Quest for some degree of certainty in share market By Ian D. Hetri The quest for certainty has played a considerable part in the history of philosophy, a field I am attracted and read a great deal. Philosophy maybe to the mind of an average reader, somewhat distant to economics, and precisely stock market. Some literature on philoshopy assume that without a basis of certainty, all our claims to knowledge must be suspect. The study of knowledge itself (Epistemology) is becoming a lucrative field with rich areas of research and possess commercialization potential. What I fear is that knowledge without certainty is vulnerable to the influence of untamed figment of ones imaginations. In financial markets, certainty and uncertainty fuel market sentiments that dictate share price movements. There is no guarantee that financial markets will in any given time offer some certainty for investors to forecast future share price movements. Nothing. But given a slight window, publicly listed companies do disclose their annual financial year performances where one can dig deeper to understand the business fundamentals of the security he anticipates to invest in. Unless somethings are certain, it is held, nothing can even be probable I repeat again, you can never be certain in share market. But knowing the underlying value of security you want to invest in and buying it at a price lower that its perceived or market value is a big step towards reducing your risks and maximizing your odds of success in financial markets. This to me gives some degree of certainty. Acclaimed authors Benjamin Graham and David Dodd, whom billionaire Warren Buffet regarded as mentors detail their all time value investment classical text Security Analysis. ***Authors note: Do share the post if you found something useful in the post. Do drop a comment and let me know what you think YourScribe
Posted on: Wed, 01 Oct 2014 21:02:56 +0000
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