Finance and Investing

List of Investment Mantras
"Let's collect a list of investment mantras here!
If possible, let's also add the circumstances / market conditions that make them valid (or not).
1. "When confident, concentrate; when doubtful diversify". When is this considered a sensible advice?
2. "Don't put all your eggs in one basket". In what kind of circumstances is this a smart strategy?
3. "Buy at bottom + 1 and sell at top -1". Is this a good strategy? If not why? If yes when?"

Taming Inflation in India
"What do you think about RBI's money tightening policy?
Who can suggest other measures to tame inflation in India?"

Minority Shares Buyback
"Hi, I'd like to ask about accounting for shares buyback for the following case:
10% of the shares of company A are owned by an investor. Company B buys those 10% shares from the third party investor. Company A and B are subsidiaries and their parent is a holding company (consolidation) the both financials are represented there.
Par value of the shares was 100 and the purchase price is 140. On company B investment with recorded with cost (140), on the consolidated financial, shall we record only the excess of par value (40) as goodwill or we should re-valuate the shares' fair value (assume at the moment of acquiring the 10%, the share fair value was 80) and the difference (140 - 80 = 60) should be recorded as goodwill?
Thanks for advising,."

Consequences of Stock Price Decrease
"Hi, I would like to know if a company stock price decreases, why is this an issue and what are the consequences?"

Interest Rate Rise vs Economic Recovery
"The Reserve Bank of Australia raised the cash rate by 25 bases point to 3.25%. Reason: the global economy is resuming growth. How far can a rise in interest rate contribute to the envisaged world economic growth?"

Is the End of the Recession Near?
"Are we seeing the end of the recession or is the worst yet to be seen? What about credit card crisis?"

New Global Reserve Currency needed?
"Today's economic recession with all its social consequences was caused by financially irresponsible behavior of US regulators, banks, companies and consumers. Having said that, it is remarkable and unfair that the crisis is having a more severe impact upon the rest of the world than it has on the US itself.
The US are fixing their problems by increasing the federal deficit and paying for this by submitting new US government bonds and printing dollars. So basically by more of the same overspending.
It's time the greenback is replaced by a new global reserve currency owned by a more responsible and impartial institution."

WACC (Weighted Average Cost of Capital) Calculator
"WACC is a key concept in finance - it is the appropriate discount rate to use when valuing a firm's cash flows, or to evaluate a 'typical' investment project within a firm. However, calculating WACC is complicated, especially determining the cost of equity. I found a website, thatswacc.com, which finds a firm's Beta, computes the cost of equity and debt, and then calculates an estimate of the firm's WACC. I've found the site useful, and hope others do too."

Consequences of Subprime Crisis
"What will be the consequences of the recent Subprime Crisis for non-financial enterprises?"

How to restore Trust in Financial Markets?
"What approach or method should be used to restore the confidence in the financial markets and financial institutions? Why?"

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