I had an opportunity to hear Parag Parikh this week and I learnt that how human psychology is the biggest factor which determines his decisions when it comes to investments . From the stock markets point of view he gave some good examples and reasons why investors behave irrationally. Here is a very nice video from Parag Parikh who is talking on Decision Making process in Stock Markets. He talks about various aspects of Behaviourial Finance and how it applies in Stock Market. Its a good watch.
Conclusion
There are many factors which govern our decisions of buy/sell/hold in Equity markets, it can be Direct equity, Equity Mutual funds which we hold or in general thinking about stock markets , but out of all the factors, The way we think and act because of herd mentality is the biggest decider of how we will perform. Does this apply to you as well ? You can read more about behavioural Finance on this his website ppfas.com
Comments please . How do you take decision in stock market ? Do you make irrational decisions in the way its told in the vidoe ? Please share.
{ 20 comments… read them below or add one }
nice talk and very informative.. Thanks for posting this videos.
you may want to fix Part 3 of the video , it is pointing to Part 2 .
Sree
Sreekumar
Thanks
. I have updated the post again with 3rd video 
. My bad
Manish
Also there are 2 more videos (total 5 parts).
Ohh
Come did I miss that
. thanks for that . I have added them as well
Manish
also Mr. Parag Parikh talks about Decision making while we choose in the link ‘http://www.youtube.com/watch?v=JoI84RmIKl0&feature=player_embedded'- another set of good videos
Gowri
Great to see the link , How did you find it
Manish
His book on Behavioral finance is enlightening as well. I recommend everyone read that!
Pavan
I am planning to read that book soon . You seem to have read it already , can you give more info on the book and how is it ?
Manish
My views on his book:
Pros:
1. Excellent content – I’vent seen/heard of any such attempt at Indian markets before
2. Well organised and easy to understand
Cons:
1. Not very interestingly written, mostly text book style – my perception probably due to the nature of the subject
2. It is mostly a record-type of book. It explains the behavioral heuristics well but doesn’t tell the reader how to deal with them.
I would say the book would give maximum benefit to those investors who have seen at least 1 bull market and 1 bear. That range of experience will help readers apply those concepts retrospectively. And also that maturity is required to be able avoid those herd-behaviors in future.
Pavan
Thanks for the review
Manish
Hi Manish…
Really awesome articles…I have really learnt lot from your articles/videos. Thanks for all of them.
I have a question. Last quarter(April 23rd 2010), Wipro announced two things:
1)Two bonus shares for every three shares owned.
2)Dividend of 6 Rs per share.
I have around 60 wipro shares. Based on the above, I got 6*60=360 Rs. dividend.
But I did not get any bonus shares. I was supposed to get (60/3)*2=40 shares.
Also, Wipro did a share split of 5:3 later. So my 60 shares became (60)+(60/5)*3=96 shares.
But I dont know when I will get my bonus shares that was declared earlier.
I bought the shares before the announcement was done.
So will I be getting this still? Please help me find answer for my question.
Thanks.
KP
KP
I am not sure on this, you might want to check with Wipro officials on this .
Manish
Can anybody else help me on this.. I don’t know who to reach out….
Nice one Manish!
Chirag
Thanks
. I got a chance to hear Parag Parikh in person in Bangalore few days back , It was great
Manish
Hi Manish,
Hope you are doing great!!!
1) How about the services of PPFA in Financial Planning , they are charing 9000/- Rs per client when I asked about Financial Planning …
Is 9000/- not a big amount to charge for Financial Planning ?, How about middle class guys like us , who wants to have a better Financial Planning to our income which comes through salary ? Any better suggestions…..
Individual Planning and learning is there , but still if we want to have a better financial planning …..to our lives…which is the best place to choose ? , either online or offline and also the trust matters over here… Please advise…
2) Do you have any case studies or review from any one about their PPFA Finanical Planning to clients.
3) Is there any other best organization who do good financial planning apart from this , who gives value to the investor or client rather than getting the client purchase the products
I will wait for your comments and then take decision.
Cheers,
-Vik
Vikram
9,000 is not at all expensive for financial planning . I dont know if they sell products or not , but 9,000 is very price efficient . Financial Planning is something which is going to help you through out your life , it might be helping you save much much more than what you will pay for . There are good planners in market who will charge above 20k .
So better think “is giving 9k and doing financial planning expensive” or “Not doing financial planning” .
Manish
Nice one! Decision making is one of the crucial process in Investing!
Manish,
Kindly post some articles on trading….viz daily trading, BTST etc.
In present kind of market daily trading seems to be a better option than investing.
Your comments please
Amit Anand Agrahari
Amit
Article on trading is not high priority as there are very less readers interested in that and its not our focus area on JI . What kind of things you want to know ? Are you not getting them on other blogs ?
Manish