DSIJ Mindshare

When there is a monopoly or a duopoly in a sector or industry, you can be sure there are plenty of barriers to the entry of other players in the sector or the industry. Such companies make supernormal profits as they can dictate the price at which their products or services are available to the customers and, therefore, their shares command premium pricing on the stock markets.

The term ‘economies of scale’ is synonymous for efficiency in production of goods and services. It simply means that as the business grows bigger and bigger, the cost of production per unit declines progressively.

It is claimed that the price of a stock on the stock market is the function of demand for that stock and the available supply at a given point of time, apart from the fundamental factors that come into play in the pricing of the stock.

You must have often heard or read about the ‘power of compounding’ and if you are not conversant with matters of finance, you may not know what it actually means. Actually, it is quite simple: It just means that you get paid interest on the principal amount as well as on the accrued interest at regular intervals. The exponential effect of this power of compounding is astounding.

If you are planning to quit your job and thinking of becoming an entrepreneur having a start-up of your own, you need to take some steps to secure yourself financially before you venture into business.