निवेश-शास्त्रम्

Based on “Essentials of Investments” by Bodie, Kane, and Marcus

आचार्य-बोधि-मार्कण्डैः – By the teachers Bodie and Marcus. (Bodhi = Bodie; Mārkaṇḍa = Marcus).
कण-नाम-महर्षिणा – And by the great sage named Kane. (Kaṇa = Kane).
सम्पत्तिर्वास्तविक्यस्ति – Wealth (assets) is truly real (Real Assets).
वित्तीयं – Financial (assets).
तस्य सूचकम् – Is the indicator/claim of that.

दक्षापण-मते – In the theory of the Efficient Market (EMH).
मूल्ये सर्वं ज्ञानं विलीयते – In the price, all information is dissolved/incorporated.
सञ्चयस्य विभागो हि – The allocation of the portfolio indeed.
सर्व-निर्णय-नायकः – Is the leader/primary of all decisions (Asset Allocation).

तीक्ष्णाङ्को – The Sharpe Ratio. (Tīkṣṇa = sharp + aṅka = ratio).
लाभ-सूचको – Is the indicator of reward.
वैविध्यं हरते दोषम् – Diversification removes the flaw (idiosyncratic risk).
मार्गाङ्को – Beta. (Mārga-aṅka = market trajectory coefficient).
विश्व-कम्पकृत् – Which causes systemic vibration (Systematic Risk).
सञ्चये ज्ञातुमर्हति – One ought to know in the portfolio.

बन्धपत्रे – In a bond contract.
स्थिरायतिः – Fixed income.
कालमानं च वक्रता – Duration and convexity.
लाभांश-मान-तन्त्रेण – By the Dividend Discount Model (Lābhāṃśa = dividend + māna-tantra = measuring model).
मूल्याङ्कनं प्रजायते – Valuation is produced.

क्रयाधिकार-रूपेण – In the form of Call Options.
व्युत्पन्नं रक्षणाय च – Derivative, and for hedging/protection.
मानवानां विकल्पेन – By the bias/irrationality of humans.
बाध्यते तार्किकं मनः – The rational mind is hindered.

आद्यापणे – In the primary market.
नवांशस्य प्रकाशनं विधीयते – The issuance (IPO) of the new share is performed.
द्वितीयापण-रङ्गे तु – But in the arena of the secondary market.
क्रय-विक्रय-क्रीडनम् – The play of buying and selling (Trading).

मध्यस्थाद् ऋणमादाय – Having taken debt/margin from the broker.
क्रीणन्ति यत्र मानवाः – Where investors buy.
लाभो हानिस्तथा तेषां – Their profit as well as loss.
तीव्र-रूपेण वर्धते – Amplifies in a severe/rapid form.

अंशम् आदाय चान्यस्मात् – Having borrowed a share from another.
रिक्त-विक्रयणं तथा – Thus doing empty-selling (Short Selling).
मूल्य-पाते भवेल्-लाभो – In the fall of price, profit occurs.
वृद्धौ चानन्त-नष्टता – And in growth, infinite loss.

सङ्घीकृत्य धनं सर्वैः – Having pooled capital by all.
सञ्चयो यत्र गच्छति – Where the fund is directed (Mutual Fund).
शुद्ध-सम्पत्ति-मूल्यं तत् – That is the Net Asset Value (NAV).
ऋण-हीनं विभज्यते – Bereft of debt (liabilities), it is divided.

निर्भयं वित्तमादाय – Having taken the risk-free asset.
सापाय-सञ्चयेन च – And with the risky portfolio.
रेखा वितन्यते काचित् – A certain line is stretched (CAL).
तीक्ष्णाङ्केन प्रवर्धिता – Grown/sloped by the Sharpe Ratio.

सह-भिन्नत्व-मानेन – By the measure of covariance.
सञ्चयस्य भयं पतेत् – The risk of the portfolio drops.
सीमान्तं प्रथितं श्रेष्ठं – The celebrated Efficient Frontier.
मार्कोविट्-मुनि-दर्शितम् – Shown by the sage Markowitz.

इष्ट-सञ्चय-सन्धानं – The finding of the optimal portfolio.
केवलं गणितं स्मृतम् – Is declared purely mathematics (Objective).
स्व-भीति-मान-भेदेन – By the difference in one’s own risk aversion.
धन-योगो विभिद्यते – The wealth allocation is separated (Subjective).

नैक-मार्गाङ्क-तन्त्रेण – By the multi-Beta model (Multifactor).
मूल्यं सम्यग् विधीयते – The price is properly established.
अन्तर-प्रापणं वार्यम् – Arbitrage is to be eliminated.
एक-मूल्य-प्रमाणतः – By the authority of the Law of One Price.

भविष्य-प्राप्ति-मूल्यं यद् – The present value of future cash flows.
बन्ध-पत्रस्य मूल्यकम् – Is the valuation of the bond.
आदाये वर्धमाने तु – When the yield increases.
मूल्य-पातो विनिश्चितः – The fall of the price is certain.

कालमानं तु रेखीयं – Duration is indeed linear.
मूल्य-कम्पस्य सूचकम् – The indicator of price sensitivity.
वक्रता रक्षते हानिं – Convexity protects from loss.
लाभाधिक्यं ददाति च – And gives excess profit.

पञ्च-मानैर्विधीयेत – Is determined by five parameters.
विकल्प-मूल्य-निर्णयः – The decision of the option’s price.
कृष्ण-शोल्-मुनि-सूत्रेण – By the Black-Scholes formula.
कम्पनं तत्र गूढकम् – Volatility is implied/hidden there.

क्रय-विक्रय-रूपौ द्वौ विकल्पौ – The two options in form of Call and Put.
समतां गतौ – Have reached parity.
अन्तर-प्रापणं नास्ति – Arbitrage does not exist.
साम्य-सूत्रे व्यवस्थिते – When the equilibrium formula is established.

तत्काल-मूल्यमादाय – Having taken the spot price.
निर्भयायति-वर्धितम् – Compounded by the risk-free rate.
लाभांश-हीनं यन्मूल्यं – Minus the dividend, whatever price that is.
भविष्यत्-पत्र-मूल्यकम् – Is the price of the futures contract.

तीक्ष्णाङ्कः सर्व-भीत्यर्थे – Sharpe Ratio for total risk.
ट्रेनोर्-मानं तु भागिके – Treynor Measure for a sub-portfolio.
जेन्सन्-आधिक्य-मानेन – By the measure of Jensen’s Alpha.
कौशलं ज्ञायते स्फुटम् – Skill is clearly revealed.

अंश-चयन-नैपुण्यं – Expertise in security selection.
सञ्चयस्य फल-प्रदम् – Yields excess return for the portfolio.
काल-ज्ञानं महा-कष्टं – Market timing is greatly difficult.
विकल्पाभं च तद्-भवेत् – And it functions like a (synthetic) option.

न मानवाः सदा युक्ताः – Humans are not always rational.
चित्त-दोषेण वञ्चिताः – Deceived by cognitive bias.
अन्तर-प्रापणं तस्माद् बाध्यते – Therefore arbitrage is limited.
मूल्य-सङ्कटे – In pricing distress (fundamental risk).

नष्टमंशं न मुञ्चन्ति – They do not sell the losing share (Disposition Effect).
लाभं त्यजन्ति सत्वरम् – They abandon the profit quickly.
इति वृत्तिं समाश्रित्य – Relying upon this momentum.
रेखा-तन्त्रं प्रयुज्यते – Technical Analysis is applied.