Two Styles Of Stock Picking - Value & Growth Friends, World Over Equity Culture Is In Two Style - Value & Growth Lets Understand Them: We Rush To Pick Things On Sale Thinking That Its Real Worth Is More Than The Offer Price. This Is Value Investing, To Put Simplistically , Target Companies With Strong Fundamentals In Terms Of Earnings, Dividends, Cashflows Etc, Trading Below Their Actual Worth, In Stock Market Terms Its Called Intrinsic Value, Those Stocks Which Over React To Particular News Affecting The Industry Only In Short Term But Has Margin Of Safety, Which Is Nothing But Discount To The Intrinsic Value, From Current Price, Wider The Discount Best Will Be Margin Of Saftey. Here The Parameters Are Price To Earining Ratio, Price To Book Value, Price To Sales Ratio, Some Stocks Will Not Be Or No Longer Be Flavour Of Current Investors But Since They Have Strong Fundamentals Make A Strong Case That The Stock Will Bounce Back And Show Its True Colour, They Are Neither Sector Specific As An Attractive Bargain Can Almost Be Found Anywhere, But The Probability Fo Locating Them Today Is More In Energy,financial Service Or Healthcaresectors, Value Stock Available At Bargain Does Not Mean That Any Stock That Has Fallen Will Qualify As A Candidate In This Category. One Of The Value Stock Qualifying Must Criteria Is To Ensure That The Debt Of Co, Does Not Exceed Its Equity And It Has Shown A Healthy Earnings Growth Over The Past Few Years, To Be Continued........, From Sangeetha Jain, Chennai
Hello friends, I have been a dormant member.I came across this discussion.Its terrific!!!I am interested in learning abt mfs,stocks etc.This thread is just gr8
Hello shalini ! thank you very mush for raising this topic as it helps many a lot. iam a new member in IL and looking forward to such meaningful and helpful discussions.i want to start investing in stocks and MFs but totally illeterate in those fields. of course,we collegues at work place discuss it but very minimum as no one knows it properly. Those who know and are very much into these shares could not clear up my ignorance. anyway....the risk factor i understood. but what to do to avoid risk maximum possible...that is the million dollar question for me. As many said unless you take plunge you can not feel the depth...i think. i took my first plunge yesterday I bought some shares of 'powergrid' and 'RNRL'. please provide the possible help if you can and i too will post my experiences regarding this issue. thanks a lot. best wishes, sarvani what
Hi sarvani... Congrats on your first plunge. The market is right now too volatile. You have to look into lot of aspects. Whether you want to enter into stocks as investor or as a trader. I think the festival season....the market may touch 20k but again the drop is also anticipated..... I am into stocks not as a trader but as an investor. All informations/issues in this regards..we can discuss.... btw,welcome to il
hi all, Those who are into the market newly, please dont panic at this crash (IT IS an anticipated one as i had mentioned in the morning in the same post). just wait....dont take more exposure.....wait until for a little more stability......
Hi Ladies, My husband just forwarded me this article on investing..and I thought that Ilites will find it useful. My hubby is an investment guru and he mostly invests in indexes and ETF's. He does not like to invest in specific stocks much. He prefers to spread his risk by investing in an industry per se. Recently he started trading in options. However that is another story. I have been bugging him to write on this IL thread for some time in order to impart some of his knowledge.. maybe one of these days, I'll get lucky.... Anyways, here is the text of the article (which appeared on New York Times on October 14th, 2007):- October 14, 2007 EVERYBODY'S BUSINESS Sound Investing and Peaceful Sleep By BEN STEIN ABOUT a week ago, I was swimming in my pool when I had serious difficulty breathing. “Uh-oh,” I said to myself, “now I am about to die.” My wife was upstairs reading, way out of earshot and, anyway, if I were about to have a lethal heart attack, I wouldn’t be able to scream. It turned out to be a nasty but short-lived bronchitis, and as I was lying in bed recovering, I thought, “I will die someday, and before I do, I would like to share with you the best possible thoughts I can, in gratitude for the many insightful letters I have received over the years from my readers.” DON’T SMOKE It is a filthy, disgusting, life-shortening, cancer-causing habit. DON’T DRINK TO EXCESS It robs the mind of motivation, reason and health. Someday I will write about all of the bosses I’ve had who were heavy drinkers and whose lives were wrecked by it. GET A BIG DOG And have that dog sleep in your bed with you. Dogs know nothing of mortality, and they share that peace with you. INVEST FOR THE LONG HAUL If you are a smart long-term investor, do not pay any attention to short-term developments. They are often reported by people whose motivation may be to scare you (screaming about the subprime “crisis”) or to make you giddily greedy (screaming about that one certain stock you should buy to retire rich). Some articles may scare you into selling, or not buying, at the wrong time, because the worse things are, and the worse the mood of speculators, the better the time to buy. Or some may motivate you to buy in excess — sort of like drinking in excess — at exactly the wrong, “irrationally exuberant” time. The people who write some of these articles often know very little about markets, are way too young to have learned much, have no money to invest anyway or just like to act like big shots with your money. In the very long run, stock prices plus dividends (in the postwar period) have rewarded patient, long-term, careful accumulation of broad indexes, mutual funds, exchange-traded funds and variable annuities (with a careful eye on fees). They have not rewarded short-term trading. Such trading based on tips seen on television shows — even shows whose hosts are true comic geniuses with bald heads — or read in magazines can be potentially disastrous. The short term is no place for the ordinary investor to trade. AVOID INDIVIDUAL STOCKS The data on this is as clear as a bell, and has been compiled by high-end thinkers ranging from Nobel laureates to the best friend the ordinary investor has ever had, John C. Bogle of Vanguard. Basically, you and I cannot pick stocks, except for Berkshire Hathaway. I was recently on a panel with the stock guru Ray Lucia, who offered overwhelming data about how impossible it was to pick stocks, trade in and out of them and fare as well as the market. His data was terrifying. The people on Wall Street do many questionable things. They reward themselves extremely well. But they have, in the last couple of decades, made it possible for almost anyone to get good results in stocks: buying very broad-based mutual funds, index funds, exchange-traded funds and (with an eye on fees) variable annuities and holding them for a long time. The evidence that this form of investment does better over long periods than trying to pick stocks is simply staggering. Yes, maybe some gurus at a hedge fund can do it for a while. Maybe your cousin claims that he has done it. Don’t try to do it yourself. Wall Street, and especially Morgan Stanley, with its fine exchange-traded funds, and Fidelity and Vanguard, with their super-low-cost index funds, have made it possible to be a really good investor. So have many other companies with broad-based mutual funds. You can buy domestic funds, foreign funds, foreign developed markets funds, foreign developing market funds — all at amazingly low transaction costs. Just for my own bad self, I suggest the Fidelity Spartan Total Market Index fund (FSTVX), a very broad index fund of domestic stocks; the iShares MSCI Emerging Markets Index fund (EEM), an exchange-traded fund that invests mostly in developing countries’ markets, and the iShares MSCI EAFE Index fund, for Europe, Australasia and the Far East (EFA),which invests mostly in highly developed in Europe, Japan and Australia. This has allowed the rank amateur to take advantage of the long fall of the dollar because the stocks are priced in foreign currencies that have appreciated against the dollar. If you feel like throwing around money speculating on individual stocks, go for it — but only after you have several millions in index and other mutual funds and exchange-traded funds and variable annuities. Just as you might stop to gamble $300 as you pass by the craps table at the Mirage on your way back from the meeting to your room, feel free to take a flier on a few stocks just for laughs. But keep it limited. KEEP A BUCKET OF CASH Have a good chunk of cash, or near-cash, in a place like an ultra-short bond fund. Markets do fluctuate. Sometimes they fluctuate horribly on the down side for a long while. This may coincide with the time you’re fired from a job or have a child starting college or are buying a second home. It is painful to have to sell stocks into one of these down slopes. It is much better to be able to live off your cash reserves. It is even better to be able to buy during those down periods. Ray Lucia calls this approach “bucketizing,” as in keeping a bucket of cash for emergencies and opportunities. KEEP IT SIMPLE, STUPID There are supersharp traders using computers and leverage who claim to be able to make vast sums based on strategies that will work during up, down or flat markets. They use derivatives and complex arbitrage and exotic instruments like subprime mortgage pools. (Hey, did I just say that?) Don’t try this at home. Let the Mississippi riverboat gamblers gamble. You play it safe unless you are one of those gamblers. And if you are, don’t come crying to us ants when you start to freeze in the winter. KNOW THY LIMITATIONS Be aware that there are almost no investment geniuses. The only ones I know of are Warren E. Buffett and John C. Bogle and Jim Rogers. If you want to buy Mr. Buffett’s individual stock, be my guest. KEEP IT IN PERSPECTIVE Beyond an amount necessary to live in modest comfort, money is not that important, and often more of a burden than a pleasure. GET SOME KITTIES And let them crawl all over you. Now you have my best advice. And I can go back to swimming alone with a clear conscience. Ben Stein is a lawyer, writer, actor and economist. E-mail: ebiz@nytimes.com.
hi all, The indian stock market is up again by more than 500 points in reaction to the sebi's talks with FIIs. But still trade cautiously...the festival at the corner...the market could react either way.... Safe trading....
HI market enthusiasts' After yesterday's rally, markets have yet again opened today's proceedings on a firm note, taking cue's from the asian markets....but right now the volatility is there...the sensex is down by 90 points........ The rupee is trading at 39.57 to the dollar.:shock:.....looks rupee will strengthen more.......
hi again... The Sensex swung over 500 points during intra-day trades and gained 0.11% at the close yesterday....across-the-board selling pressure. Today right now as i write this post...the market is very volatile...reasons triggering the volatility....sebi has called for a meeting on proposals to tighten rules for unregistered foreigners and expiry of the monthly futures contracts. The BSE Sensex is trading at 18,575 (up 62points) while the NSE Nifty is trading at 5,508 (up 12 points). The rupee is trading at 39.51 to the dollar.... overnight losses in European and US markets also may hurt the market sentiment. CAutious trading gals.....
