Skip to main content

Leverage is good when used smartly

Leverage attracts people and vice versa. Whenever we want to trade or in any case of acquisition, what we expect is not the mere margin profit, instead we shoot for highly leveraged return. This is primitive emotion of greed. People making fortune at investments are great example. They invest after checking the fundamental and what the balance sheet has to offer and invest. This is not an easy job. They wait for couple of year to compound with a hope of no economic depression and make lot of money. That is huge. Here, like many modern day technological leverages are not available, instead they rely upon the opportunity leverage. The future is full of possibilities and by their analysis they might have found out the future of the organisation is about to explode. These rich people are very keen at predicting the outcome by the current, which now has been one of the toughest job. Because of the exponential curve of growth, predictions are less probable to tryst upon. Yet wen predict a change, but the accuracy cannot be predetermined.

Even time allocating for fundamental analysis became so  relevant because of the uncertainty in behaviour. With more knowledge, we have diversified views and opinions. When masses diverse, the opportunity soars and predictions dries.

Investing in oil in the 70s is not a big deal. Mechanical industries was at its best and transportation was proliferating like a wildfire. There was immense opportunity. Yet some averse the industry and stuck at the everyday loop. But those invested a lot of money. They are still enjoying the late fortune. Now everybody is convinced ( and it is true) about the digital age. Digital industry isn’t just a progression of monomaniacal path, it is very well diversified and made a lot of confusion among baby investors. For the experienced ones, they are either sure or were left the industry. These new investors (including and mainly retail investors) are influenced by the leverage and expecting a moonshot return. With little experience and learning, especially in this highly unpredictable world, this might turn into a foolishness.

  Because focusing on leverage is not about learning to earn, it is about earning to expense. They are playing finance with lack of financial education. Leverage is incentive and inducing, but we have to play it smart  

Labels:

Comments

Post a Comment

Most viewed

Keep up with trend

It won't matter much whether the company is at the number one position in market cap, if it fails to keep up with the trend, it will go out of the business. there are a lot of examples in front of us. This busting off will result in the rise of the next big thing. The general motor was once the market cap champion. But the rise of the internet and technology brought thousands of companies, which now rules the entire business era. And companies in this field is now valued extremely high than any industry. The Internet gave access to the information that is once only available to the presidents and prime ministers to a common man. this is revolutionary and it changed the world. the world order keeps changing. every major change leads to revolutions. when this happens successfully with business, it is the next big thing.
Post a Comment
Read more

Traveling

Traveling may be expensive, but it offers a lot of exploration. We often tend to backnoff from travelling due to tightening money. Travelling should not be neglected. It gives us plenty of experiences and memories.
Post a Comment
Read more

Pandemic accelerated business

The pandemic like we know did more adverse effect than good ones. But it also made some industry to thrive. Mostly digitally pivoted industries found a rapid growth during these fields. When the whole world were instructed to be in home, the demand for online services soared. The entertainment industry which were struggling to survive made to the top. Thousands of digital based startups reached unicorn status. This is clear indication that where the world is going and how the future business model should be. Everyone knows that the world belongs to digital giants in the future. All of us are somehow spending hours and hours in the internet. Researchers indicates that this number will only go up. This is one of the reason we see a lot of tech startups founded by non techies. They saw the opportunity and tried their own hands. Even industries focusing of physical or tangible product and services are integrating their business to the internet. What this pandemic did was it accelerated...
Post a Comment
Read more

Correction happens

 Valuation should be taken into account before considering the investment. Once you find the company as overvalued, then you should stay away from it at least till correction. Correction is inevitable and for whatever it is, correction will happen sooner or later.
Post a Comment
Read more

Ideas surpassing the pull

 When we see people taking about the things that is not yet discovered or existing, we often refer them as nuts. Some of the things they were referring makes least sense. And the probability of making it to the real world is almost null. These crazy ideas never made the mediocre to astonish. Instead it induced them to criticize and drag it to the ground over time. Yet some ideas turned real and surpassed the resistance . This is not uncommon.   Most of the ideas still gets reverted by mediocre pull. This world would have been a different one if there is no pull. But these pulls are, like some other barriers, meant to cross. Almost everything new has to surpass this resistance. Of it is strong enough, it will break the barrier. The strength of idea is a by product of the source where it born. A rigid determined source can often disrupt the pessimistic ambient field. Many ideas backed by less driven person dies with fear. And couple of years later, someone with powerful mindset...
Post a Comment
Read more

Start-ups growing hub

Start-up ecosystem around the world is evolving. Whenever we talk of startups, there is a tendancy to sway towards American tech hub. But that is changing. Evey country learned those lessons form their mistake of letting companies go to hell. Now even states are focusing to build massive startup ecosystem. They found that today’s startup will bring lots and lots of wealth to their country. Countries even with a poor economic backgrounds are trying very much hard to involve youngsters to build their own ventures than finding a job. There are lot of motive behind this. One is that the government need not work hard to get every citizen employed. Even some companies could give jobs with attractive salary than the government jobs. Another one is paving the seed for the future. Younger generation see this evolution and male their way to the similar path. But it might take a lot of years or even decade to achieve this. Through giving incentives on local startups, these countries are attract...
Post a Comment
Read more

Leaving goods behind

 To become great we must let go of the good. Keeping the old prodigy and living in that term is certainly won't take us far. That is why we must adopt the fact that what bought us here won't take us there. we must always strive to become better each day to become great. Most people are averse when it comes to changing their beliefs and thereby changing their beliefs. The first and foremost is that it is hard and requires a lot of effort. But once we begin the journey to become great, we must adopt the habit of learning. Anything that requires the paradigm shift requires hardcore learning and never-ending questioning. But one thing for sure is that this journey will definitely reward the effort. 
Post a Comment
Read more