Investment Traps
43 articles
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High Returns Don’t Always Require High-Risk Stocks
To earn high returns you need to take high risk! – at least that’s what everyone in the investment world thinks. But what we forget is that, higher the risk, higher is…
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Can You Invest on Your Own? Why Self-Investing May Be the Key to Better Long-Term Returns
Most people are afraid of the stock markets, the common perception being that it’s a gambling den! As a result, we end up handing our hard earned money to the so called…
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How do companies use Mergers and Acquisitions to manipulate financial statements?
Tata Steel acquires 100% stake in Corus Group; Vodafone purchases 67% stake owned by Hutchinson-Essar; Indian major Ranbaxy acquired by Japanese pharmaceutical company Daiichi Sankyo – these were headlines that were splashed…
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Cash Flow Statement is the least manipulated Financial Statement. Or is it?
“The cash flow statement is one of the least manipulated financial statements”. The other two financial statements viz. the Profit & Loss and Balance Sheet, are often subjected to many manipulations. However,…
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How Companies Manipulate Liabilities in Financial Statements
As investors, we often pay more attention to the sales, net profit numbers on the profit and loss statement, while neglecting the balance sheet. After all balance sheet numbers are not as…
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Balance Sheet Manipulation: How Companies Overvalue Receivables and Inventory
The balance sheet, also known as the statement of financial condition, offers a snapshot of the company’s health. It tells us how much a company owns (Assets), and how much it owes…
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Depreciation Manipulation in Accounting: How Companies Inflate Profits
Depreciation manipulation in accounting is one of the most overlooked ways companies can artificially improve reported profits.
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Expense Manipulation in Financial Statements: Common Techniques Companies Use
Every now and then when the profits of a company suffer, we hear management talk about the various “cost-cutting measures” that it is implementing. Infact during a downturn, when customer orders are…
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Revenue Manipulation in Financial Statements: How Companies Inflate Sales and How Investors Can Spot Red Flags
2010 was a year of scams for India – the CWG scam, 2 G scam, Adarsh scam. While government officials and departments are infamous for corruption and scams worth millions, history has…
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Stock investing, with all its risks, is only for the young? Is it?
Investing in the stock markets is risky. And conventional wisdom says that the elderly among us should take as little risk as possible, keep their hard earned money safe and handy, etc.…
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Are Low-priced stocks a better bet than High-priced stocks?
We are constantly on the lookout for various strategies to profit from the stock market. Out of the numerous “lucrative strategies”, one that is frequently practiced is that of investing in stocks…
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Are ‘Good Companies’ always Good Investments?
Investors have a tendency to label some companies as ‘Good Companies’. This is usually based on the perception that its products are good and liked by everyone or it has reputed management.…
