Monthly Archives: December 2023

Speculations

Dear Patrons,

Let me explain Speculations with an exercise. What are the different possibilities of this image?

Before going further, Guess! What would it be?

… A Balloon?

… A new experimental type of kite?

… A ‘designer’ frying-pan?

… A plain button with a loose thread?

Our mind is speculative.

We can only see the visible part. We do not know what else is. There is so much overlap between speculation and hypothesis of the same thing.

In the world of speculations, it is always fun and thrill because they are open to people who do not have special knowledge. A balloon can be treated as frying pan or a kite or a button. The one who uses speculations for his benefit can put any random logic to stand correct to their arguments.

However, a hypothesis is much more serious. It is only accepted with right set of question answered. A hypothesis, provides a frame through which we can look at a part of the world. Hypothesis add richness and interest to thinking and to conversation.

Coming to the point of Investments, speculations have become major source of information. Such information spread fast and gets accepted easily because of speculations add thrill and excitement to the piece of information. Asset classes where fundamental hypothesis is required, has to be kept away from speculations. In equity investing, it is very easy to engage someone with convenient speculations but at the same time talking about hypothesis with the same person is very boring task.

At Shalibhadra, we believe speculations/guess/ gossip will not help to create wealth. For this, instead of focussing on distractions, correct approach is investors’ focus, discipline and right attitude.

Nishit Siddharth Shah