"India has the second largest number of listed companies in the world. There are lots of small companies that probably should not have been listed, that are listed. That gives an opportunity for people to find things when others aren't looking there."
SimoleonSense.com interviews Chetan Parikh
http://www.simoleonsense.com/wp-content/uploads/2009/11/miguel-barbosa-of-simoleonsense-interviews-prominent-indian-value-investor-chetan-parikh.pdf
I particularly like Chetan Parikhs comment on investor bias
" 1) self-serving bias (i.e. an overly positive view of their own abilities and an overly over-optimistic view of the future) 2) self-deception and denial for they seem to have indulged in collective wishful thinking 3) bias from consistency tendency (they must have looked for evidence that confirmed their optimistic beliefs and kept on being consistent to their original ideas even when problems surfaced) leading to 4) status quo bias or the do-nothing syndrome 5) impatience in valuing the present more highly than the future again caused by incentives that made them so myopic 6) bias from envy from managers who were making large returns with apparently no extra risk which led to 7) distortion by contrast comparison because the steady escalation of commitments must have seemed incrementally small
caused by 8) anchoring to what seemed like small relative numbers 9) social proof which
led to imitating the behavior of their peers 10) bias from over-influence by authority in
that the CEOs of the banks that have suffered the most seem to have been run by people
who did not have a ‘trading’ or ‘market’ background and they were swayed by the
‘experts’ they were overseeing which led them to 11) sensemaking in that they were too
quick to draw conclusions and may have become 12) reason-respecting in that they
complied with requests from their subordinates merely because they had been given some
reason leading to 13) a do-something syndrome all caused by 14) mental confusion from
stress. "
Listing of small companies in Indian stock market gives an opportunity to long term investors to do investment in few most undervalued companies. Warren Buffett will like these companies for sure
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