Sinewave Securities

This is part two of the series in which I have tried to combine and sort them topicwise. Black Sholes The Black-Scholes formula has approached the status of holy writ in finance, and is used when valuing equity put options for financial statement purposes. Key inputs to the calculation include a  contract’s maturity and strike price, as well as the analyst’s expectations for volatility, interest rates and dividends. If the formula is applied to extended time periods, however, it can produce absurd results. In fairness, Black and Scholes almost certainly understood this point well.

Few case studies and concepts by Buffett given through the newsletters are compiled topic wise. It combines Buffett’s magic and mind, simplicity and subtleness which results into extraordinary results overtime past 60 years has been provided in these newsletters year after year. The idea of ”praise specifically criticize generally” can be seen over the years in these letters over the years.

 𝗔 𝗖𝗼𝗻𝘃𝗲𝗿𝘀𝗮𝘁𝗶𝗼𝗻 𝘄𝗶𝘁𝗵 𝗖𝗵𝗿𝗶𝘀 𝗠𝗮𝘆𝗲𝗿 –Moderated by prof. Sanjay Bakshi. He talks about focusing illusion –whatever you are looking or thinking at the time has outsize support in your mind comes. Prof. Bakshi brings up a few questions from Chris Mayer’s book 100 Baggers.

Another book by Professor Jim Collins after Built to last, Good to Great and How does the Mighty Fall, Great by Choice showing - Why do some companies thrive in uncertainty, even chaos, and others do not? The method is similar (comparative historical analysis) and the question of greatness is constant. But in this study, unlike any of the previous research,  Collins selected cases not just on performance or stature but also on the extremity of the environment i.e. PERFORMANCE + ENVIRONMENT Starting from delving into what he learned about the individual people who led these companies, and in, how they led and built their companies differently from their less successful comparisons to studying luck. Collins defined luck, quantified luck, determined if the 10X cases were luckier (or not), and discovered what they do differently about luck. At the end of the book, the detailed methods of research, quantitative and qualitative parameters based on each type of analysis (10x, 20 Mil...

Originally what was designated to be an article which eventually got transformed into a small book. It emerged from the wildfire of 2008 GFC where majority of the markets crumbled. Stocks like Lehman Brothers collapsed into bankruptcy after 158 years of growth and success. Fannie Mae and Freddie Mac, crippled, succumbed to government conservatorship. Merrill Lynch, the symbol of bullish America, capitulated to a takeover bid. From “Good to Great” to “How does the Mighty Fall” - Principles in Good to Great were derived primarily from studying specific periods in history when the good-to-great companies showed a substantial transformation into an era of superior performance that lasted fifteen years. The research did not attempt to predict which companies would remain great after their fifteen-year run. Indeed, as this work shows, even the mightiest of companies can self-destruct. Collins uses data and collects a pack of about 11 companies- A&P, Addressograph, Ames Department Sto...

Jim Collins, Stanford graduate, after 5 year long research brings to us Good to Great –Why some companies make the leap and others don’t. Getting inspiration from Bill Meeham’s challenge to picking up 11 amidst 1435 companies, Collins decipher the formula from being good to great in step by step manner. The chapters takes up the case studies from each of 11 selected companies namely Abbott, Circuit City, Fannie Mae, Gillette, Kimberly Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens and Wells Fargo. The book lays down everything possible to decipher the greatness out of these selected companies, right from there selection process to performance over last 15 years and a common pattern found among all. Chapter One - Good is the enemy of the Great - This lays down the overview of the book, the purpose, process and pattern found in great companies. It summaries the entire book in less than 15 pages and guides about the concepts or ideas of convergence among great companies...