Stock prices are by far the most sensitive element of a company.
Buy clean companies, review them periodically, and if all is well, continue to hold them for the long term. That will be the ultimate way to your financial nirvana.
The US economic model seems to have broken down and is in need of some major overhaul.
From today, you will be able to buy and redeem open-ended mutual fund schemes on the National Stock Exchange through your stockbroker. The Bombay Stock Exchange too will follow suit soon.
The average listed company has to comply with several laws as it goes about conducting its business. Of these, there are three pieces of legislation that arguably have the most impact on its business.
The US wants China to save and invest in US Treasury. China is doing neither. The traditional saver is today wary of investing the funds in US treasury. Instead the Chinese youth are lopping up credit cards like never before.
If you have indeed chosen your company wisely and have not paid too high a price to buy a part of it, you can indeed expect compounding to work in your favour and a great overall return over the long term. Inflation or no inflation, that would surely be a good position to be in!
This is a basic concept which we as adults understand and we should try explaining to our kids, so they understand the value of money.
There are all kinds of IPOs - the good, the bad and the ugly. But even though different IPOs are of different qualities, there are some general realities you need to keep in mind.
We believe there are certain behavioral stumbling blocks that explain why there are very few value investors despite all the media coverage the discipline receives.
Investors should instead focus on studying stock valuation, and initially test out their judgment on the price of a stock versus the value it offers with the smallest possible sums.
Stocks can be as tricky a business for novice investors as they are for seasoned players.
What are the reasons behind such valuations in the market now?
The BSE Sensex is still 259 per cent up since its levels 10 years back. So just by staying invested in the markets, you would have multiplied your money 3.5 times over.
Hence, to conclude, a combination of factors like unwanted pessimism and greater availability of money is the driving force behind the current stock market rally. Will the markets once again touch the lows of last year? Unlikely. Will they rise even higher? Well, only time will tell.
Not only FMCG companies but even banks, auto, telecom and retail companies are finding it difficult to keep themselves away from the lure.
L&T is trying to aggressively diversify again into a field where it does not have much experience.
Satyam's last month's gaffe of transferring funds to promoter group companies by buying stakes in the latter already raised a stink. It led us to doubt the faith that investors had put on a company's management, its independent directors, auditors, consultants and rating agencies.
The debate is perhaps as old as the stock markets themselves and it goes something like this, "In order to outperform the markets over a sustained period of time, should one stay invested in small/medium caps (SMCs) or stick to only large caps?" The battle lines have already been drawn.
If you were thinking that by raising interest rates, the RBI is only trying to get stricter with credit card holders, think again
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