojects: Co emerges as selected bidder for National Highways Authority of India (NHAI) project worth 42.63B rupees.
- VA Tech Wabag: Co secures orders worth 3.60 billion rupees.
- Polycab India: Co secures rupees 3003 cr BSNL contract for BharatNet project in Bihar.
- Zydus Lifesciences: Zynext Ventures invests in Illexcor Therapeutics || Investment to advance novel oral therapy for sickle cell disease.
- Jubilant Pharmova: Jubilant Cadista facility receives EIR with VAI status from USFDA || Inspection successfully closed with EIR receipt from USFDA.
- Carysil: Co enters agreement with Karran to supply quartz sinks || Co to produce 150,000 quartz sinks per annum from May 2025.
- Bharat Electronics: Co wins order worth 2,463 cr rupees.
- Tata Motors: Co's luxury unit Jaguar Land Rover shelves plan to build EVs at $1 bln India plant.
- JK Lakshmi Cement: Co to invest ₹11,000 crore in Assam for new cement plant.
- PB Fintech: Co to invest rupees 696 cr in PB Healthcare Services, co unit, via equity shares or CCPS.
- CG Power: Co receives approval from the CFIUS for acquiring the radio frequency components business of Renesas Electronics America Inc. and affiliates.
- CG Power: Co secures order ranging between 400 - 450 cr for supply and servicing of railway products towards manufacturing of Vande Bharat trainsets.
- E2E Networks: E2E Cloud launches Sovereign Cloud Platform, empowering nations and enterprises with complete cloud control.
- Emcure Pharmaceuticals: Co announces entry into daily supplements space with expansion of ARTH range.
TechnoFunda Investing Quote from Legends -
Peter Lynch’s quote emphasizes that wealth creation isn’t just about earning money—it’s about how effectively you save and invest it. Many people focus solely on increasing their income, but true financial prosperity comes from putting money to work through disciplined saving and smart investments. Over time, compounding amplifies the returns on invested money, allowing wealth to grow exponentially. By consistently investing rather than merely spending, individuals can secure long-term financial stability and prosperity.
📚 Book I'm Reading This Week
In Confessions of Stock Market Wizards, Safir Anand gets India's top investors and stock market legends, such as Ramesh Damani, Samir Arora, Madhusudan Kela, Vijay Kedia, Devina Mehra and E.A. Sundaram, among others, to open up about their investing mistakes and, as a result, their biggest moments of learning. Be it an error of omission, an error of commission or a decision that appeared perfectly fine during a bull market but proved costly during market slowdown, each of the confessions in this book has a unique learning and perspective to offer. Candid and illuminating, this one-of-a-kind book provides readers unmatched insights into the skills needed in stock market and investing.
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TechnoFunda 101 - Power Capsules
Learn technical as well as fundamental concept in a simple way
Loss Aversion in Behavioral Finance – Why We Fear Losing More Than We Love Winning
In the world of investing, the fear of losing money often outweighs the excitement of making a profit. This phenomenon is called Loss Aversion, a cornerstone concept in behavioral finance. Let’s explore how loss aversion impacts decision-making and how investors can overcome this bias to make better financial choices.
What is Loss Aversion?
Loss aversion is the idea that people feel the pain of losses more intensely than the pleasure of equivalent gains. For example:
- Losing ₹1,000 feels significantly worse than the joy of gaining ₹1,000.
This psychological bias often leads to irrational decisions, such as holding onto losing investments for too long or avoiding risk altogether, even when the potential rewards outweigh the risks.
How Loss Aversion Manifests in Investing
1. Holding Onto Losing Stocks
Investors may refuse to sell underperforming stocks because selling would “lock in” the loss. Instead, they hold on, hoping for a rebound, even when fundamentals suggest otherwise.
2. Selling Winners Too Soon
To avoid the risk of losing gains, investors often sell profitable positions too early, missing out on the full potential of the rally.
3. Avoiding Risk
Loss-averse investors may shy away from promising opportunities because the fear of potential loss overshadows the possibility of gain, leading to overly conservative portfolios.
A Real-Life Example: The Pain of Holding a Losing Stock
Imagine you purchased shares of a company for ₹1,000 each. Over time, the stock price drops to ₹700. Despite clear signs that the company’s fundamentals are deteriorating, you refuse to sell. Why? Because selling means admitting defeat and accepting the ₹300 loss per share.
Meanwhile, a new investment opportunity arises—one with strong potential for growth—but your capital is tied up in the losing stock. The result? You not only endure the loss but also miss the chance to recover by reallocating to a better investment.
The Science Behind Loss Aversion
Loss aversion is rooted in evolutionary psychology. For our ancestors, avoiding losses—like losing food or shelter—was critical for survival. This survival instinct persists today, even though financial losses don’t pose a threat to life.
In his groundbreaking research, Nobel laureate Daniel Kahneman demonstrated that losses are psychologically twice as impactful as gains. This disproportionate response explains why investors often act irrationally when faced with potential losses.
How to Overcome Loss Aversion in Investing
1. Set Clear Rules
- Use stop-loss orders to limit potential losses and avoid emotional decision-making.
2. Focus on Long-Term Goals
- Instead of fixating on short-term fluctuations, align your decisions with your long-term financial objectives.
3. Reframe Your Perspective
- View losses as part of the learning process. Every investor experiences them—it’s how you respond that matters.
4. Diversify Your Portfolio
- Spread investments across asset classes to reduce the impact of any single loss.
5. Seek Objective Advice
- Consulting with a financial advisor or using systematic investment strategies can help mitigate emotional biases.
Conclusion: Master Your Emotions, Master Your Investments
Loss aversion is a powerful force, but understanding its impact can help you make better financial decisions. By recognizing this bias and implementing strategies to counteract it, you can invest with greater confidence and clarity.
Remember, successful investing isn’t about avoiding losses entirely—it’s about managing them wisely while capitalizing on opportunities for growth. Embrace the process, and don’t let the fear of losing overshadow the potential for winning.
🎙️ My Weekly Podcast For You
Keep Compounding...
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Vivek Mashrani, CFA
Founder, TechnoFunda Investing
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