How did Citibank formulate stupid investment decision?
On Jan 16, 2008, there is a communication that Citibank lost almost 10 billion dollars due to mortgage crisis. I thought anyone with some adjectives sense would think it be very risky to lend money to home buyers beside little or no down payment during previous few years. Citibank should enjoy top financial advisers; and they should fashion better decisions than adjectives educated empire. What were reason behind their stupid investment decision?Answers: Greed and mimicry
Bizarrely, emotions are normally stronger than reason,
* even when money is at stake,
* even when folks are knowledgeable and intelligent,
* even for big outfits near armies of analysts and access
to tons of information.
Those blunders are nothing mysterious. "Behavioral
biases" are adjectives over the place, for individuals as well
as for organization (politics also give heaps examples).
Those quite adjectives phenomena (labeled "bounded
rationality", to be politically correct, instead of stupidity :-))
have largely be studied by behavioral finance
researchers, as explained surrounded by:
http://pagesperso-orange.fr/pgreenfinch/...
A stimulating topic!
.
They were not alone. It wasn't their direct lend - it was their aggressive purchase of subprime mortgage CDOs.
Where is the best place to shift online for a crash course within Stocks/buying & selling?
any ideas?gratefulness
Answers: Check out Investopedia. They have articles and tutorials on most aspects of investing and a stock simulator so you can practice. You can swot quite a bit within.
http://www.investopedia.com/Default.aspx...
Beating the market is something that abundant pros won't accomplish, so an amateur with a crash course ain't gonna verbs it off.
Suggestion: Buy an index fund whose holdings are proportional to the open market...no decisions, and you do as economically as the market does. An index fund is automatically diversified, too...so one company's wipeout wouldn't whip your cash near it.
If writers of investment courses were adjectives that, they wouldn't need to write investment courses to fashion money.
motleyfool.com has some pretty angelic basics.
I would truly recommend some books instead. Jim Cramer's mad money, sane investing contained by an insane world is a very well-mannered book about the ground rules and fundamentals. I have read it and its a pretty undemanding read with deeply of good fundamentals. I have a friend that recommend, I think its call, buffetology. Another good book on the rudiments.
Investopedia is great. Here is another basic site that covers the entire financial planning process at a hugely high even:
http://www.nouns.cch.com/
Let me preface my response by saying that I don't own any financial interest in the outfit I'm roughly to suggest.
I'm going to suggest that you look at a website that isn't exactly an "online crash course" but it will get you in attendance. The Online Trading Academy is one of the finest programs that I know of. http://www.onlinetradingacademy.com.
They do a phenomenal job of training year traders, and you use THEIR money while you're being trained. The firms that provide DAT (direct access trading) enjoy learned that OTA former students become so successful that they will refund the cost of your tuition to OTA.
All of that be a preface. When you navigate to the OTA website you'll find a lot of college resources that are absolutely free. Videos on how to read charts, how to do intraday trading, how to spot trends, how to determine entry and exit points, etc. etc.
You can bring back a pretty good tuition there. But past you go within you'll probably need to achieve up to speed on some of the basic poetry of trading and investing in lay down to understand what you'll see on the OTA website.
One later thing - several friends of mine who are profoundly smarter than me have taken this training. Some trade stocks intraday, some are swing traders, and some do Forex. Every one of them have made a lot of money doing this.
The with the sole purpose reason I don't is that I don't hold the time. I have a 50 hr. + assignment that I absolutely love. I can solitary devote about 30 minutes a time to my portfolio, so I follow a different model.
Check it out!
What are your planning for the stock HIMX?
Recently teamed up with 3M a great company by the process to develop products. low debt, chinese based. Looks great to me, what are your thoughts?Answers: I'm glad you took become aware of of this stock. Typically, one of the investment rules I share with copious other fund managers is: Never buy a stock that underneath $10 a share because they are cheap for a reason. They arent worth much. However, HIMX is a stock that I believe have life departed. If it was trading at $7, I'd utter don't buy. However, its been crushed down a bit and is trading around $5. I say buy. They hold growth, accelerated profits, ROE is decent, dosh flows and balance sheet looks devout and they should continue to be slightly profitable. If you pick it up now contained by the low $5's, you will be fine. I see it hitting around $7.5 at least. Dont expect it to hit $10 but still, you hold a great chance of getting a nice profit
here is how I see it:
on the plus side:
-PEG is .49
-they enjoy partnered with 3M to produce a product, this medium that they won't go beneath
-no debt
-insider ownership at 46%
on the downside:
-they are chineese, as a contrarian and a watcher of the communication I would have to right to be heard that the chineese market is ripe for collapse. Buffett have warned against investing at hand and the government is doing everything possible to slow the growth
-the stock have stunk since its IPO, it has nonetheless to make a sustained climb contained by price
-they make equipment to be precise very tied to the discount, if the economy isn't appropriate people dont buy strange expensive equipment, which is essentially what they make the components for. purely about everyone is expecting a recession or bland growth so their product demand most promising wont grow
with the above information taken into details I would give the stock a hold rating. I cogitate that given a year you can get it at a significantly discounted price. it indeed has appealing upside but it have just as strong downside risk.