The answer may surprise you!
Neurologists learn in medical school that the brain can't change, isn't plastic, can't repair itself; MBAs learn that the global investment market is efficient.
No matter what data, experiments and research show, dogmas continue.
Thus, neuroscientists have proven over and over again how the brain adapts, heals - sometimes astonishingly fast (Read 'The Brain that Changes Itself' by Norman Doidge or 'The Tell-tale Brain' by VS Ramachandran for the fascinating experiments and evidence) but neurologists, by and large, continue with the dogmas they were taught.
Finance professionals stick to the Efficient Market Theory, disregarding the evidence of their own eyes - in an extraordinary display of ostrich-like behaviour.
After all, if a stock price can easily have a 50% range in a quarter with no fresh news flow, how can every price be 'right and efficient'?
Another instance, look at the calculation of Beta - try actually doing it for actual stocks and you will come up with completely different values for different time periods or phases of the stock market, meaning the calculated value is not something which can be used for any predictive purpose.
For example, often you will find that an outperformer rises more than the market in an upmarket and falls less than the market in down markets.
In the last few years, such stocks on the Indian stock market have included names like Mindtree, Deepak Nitrites, Havells India etc; in the US these have included Nvidia, Eli Lily, Target, AMD and several others.
The question: is the Beta of such stocks less than one or greater than one, because the calculated Beta will be over 1 in bull phases and less than 1 in bear phases.
This is at the simplest level without going into any arcane theory or mathematics.
The truth is that neither the assumptions, nor the assertions of an efficient market hypothesis come through in real life.
Moral of the story: Please put Data before Dogma.
Look for evidence and open your eyes to the data instead of seeing what you want to see.
And yes, your teachers and textbooks may have been wrong!
#DatabeforeDogma
From the desk of Devina Mehra
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Economists Think Dollar's Fall May Explain the Recent ‘Rally’ by Steve Liesman
Einstein taught us about relativity in nature. Now come Devina Mehra and Shankar Sharma of First Global to teach us about relativity in financial markets -- and raise some serious questions about just what is driving stock prices.
First Global reports are quite credible and, on occasion, more than that.
What prompts this mention is Intel's earnings report and the fact that First Global has had a pretty good bead on the company and its stock.
AMD up again following First Global upgrade to ‘buy’ (AMD) By Tomi Kilgore
Analyst Kuldeep Koul at First Global upgraded Advanced Micro Devices (AMD) to "buy" from "outperform," given the "exceptional traction" that the chipmaker's Opteron line of processors has been able to get.
Baidu Climbs on First Global’s ‘Outperform’ Outlook
Baidu Inc., the operator of China’s most-used Internet search engine, rose to the highest price in two weeks after First Global rated the shares “outperform? in new coverage.
Personality counts: Walmart's frugal, but Target charms
"It's better to take a slight hit on [profit] margins and keep on moving and inventing," says First Global Securities. And at least for now, Target is inventing in a way that appeals to consumers with money to spend.
Dead Batteries
At 11 times trailing earnings, Energizer is cheaper; Gillette's multiple is 25. But cheaper doesn't mean better, says First Global.
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@KarmathNaveen the person with whom I always interact
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We can load above testimonials on site as a scroller, and just below that we can add a section for compliments . Below tweets are comments and praises are related to our content, performance and some our direct compliments to you.
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Good team...
Special mention @KarmathNaveen .. he is soo helpful anytime of the day or night..
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Bought Peace with FG-Hum.Moving all funds from DIY investing to well managed and diversified PF at low cost.
It has doubled almost, excellent pick.Every small investor must invest in her FG-HUM Smallcase.
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I have 8 small cases and your has been the most rewarding ones .. thank you Devina.
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There is absolutely no doubt that she is one of the best investors of India in modern times but more importantly, she shares the most sincere and sane advice with retail investors.
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You are one of the sharpest mind in Global Stock Market
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Congratulations Devina, results talk in itself!
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Sumit Sharma @MediaSumit
"The ability to be comfortable with being outside consensus is a superpower in investing...and in life." Devina ji hits the nail on its head!
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Congratulations @devinamehra mam! All the best for long term returns as well.
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This is the wonderful session I have ever attended till date. One of the most fruitful hour of my life. Devina madam, ur clarity on financial mkts is simply superb.The way u portray the facts supported by "data" about stock mkts is really astonishing.I will listen again.Thanks.
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I loved to read your journey, insight and philosophy. It's a pleasure to read and know of your takes on market and life.
MNC🏹 @Focus_SME
Check & follow @devinamehra's timeline for lots of post debunking such rosy stories. Also, she gives amazing 🤩 sector directions/hints.
KLN Murthy @KLNMurthy2016
Good actionable insights, great article!
Suresh Nair @gkumarsuresh
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Very difficult to emulate such traits. I listen her past interviews from youtube.
Respect...!!!!
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One of the brightest minds in the world of finance :)
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siddarthmohta @siddarthmohta
Excellent performance. Flexibility is the key as you have mentioned it earlier also. Cannot have finite rules for infinite mkt opportunities.
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To be honest, the insights which Devina madam brings in is very enriching..have learnt a lot from them...
Himanssh Kukreja @Himansh02428907
One of the most accurate analysts :)
I always look forward to you interviews mam
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Madam, It is always a treat to read your insight, not only on business but on other topics also!!
Dada.AI @dada_on_twit
Thanks for this wisdom ma'am. Always love hearing your thoughts on everything equity. :-)
adil @zinndadil
Excellent points!
Can clearly feel this thread is a product of marination of many books and years of experience. 👍
Kamal thakur @Kamalgt10
Superb !!
Your knowledge, analysis & articulation is simply great 👍
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Follower on Twitter and Subsciber on YouTube of First Global, really helping me in my investment desicion. Thanks
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