Also add the interest for the amount to be refunded till the time a customer comes back to claim his refund.
Will not work. Randomly some fund will outperform and then fees will increase and more often than not it will start under performing. Most people will invest once a fund is outperforming but generally that wont hold in future due to mean reversion. Even Naren and Prashant jain had long periods of under performance ( payed off later for Prashant Jain funds that i held). Mirae funds used to do well, but were not doing so well when i sold.
If i could chose 5 ‘best funds’ and knew that they will outperform, only then this would work. But we cannot do that – not anymore. And there is no penalty for under performance which is what we will need to balance out costs if we assume that overall the 5 funds will cancel out out performance of 1/2 funds.
Ok, so x% * profit – (100-x)% * 0 = profit only. If you are really want to prove this, give back double the money when your ‘prediction’ does not work.
A heard a rationalist from Maharashtra had offered to give decent money to someone who could prove such kind of magical things. No one took the money. He was murdered about 10 years ago …
I suspect @Madhav11 has already made a stunning prediction that your proposal will lose him lot of money. Dont forget you are dealing with a man who can see the future
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For binary outcomes its always possible to make money even if you refund full amount when you are wrong
1000 people come to you. To 500 people you say modi will win, to the other 500 you say modi will lose
even if you refund the full amount to the wrong 500, you are still a winner.
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There are 1000 losers and only one winner in this game
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Which ayanamsa do you use and why ?
I am now starting to think in advanced terms.
He must create a separate fund for this. 50 percent of the fees should be transferred to this funds and this should be invested in FDs. Every time somebody claims for refund, this could be used.
What do we call this fund. “Unsatisfied clients refund fund” ?
It can be treated as Advertising cost. These kind of refunds will help in Promotion and bring hundreds of new clients
In Naseeruddin Shah’s voice: Maine Future Dekh Liya hai.
No. We can’t even recognise it as revenue when he first charges this.
As per standard on revenue recognition, revenue is recognised only after it’s certain to accrue. Here in the given case, he is taking an advance from client and if client doesn’t come back for let’s say 3 months, he can assume that his prediction is right. And that’s when revenue should be recognised.
What if I tell BJP supporters Modi will not win and congress supporters Modi will win?
If Modi wins, BJP supporters won’t ask for refund out of joy.
And if Modi loses, congress supporters won’t ask for refund.
Risky proposal. But thinking of different ways to make money. I hope I don’t lose my head here.
yeah people who have made real money out there are a bit crazy – you got company !
Boss please tell me somethings about my future. Anything i try i fail. Why boss? Will i ever succeed in anything
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If you do this, your head will be chopped right on the spot and your premises will be vandalised.
This is not risk but suicide.