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  • Financial Crises? Here Is The Cure.

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    Rajesh Mudholkar
    17 visualizzazioni12 pagine
    For more than 50 years, one fundamental flaw had wreaked havoc in the corporate world, breeding 'Financial Crisis' like a silent cancer, undetected. Billions of dollars have been destroyed due to corporate bankruptcies, and entire economies suffered, while the root cause remained hidden. Even the 2013 Nobel Economics Prize Committee hit a dead end after several years of research by eminent experts in economic sciences, and minced no words in saying '“....we do not yet have complete and generally accepted explanations for how financial markets function......Mispricing of assets may contribute to financial crises”. But all this can become history, because the cure for the fiscal cancer has now been found.

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    Financial Crises? Here is the Cure.

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    For more than 50 years, one fundamental flaw had wreaked havoc in the corporate world, breeding 'Financial Crisis' like a silent cancer, undetected. Billions of dollars have been destroyed due to corporate bankruptcies, and entire economies suffered, while the root cause remained hidden. Even the 2013 Nobel Economics Prize Committee hit a dead end after several years of research by eminent experts in economic sciences, and minced no words in saying '“....we do not yet have complete and generally accepted explanations for how financial markets function......Mispricing of assets may contribute to financial crises”. But all this can become history, because the cure for the fiscal cancer has now been found.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Scarica in formato PPS, PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    17 visualizzazioni12 pagine

    Financial Crises? Here Is The Cure.

    Caricato da

    Rajesh Mudholkar
    For more than 50 years, one fundamental flaw had wreaked havoc in the corporate world, breeding 'Financial Crisis' like a silent cancer, undetected. Billions of dollars have been destroyed due to corporate bankruptcies, and entire economies suffered, while the root cause remained hidden. Even the 2013 Nobel Economics Prize Committee hit a dead end after several years of research by eminent experts in economic sciences, and minced no words in saying '“....we do not yet have complete and generally accepted explanations for how financial markets function......Mispricing of assets may contribute to financial crises”. But all this can become history, because the cure for the fiscal cancer has now been found.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Scarica in formato PPS, PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    di 12

    Rational Investor

    Vs.

    Corporate Finance

    Chronic conflict = Financial Crisis


    Copyright 2013: Rajesh D. Mudholkar, Author, The Timeless Essence of Financial Science, http://valueerodingfallacies.blogspot.in

    Financial Planning Standards Board Ltd

    Highest Global Standard

    Certified Financial Planner Board of Standards

    Financial planning professionals help investors make rational investment decisions, promote long term investment planning aligned with defined goals.

    Copyright 2013: Rajesh D. Mudholkar, Author, The Timeless Essence of Financial Science, http://valueerodingfallacies.blogspot.in

    Rational investors follow & expect long term equity returns linked to business performance, not speculative short term price
    Copyright 2013: Rajesh D. Mudholkar, Author, The Timeless Essence of Financial Science, http://valueerodingfallacies.blogspot.in

    Long term planning makes short term volatility irrelevant


    The riskiness of an investment is not measured by beta but rather by the reasoned probability of that investment causing its owner a loss of purchasing power over his contemplated holding period.
    Warren E. Buffett, Chairman, in a letter to Shareholders of Berkshire Hathaway, February 25, 2012
    Copyright 2013: Rajesh D. Mudholkar, Author, The Timeless Essence of Financial Science, http://valueerodingfallacies.blogspot.in

    Jan,1990 to Feb,2014 Berkshire Hathaway

    The Result

    Dow Jones Index

    Copyright 2013: Rajesh D. Mudholkar, Author, The Timeless Essence of Financial Science, http://valueerodingfallacies.blogspot.in

    What Corporate Finance Prescribes


    the opportunity cost of capital depends on the projects beta. ...Siemens, a German industrial giant, uses 16 different discount rates, depending on the riskiness of each line of its business.
    Fundamentals of Corporate Finance, 3rd edition, ISBN 0-07553109-7, Richard A. Brealey, Stewart C. Myers, Alan J. Marcus, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, pages 421-423.
    Copyright 2013: Rajesh D. Mudholkar, Author, The Timeless Essence of Financial Science, http://valueerodingfallacies.blogspot.in

    Feb,2004 to Feb,2014

    The Result

    Siemens
    Copyright 2013: Rajesh D. Mudholkar, Author, The Timeless Essence of Financial Science, http://valueerodingfallacies.blogspot.in

    Both, the short-term and beta are irrelevant for opportunity cost of equity
    Copyright 2013: Rajesh D. Mudholkar, Author, The Timeless Essence of Financial Science, http://valueerodingfallacies.blogspot.in

    Corporate financial practice conflicts with rational investor expectations, breeds Financial Crisis such as 2008
    Copyright 2013: Rajesh D. Mudholkar, Author, The Timeless Essence of Financial Science, http://valueerodingfallacies.blogspot.in

    ....we do not yet have complete and generally accepted explanations for how financial markets function......Mispricing of assets may contribute to financial crises
    - 2013 Nobel Economic Sciences Prize Committee
    Copyright 2013: Rajesh D. Mudholkar, Author, The Timeless Essence of Financial Science, http://valueerodingfallacies.blogspot.in

    Raises questions, Financial Economics never asked

    Answers those, Financial Economics never could

    To prevent FINANCIAL CRISIS, and transform Financial Management from a Cultivated Art into a truly Objective Science
    Copyright 2013: Rajesh D. Mudholkar, Author, The Timeless Essence of Financial Science, http://valueerodingfallacies.blogspot.in

    http://valueerodingfallacies.blogspot.in

    Copyright 2013: Rajesh D. Mudholkar, Author, The Timeless Essence of Financial Science, http://valueerodingfallacies.blogspot.in

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