Restoring Traders/Investors Faith into Investing

[Einstein]

Bharat forge is now the most expensive stock in my watch list. I believe this stock can correct by 40-50% from current level. CMP: 710 Rs per share.

 

[shreeux]

Bharat forge is now the most expensive stock in my watch list. I believe this stock can correct by 40-50% from current level. CMP: 710 Rs per share.

What are the scripts in your watchlist...?

 

[Einstein]

Over 75 companies from last year, and 35-40 companies from this year.

 

[shreeux]

Over 75 companies from last year, and 35-40 companies from this year.

Ok, How to check every day or any alert to set..? for price fallen..?

 

[Einstein]

Make is list all every company you can find, and start with A

 

[shreeux]

Make is list all every company you can find, and start with A

Sorry, I don't understand..!!

 

[Einstein]

I meant to say look at every company in your list, don't leave any stone unturned. add: there is no criteria of shortlisting which I previously used to follow, every company should be analysed.

Bty, what do you think is the time period where one can say that he is compounding consistently ?? 3 years, 5 years?? or Should we count number of bull/bears periods??

 

[hauler]

Lets live in the "Now". Lets start at the present. And find companies which are currently good investments.

It would be wise to leave out the ones that are already popular and hence expensive. Buying into what is already discovered and by now is over expensive, is usually not such a fruitful thing.

One gentleman brought to light, Helios and Matheson. Looking at the company's statement I found that the company is making money for the past several quarters, has agreeable debt and is well based for a strong upside. Although the price has doubled, its PE is still agreeable. Most important part is that, this mid-sized company is here to stay. While one is invested, it may even make a good buck over the long term.

In the future, returns from Helios could be as good as that of Gruh or Page simply because it has growth on balance sheet and is still undiscovered by the junta as it has a low PE of 4; Whereas Gruh has PE of 45, Page 55!

one confusing part of h&m seems to be the poor RoE and surprisingly low increase in profits in proportion to the increase in sales. NPM at 7-8% for an IT company is not very encouraging and that could be the reason behind low PE.

 

[Einstein]

I believe its hard to understand the economy behind the IT firm. comparing IT with steel firm is easy as we know that when economy is prospering demand of steel goes up (cars, infrastructures, buildings etc) but no can can say same about IT, in the times of depression these companies specially small cap companies can wipe out. their order reserves will dry out in months.

When We listen to quarterly discloses of companies we hear mostly about revenue growth x% this X% that, a security analyst need to understand the economy of the businesses rather then the numbers, like who are their clients, what are the chances that company will keep getting orders from his clients or make new clients, we need to consider the concept of Moat. we know if world govt closes every stock market for 10 years, coca cola will survive, oil companies will, steel companies will(good ones). but we cannot say same about and IT firm.

 

[Einstein]