Posted on 02 January 2011
Tags: 6 million, balance, Business, costly venture, David Shorr, diverse in your investments, diversification, Diversified, diversified portfolio, diversified portfolios, Diversify, Exchange-traded fund, extraordinary stock, financial markets, Focused Investing, individual stocks, instance, investment, investment money, investor, investors, last straw, Lehman Brothers, losses, majority, Money, portfolio descends, risk, SEC, securities, small market investors, stock, unpredictability
The reason stated for David Shorr (a former Lehman Brothers employee) to have lost $6 million overnight was that he did not diversify.
Why Should We Diversify?
The main intent of diversification is dispersing the investment money so as to minimize the risk of losing the entire investment.
Why People Avoid Diversification
The basic reason why majority of investors do not invest in a variegated portfolio is because it would take the focus of their investment off the individual extraordinary stock that may score the most at the market. Thus by dividing their investment they would limit their soaring potential. However there are high risks involved in focused investment. Picking out the extraordinary stock in itself is a challenging task even for the most competent pro investors.
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Posted on 18 August 2009
Tags: Banks, borrowers, capital expenditures, central bank, credit, creditworthiness, dollars, domestic banks, emergency lending program, financial crisis, financial markets, government, government studies, Great Depression, households, inventories, liquidity, Loans, Mortgage, Prime mortgages, public sector, U.S. Federal Reserve, US demand, US Treasury Department
According to the central bank and government studies, the US demand for loans fell in the second quarter for every major category bar prime residential mortgages due to tightened credit standards set by the banks making the borrowers cautious.
The US Federal Reserve observed in its quarterly survey of senior loan officers, conducted between July 14 and July 28, that the percentage of banks that tightened loan standards for business and households was slightly lower than in the first quarter.
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Posted on 03 April 2009
Tags: causes of inflation, central bank, cheap chinese goods, China, chinese goods, Currency, demand, Dependence on Foreign Oil, economic growth, economic myths, energy, energy prices, expensive oil, financial markets, food, foreign oil, higher oil prices, imports, India, inflation, inflation myths, international trade, money supply, oil, oil prices, rising oil prices, supply, supply and demand, united states
Minds of most Americans have been corrupted with many economic myths by mainstream economists and so called experts, which are reinforced by the media and often repeated on the streets. These myths are false in most cases, and based on half truths in others. We constantly hear things like: inflation is caused by rising oil prices; consumption is the most important element for economic growth; government expenditures help stimulate the economy; and many others.
In this article, First in a series of two, I will explore some popular myths regarding Inflation and Energy matters. In the second article, I will write for you about common myths about Consumption.
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Posted on 30 January 2009
Tags: 42nd President, Abbi Cohen, AIG, Alan Greenspan, America, american, American International Group, analyst, Andrew Lada, author, bank, Banks, Bark up the wrong tree, Ben Bernanke, Bill Clinton, Bill Gates, Britain, California, Case Study, crisis, derivatives, Doom, Europe, Federal Reserve System, Finance, financial, financial crisis, financial markets, founder, Franklin, Geir Haarde, George Soros, George W Bush, Goldman Sachs, Goldman Sachs Bank USA, Gordon Brown, greed of Businessmen, Guardian, Hank Greenberg, head, Henry Paulson, Iceland, idiots gave opportunity, idiots who gave me the opportunity to become rich, influential financier, investment, investment banks, John Paulson, Kathleen Corbet, Lehman Brothers, Lewis Raneri, market, Meredith Whitney, Minister of Finance, New York University, North America, Nuriel Rubin, people, political short-sightedness, President, Prime Minister, Professor, Richard Fuld, S&P 500, Sleeping over the Crisis, Standard & Poor's, Steve Jobs, strategist, the Guardian, U.S. Federal Reserve, U.S. Treasury, United Kingdom, United Socialist States of America, united states, United States Congress, United States of America, Wall Street, Warren Buffett, world
Guardian in a recent report revealed the perpetrators of the global financial crisis. It revealed their names and photos too. The British Guardian newspaper on Monday published a list of people whose work has proved fatal for the world economy. Lies have been told by both policy makers and business sharks.
The publication also listed visionaries who, warned us long before the actual crisis hit our shores. Unfortunately for the all us, these people were not involved in the process of decision-making.
In its famous “black list” Guardian has 25 spots. Almost half of them are filled with the people that have something to do with economic crisis of today. here are some of political and financial heavy weights.
Bark up the wrong tree “guru”
Alan Greenspan, head of the U.S. Federal Reserve( 1987 to 2006), is on the list at number one. The most influential financier has received from fans the world title of “guru”, “oracle” and “maestro”. In the delight of observers led his calmness with which Greenspan has held America through crises of 1987 and 1991, as well as the collapse of IT-industry in 2000 and panic in the markets that followed the September 11, 2001. It was Greenspan in early 2000 pursued a policy of low rates of the Fed, which led to easy money and irresponsible distribution of loans by banks. Moreover, the head of the Fed encouraged mortgage borrowers to take loans with floating rates. When rates inevitably increased after the tightening of fiscal policy in the middle of this decade, the people proved to have nothing to pay sharply increased the cost of credit.
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