Posts Tagged ‘IP’

07.19
15

Risk Associated With Equity Investments

by como ·

We are often told that equity investments are subject to risk. What is this risk? It means earning less than what you expected from a given investment or losing part of what you invested. When it comes to investments we only talk about returns. We say: the higher the risk the higher the return. How easy it would be then to assess a mutual fund if they published, along with their returns performance, the risks involved in earning such returns. For example, a fund gave 25% return by risking losing your capital to the extent of 5% , and another gave 50% return by taking the risk of losing 100% of your capital. In the absence of risk figures, you would rate the fund that gave 60% return as better than the one that gave the 25% return. However, within the risk parameter, you would prefer a fund that risks 5% of your capital to one that risks 100% of it.

Investors solicit advice in brevity: tell us what to buy or sell, they say. But we cannot make a significant amount of money if we avoid taking risks. Risk is also an opportunity, but it should be a calculated risk you take. If the fear of losing makes you leave the money idle or put in low-return instruments, then inflation will devalue it. Hence, investment is must, and the risks associated with it must to be understood.

In an ideal scenario, the investor should need to take only risks relating to the economy and company performance and our markets are close to achieving this goal.

There are several parameters that evaluate the risk factor. Statistical and analytical tools can be used, but they are not affordable for the small investor nor would he always have the time or knowledge to use them. This article lists the parameters that go into risk calculation. Risk can be minimized if we can identify it.

Risk is related to time. The first question to ask when making an investment is: When do I need the money? In general, you can take more risk if your investment horizon is distant. This is because you have more time to recoup your potential losses along the way. Major factors that determine risk are stated below.

Macro factors that add to risk are the economic performance of the country. The GDP growth of 8% + in the last few years has fuelled the stock market rally. Interest rate movements, each time the Reserve Bank changes the benchmark rates of interest, has a positive or negative impact on the market. The dominance of FIIs in India has also led to a sensitivity of the market to interest rate cuts, announced by FED in the US. International developments, such as energy prices, WTO, insurgence and wars between countries also impact risk, since such issues affect share prices. Regulatory changes such as Truck overloading norms, Intellectual Property Rights, and VAT also add to risk directly if the company is part of such and industry, and indirectly, if such changes impact all industries in general. The feel-good factor is also necessary to keep the market sentiment buoyant; if everyone feels that the economy is doomed then there is little one can do to improve market sentiment.

Industry-level risks include: the state of a specific industry, whether it is in growth, maturity or decline phase. Industries such as IP telephones and cell phones are in the growth phase whereas certain type of asbestos sheets manufacturing, which is a health hazard, is not. Industry cycles are also important: for example, in the monsoons, there is less demand for cement compared to the rest of the year. Structural changes and paradigm shifts in an industry should be observed, such as peoples current preference for motorcycles compared to scooters, or landline phones versus mobile phones or electronic encyclopedias versus printed books.

Company-level performance risk includes: company value sets and governance norms, whether it has a dominant position in the industry or is an also-ran; financial parameters, such as earning per share (EPS), whether it has short-term or long-term approach to growth. Its quality of management and corporate governance are important. Infosys carries one of the lowest risk parameters as far as corporate governance goes since it is one of the best managed companies in its field. If the company is listed as a Z group share or in Trade-for-Trade settlement, then it is a clear indication that either the company is not fulfilling the listing requirements or there is unusual activity in the market in relation to the share, and the stock exchange has put it under special surveillance.

Regulatory risks associated with markets are also important. If the quality of regulation is poor then the response to scams is also not adequate. While scams and market manipulation will continue to happen as long as there is human greed, how regulators and the entire legal system respond to them is important. Timely prevention, early detection, speedy and severe punishments act will deter potential manipulators. Regular reviews and correction of outdated laws ensure compliance from citizens.

Systemic risk relating to stock markets, such as that to do with the technology, needs to be understood. Today, the markets are heavily dependent on complex systems that run through public and private networks; inability to square off an open position during the closure of the market is a major risk. Please read the Risk Disclosure Document that is available with brokers to understand such risks.

Successful investing would require you to study prospects and project earnings, P/Es and market prices versus todays levels, risk /return benchmarks are necessary to review when either is achieved. Avoid greed for more profits or fear of incurring losses. Be rational rather than emotional. Sleep over a decision, if necessary. Haste can make waste.

In summary let us remember-no risk no return. No pain No gain. Take small steps. Ask for advise. Read books. Use Internet. But dont give up on investing because a film tells you so or your cousins neighbours uncles co-brothers friend in Jumri Tallaiya said he lost his shirt in the markets! Own your decisions and learn from your mistakes. They are the best teachers!

04.3
14

Congestion Management

by como ·

QoS involves many components and features, but the component that is most typically associated with the term QoS is congestion management. Congestion management is the key component for QoS on Catalyst switches. routing and switching The congestion management component of QoS itself is made up of many different features in Cisco IOS and CatOS. All Catalyst switches that support QoS features support congestion management or congestion avoidance. The next section looks at these features in detail, but the purpose of this section in general. As the name implies, congestion management enables you to manage the congestion that is experienced by packets at a given point in the network. Congestion management involves three main steps: 1?Queues are created at the interface where congestion is expected. Depending on the specific feature or mechanism being used to provide QoS ccie workbooks and the platform on which the QoS is being configured, there could be only two queues or there could be several hundred (although there is currently no practical application for this many queues on any Catalyst platform). 2 Packets (this could also be frames, but for the sake of simplicity, the word packets is used) are then assigned to these queues, based on classification characteristics such as DiffServ codepoint (DSCP) value. The classification CCIE of packets by characteristics is typically user-defined, and packets are placed into queues by these predetermined characteristics. Some examples of packet characteristics that are typically used in classification are the values in the packet for IP precedence, DSCP, and Layer 2 class of service . It is also common to use extended access lists to match packets based on more complex criteria, such as port numbers.

QoS involves many components and features, but the component that is most typically associated with the term QoS is congestion management. Congestion management is the key component for QoS on Catalyst switches. routing and switching The congestion management component of QoS itself is made up of many different features in Cisco IOS and CatOS. All Catalyst switches that support QoS features support congestion management or congestion avoidance. The next section looks at these features in detail, but the purpose of this section in general. As the name implies, congestion management enables you to manage the congestion that is experienced by packets at a given point in the network. Congestion management involves three main steps: 1?Queues are created at the interface where congestion is expected. Depending on the specific feature or mechanism being used to provide QoS ccie workbooks and the platform on which the QoS is being configured, there could be only two queues or there could be several hundred (although there is currently no practical application for this many queues on any Catalyst platform). 2 Packets (this could also be frames, but for the sake of simplicity, the word packets is used) are then assigned to these queues, based on classification characteristics such as DiffServ codepoint (DSCP) value. The classification CCIE of packets by characteristics is typically user-defined, and packets are placed into queues by these predetermined characteristics. Some examples of packet characteristics that are typically used in classification are the values in the packet for IP precedence, DSCP, and Layer 2 class of service . It is also common to use extended access lists to match packets based on more complex criteria, such as port numbers.