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TO RUPESH, RKK, DIPAKGOD
Thanks for the contribution. Pls go on adding your experiences and thoughts.
Thanks
Hansal
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Hello Chandabull !
Welcome back,we have missed you here on MMB.Trust everything is well with you.Pls keep posting as before.
Regards-Deepak...
Hello,friends! Hope you are doing well in this market. !!!!!!---------------chandabull...
very good, hassal. excellent job
three cheers...
YES SOME TIMES LOW PE means that stock is not in much demand...
I want to invite the forum to discuss, some good stocks always under low PE. is it due to less demand, (volumes) or any other reason????
for example GE Shipping...
rk2009
thank`s friend
rupesh...
Rupesh
great contribution!!!...
IN MY VIEW FOR PE,
low PEs are alwayes considered in crashed like sitituations just as 2008 when every one was looking for stocks as per book valus and LOW PE low PE also means the stock is in less demand and higher one shows higher stock demand but it can differ sector wise like infra and construction always trades on high PE rathar than pharma.AND ON THE OTHER HAND IN RISING MKT MOST OF STOCKS TRADES ON HIGHER PES DUE TO HIGH IN DEMAND BCOZ OF RISING MKT AS MKT DISCOUNTS ALWAYS ONE/TWO YEARS AHEAD OF ITS EARNINGS FOR BOTH SIDES NEGETIVE AND POSITIVE AS THE MKT WAS CRASHED JUST IN FEAR OF RECESSION IN INDIA TOO, ESTIMATING GDP TO FALL 4% SO THE MKT DISCOUNTED SHARPLY THE EARNINGS ON NEGEATIVE SIDE.AND RIGHT NOW WHEN GDP IS STABLISED AT 6%+ MKT IS DISCOUNTING 2 YEARS FORWARD GDP/EARNINGS SO THAT WILL ALSO APLIED ON PE RATIO OF MKT AND STOCKS TOO.
and we should not ignore EPS too HIGHER EPS CAN SUSTAIN HIGHER PE. AND ALL IN ALL DEBT EQUITY RATIO MUST BE LOWER SIDE...
to day use this manthra!!!
If you enter a scrip after 40% growth remember the party is already over. either you get a small piece or loose ........
i congratulate your effort, to help new investors from pit falls.hope thiis will go for ever!!!...
a good advice .....
sir,
I want to add these few on fundamnetals.
the Price /earnings ratio, is the ratio of shreprice to last years earings per share.it indicates the number of years it takes to get back your investment.on the scrip Good comapnies can be bought at high P/e If PE is too high there is no baragain in it Keep away from it Investor sholud look for estimation of future earnings of the comapany, ie next financial year.i observe these days people run after companies with zero eps, with expectation The price fixation in IPOs is a big trap fro new investor...
DONT FOLLOW P/E BLINDLY.
Although P/E is a good indicator of Price vs Earnings and whether the price is justified, one should not follow it blindly.
Example - Is a stock having P/E of 3 better than one having P/E of 12 or that of 20. The answer is not that simple.
Let me give you a more relevant example - Suppose you want to buy a Sofa-cum-bed and have a budget of 20-30K. After visiting quite some shops, you narrow onto 2 items, one costing 23K and another costing 28K. What are the other things that you might look at.
1. Brand name. Is it popular. Does anyone in your family or friends have it. What has been their experience.
2. Quality of wood used, quality of cover used.
and so on.
HENCE apart from Price, you look at external and internal factors.
SAME WITH P/E. IT CANNOT BE LOOKED AT ISOLATION. Look at:-
1. Company`s track record
2. Company`s business. Its prospects in the next 5-10 years
3. Is the high/ low P/E and aberration.
4. Has the company managed to grow. What are its reserves and how health is the cashflow.
Cheers
Hansal
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A FOOD for THOUGHT for Equity Investments:Nothing is screamingly cheap.The easy money has been made in both equities!!From the low point in March, it seems you can`t pick an asset class that hasn`t gained something in the area of 60%.
During this universal recovery, as in most post-recessionary periods, lower-quality stocks have outperformed,and lots of smart guys who had the guts and money to buy them at the depths are cashing out--convinced that risks of continued exposure outweigh possible rewards of staying long.
It`s past the time to lighten up,and say no and chase away risk assets as they are currently having lofty valuations!!So the time has come to begin paring exposure to risky assets, and if their prices continue to rise,then one should be paring at an accelerated pace.
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