A Quote by Chanda Kochhar
Every quarter, we need to see the portfolio and follow the accounting practice of mark-to-market that values investments according to the prevailing market prices and at the price at which they are made.
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We don't understand the equity market well, and so we deploy funds in fixed-income securities, and like any other securities, investment in those securities also need to follow the mark-to-market accounting principle.
A market economy is a tool - a valuable and effective tool - for organizing productive activity. A market society is a way of life in which market values seep into every aspect of human endeavour. It's a place where social relations are made over in the image of the market.
Whereas a competitive firm must sell at the market price, a monopoly owns its market, so it can set its own prices. Since it has no competition, it produces at the quantity and price combination that maximizes its profits.
In a free market capitalist system, 'price signals' are everything. Prices are determined by buyers and sellers in the free market, and these prices are broadcast from the exchanges, reaching all corners of the economy - where they are used to transact business.
Having the opportunity to follow the market frequently gives you the opportunity to see if you need to reevaluate your portfolio. But reevaluating your portfolio shouldn't trigger a sell signal so frequently.
In order to understand the movement of prices, you need not an oscilloscope to measure the entire market and reduce it to noise, but a microscope to investigate the creative process behind every company and its price.
To invest successfully, you need not understand beta, efficient markets, modern portfolio theory, option pricing or emerging markets. You may, in fact, be better off knowing nothing of these. That, of course, is not the prevailing view at most business schools, whose finance curriculum tends to be dominated by such subjects. In our view, though, investment students need only two well-taught courses - How to Value a Business, and How to Think About Market Prices.
The most realistic distinction between the investor and the speculator is found in their attitude toward stock-market movements. The speculator's primary interest lies in anticipating and profiting from market fluctuations. The investor's primary interest lies in acquiring and holding suitable securities at suitable prices. Market movements are important to him in a practical sense, because they alternately create low price levels at which he would be wise to buy and high price levels at which he certainly should refrain from buying and probably would be wise to sell.
Clearly the price considered most likely by the market is the true current price: if the market judged otherwise, it would quote not this price, but another price higher or lower.
Mark-to-market accounting is like crack. Don't do it.
Speculators are obsessed with predicting: guessing the direction of stock prices. Every morning on cable television, every afternoon on the stock market report, every weekend in Barron's, every week in dozens of market newsletters, and whenever business people get together. In reality, no one knows what the market will do; trying to predict it is a waste of time, and investing based upon that prediction is a purely speculative undertaking.
In the 1987 stock market crash, according to the conclusions of the official Brady report, colossal sales of stock index futures by so-called portfolio insurers - whose investment strategies depended entirely on these derivatives - greatly exacerbated the 500-point market decline.
To economists, prices serve as crucial signals to producers and consumers. In a regulated market, the state sets prices high enough for private companies to cover their costs and earn a guaranteed profit for their investors. But in a deregulated market, prices should vary with demand and supply.
I think the market is always going to be around. The goal is not to say, let's get rid of the market, because the market does render a huge number of services, and I don't want to have a fight about the price of something every time I buy a book or a bottle of water.
There is abundant proof that the opening of our ports always tends to raise the price of foreign corn to the price in the English market, and not to sink the price of British corn to the price in the continental market.
Market prices for stocks fluctuate at great amplitudes around intrinsic value but, over the long term, intrinsic value is virtually always reflected at some point in market price.
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