One common mistake even a lot of experienced analysts make is comparing stocks to flows. Recently, for example, Apple’s trillion dollar valuation was compared to countries’ GDP. A few years back, an article compared the quantum of bad loans in Indian banks to the country’s GDP. Following an IPL auction a few years back, a…
A Balance Sheet View of Life
The basic idea of this post is that interpersonal relationships (not necessarily romantic) need to be treated as balance sheets and not as P&L statements, i.e. one should always judge based on the overall all-time aggregate rather than the last incremental change in situation. Just to give you a quick overview of accounting, the annual…