Readings: Gold & silver highs, Irrational investors, WisdomTree India Earnings Fund (EPI)
- Hindu Business Line: Gold zooms; silver at 27-year high
In the London spot market gold hit an all time high of $949.60 an ounce tracking . . . in the local market, standard gold was Rs 12,200 per 10 gm, while pure gold was Rs 12,255/10 gm.
Silver prices also reached their 27-year high of $18/oz in the international market. In the Indian market silver was quoted at Rs 22,555 per kg.
- Economist: Beyond Reason
The underperformance of growth stocks is linked to an overenthusiasm for extrapolation. A company increases its profits at 20% a year for five years and investors are tempted to believe it can do so for 15; historically, however, such paragons are about as rare as vegetarian cats.
Academics have just about abandoned the idea that all investors are rational; there are too many examples of psychological quirks (such as an aversion to recognising losses) for that to be the case. Nor can a bunch of “super-smart” investors necessarily keep prices in line; they may face constraints on their ability to trade or simply run out of money before the anomalies can be corrected.
The WisdomTree Trust will launch the WisdomTree India Earnings Fund on the NYSE Arca under ticker symbol EPI on Friday, February 22nd. EPI will be the industry’s first India ETF with direct investment into local Indian securities and will select from a broad universe of approximately 150 profitable companies included in the WisdomTree India Earnings Index on the annual index screening date.
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