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The active management always attempts to select attractive areas of investment. They decide the ripe time to join and enter markets, sectors, and places of leverage in the market. Their point is to make profits, and always aspire to do more than they could be doing.
Passive management of investments does not make an attempt to differentiate between unattractive and attractive securities, or keep tabs on the markets. They invest in wide sectors that are called indexes. The aim is also to make profits (Bernstein 2001). But due to the nature of the market they accept average returns. They actually diversify their investments. Active management of shares is quite appealing on paper. But it is substantially costly and surrounded by decreasing returns when compared to passive investment.
Given the unpredictability of markets and economies, it is better to diversify the risks rather than put one’s investment in one company or market. Some people can make accurate predictions on investment returns, but this may not always be the case. If the predictions are right, the returns are also abundant. In case of a misjudgment, the losses incurred could be quite severe.
The future security prices are equally unpredictable. As a result, it is difficult to predict their future. On the basis of this, a passive investor who spreads the risk is better taken care of. If one can predict rightly, then the returns are always good.
The risks and returns are basically correlated. This is the major positive side of active investing. The high potential returns are always risky to venture in. A risk in investment is the potential to lose on the investment. Passive investment spreads the risks by diversifying the investment areas, hence a reduced risk overly.
Active management is by a great deal more expensive than passive one. Active investors must incur costs in order to match the
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Leadership is a complex phenomenon that has been and is being studied and debated by scholars for many decades now. Leaders have been identified in the past that have contributed immensely to the society, country and organizations that are now considered as the role models for future generations to come, and this process still continues.
There are very many theories on the evolution of society and the causes and effects of change in social status. However the current financial crisis that the nation is facing can be contributed to many factors that go far beyond simplistic Marxian theories of social class.
However, the truth of the matter is that even though the products that they might be representing and/or selling are inherently different, the methods by which they engage the consumer with and the means by which the actual communication takes place is far more similar than different.
Entrepreneurs in different sectors of the economy are seen to make use of their innovative ideas to make strategic business decisions. Warren Buffet is one such person who has been selected for this essay. He is claimed to be one of the most successful entrepreneur in the financial sector and the suggestions provided by this person is adopted and accepted by most of the people operating in the business world.
duction The investment decision of an investor can be improved and optimized by implementing the four filters invention of W. E. Buffett and C. T. Munger. It is an investment formula which is often underestimated by the academic and business communities. But another school of thought suggests that Four Filters is an intellectual tool in the field of behavioral finance.
The investments of Warren Buffett are being handled by his company Berkshire Hathaway as a holding company. The investments of Warren Buffett at some point of time included investments in companies like Coca-Cola, American Express, and Gillette. Buffett had the clairvoyance not to invest in the stocks of dot.com companies, which was proved a successful strategy, as there was a crash of the values of shares of these companies subsequently.
The Idea is that in case of liquidation (closure of the company) Investor of the company would at least get back money to the extent of NWC. Thus buffet would be interested in those companies whose Market value is less than its NWC by certain margin percentage (the prevailing
According to the study, Warren understands the needs of the employees and is usually on the forefront in ensuring that the needs of the employees are met. The democratic nature of the leadership of Warren has enabled the employees to be willing to do their best in order to ensure that the organization is successful.
To follow the vision, the CEO plays the most important role in guiding the pathway and leading from front (Ghosh, 2012).
To talk more about CEO succession, the legendary founder of Berkshire Hathaway, Warren Buffet
4 Pages(1000 words)Essay
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