now Karachi stock exchange will seed a shift in outlook!
Re: hi there business folks
Excellent point?
Re: hi there business folks
Excellent point?
I mean if the transactional interest rate is very short then there will be selling and change in outlook!
Re: hi there business folks
What point? Shift in outlook is when there is extra speculation in a major sector of goods one is looking at!
Re: hi there business folks
Anyways, I understand most of Black-Scholes- Merton Formula!
Re: hi there business folks
I mean if the transactional interest rate is very short then there will be selling and change in outlook!
What is "transactional interest rate (TIR)? Why would there be selling and change in outlook if TIR is very short?
What point?EXACTLY. Shift in outlook is when there is extra speculation in a major sector of goods one is looking at!
Is it always the case that there needs to be extra speculation for shift in outlook to happen?
Anyways, I understand most of Black-Scholes- Merton Formula!
That is very good you know the formula. These tech behemoth hide behind the excuse of its complexity to protest rules for expensing stock options. That is all I know abt this formula. Can you explain the formula?
Also didn't see the connection between this formula and the other points you raised.
Tell us more about the Karachi exchange - fairly valued?
Re: hi there business folks
The pricing formula is used for hedging! I don't know much abt extra that etc.!
Re: hi there business folks
Thank you chapter 2. Will google in evening and try to learn more abt the pricing formula. There r some business people here who probably know what this formula is.
Re: hi there business folks
First time I heard that interpretation of the Black Scholes formula. Not sure OP buys it, though.
Re: hi there business folks
The Black-Schoeles- Merton formula is for hedging off major portfolio of American or European stock index options. It is only true for countries indulging in foreign transactions like the Bombay exchange does!
Re: hi there business folks
^ OP, I didn't understand. Didn't get to Google yesterday. Will circle back to this maybe weekend.
If I may be allowed to veer off topic ever so slightly, the Bombay exchange is affectionately known as the Senseless exchange.
Re: hi there business folks
Southie, I am confused on this point too. I can of course understand the formula and bombay exchange, but I would like to know just how international is pakistan's premier stock exchange K.S.E on the port. Warna toa Bombay is known for its biryaani! Our textile for one is exported! So there is indeed some internationalism but of a confusing kind!
Re: hi there business folks
Am not very familiar with Karachi stock exchange. In fact I know nothing about it. And also don’t know much abt Bombay Sensex. I hear both KSE and SENSEX have gone up a lot?
You were right aby Black Sholes formula. Not sure if it is mumbo jumbo or if such things truly work. I like to keep it simple though. Cheers.
Re: hi there business folks
Southie, wah rai!
Re: hi there business folks
Tis nothing more then inflation my friend. Can’t wait until the money supply contraction begins, happy days!
The formula works if used correctly, the main thing is to respect and understand risk. Anyone can make money in a rising bull market.
Re: hi there business folks
Tis nothing more then inflation my friend. Can't wait until the money supply contraction begins, happy days!
The formula works if used correctly, the main thing is to respect and understand risk. Anyone can make money in a rising bull market.
Re the last sentence, if a person is lucky to be in a "rising bull market" then I agree. But not too many have identified the staying power of a "rising market" and when to get off the soul train.
Re: hi there business folks
Re the last sentence, if a person is lucky to be in a "rising bull market" then I agree. But not too many have identified the staying power of a "rising market" and when to get off the soul train.
There will always be booms and busts - expansion and contraction of the money supply. In the 18th century, America suffered 15 depressions, not recessions, depressions. Don't get me started on the 20th century.
Smart folks can figure out when to go and when to get out/change asset classes. I still think passive investing is better for the vast majority of investors, active investing and making gains beyond the average 20% year on year is a lost art form. I started work in the industry 1 month after the first run on a UK bank in over 100 years so I was bloodied in the industry pre bear stearns. Smart people were pulling out then and going to pure cash positions, gold, oil and precious metals. Learnt a lot back then from some very smart guys - but the vast majority of guys didn't have a clue as to what to do when things turn sour, they were great at being long run bull market investors.
Re: hi there business folks
There will always be booms and busts - expansion and contraction of the money supply. In the 18th century, America suffered 15 depressions, not recessions, depressions. Don't get me started on the 20th century.
Smart folks can figure out when to go and when to get out/change asset classes. I still think passive investing is better for the vast majority of investors, active investing and making gains beyond the average 20% year on year is a lost art form. I started work in the industry 1 month after the first run on a UK bank in over 100 years so I was bloodied in the industry pre bear stearns. Smart people were pulling out then and going to pure cash positions, gold, oil and precious metals. Learnt a lot back then from some very smart guys - but the vast majority of guys didn't have a clue as to what to do when things turn sour, they were great at being long run bull market investors.
Things in my opinion are not that complicated. The market valuations drive future gains. Being an investor for the long run always pays off. Only 20 pct of active "progessional" money managers beat the market. So right there passive investing puts one in the top 20 pct. Yes, in a down market one may temporarily lose money. But regular investment make a down market especially attractive for long term investor. Asset allocation and rebalancing twice a year should ensure investor has eggs in more than one basket to avoid egg in the face.
Since us market index funds r market cap weighted one can have his individual stock portfolio over weighed on value stocks especially in sectors that r underrepresented in the mkt index.
Re: hi there business folks
After a bloodbath one hears stories abt people who got out in time. And got back in in time. A small fraction of those stories could be true.
Leading up to financial crisis there was ample evidence ce things were fudged up. I didn't pay heed. But have only myself to blame. As buffet says know what u don't know. Keep it simple. Buffett don't pay too much attention to macro economy interest rates etc. He buys good companies at reasonable prices and holds on for long time.
Re: hi there business folks
If the trade volume is low the prices are low, and there is selling. when the volume is greater, the prices are high and there is more buying. the latter is a bull market. anyhow, in cases of arbirtrage, hedging is used and black-schoeles was invented to take care of risk! there is very little speculation in the market when there is a major trade-off risk in the stock exchange!