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Warren Buffett’s dictates can fox even the savviest of investors. When ace fund manager Samir Arora got perplexed, he sought help and Prof Sanjay Bakshi bailed him out with a clear cut explanation
It is intriguing that while one ace stock wizard of impeccable credentials sees no merit in a stock and dumps it, another of equally impeccable credentials sees much merit in it and buys it aggressively. We need to understand why there is such difference in the thought process of the two stalwarts and what our own decision should be
Prof Sanjay Bakshi, the authority on value investing, has propounded the startling theory that an aversion for loss can turn a conservative person into a gambler. The Prof explains that this paradoxical situation occurs because we lose sight of the distinction between “loss aversion” and “risk aversion”. In seeking to avoid “loss”, we miss out on great investment opportunities and also expose ourselves to risk says the Prof
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