Valuations and Mr. Market

Beating market all the times is an impossible task, although many people beat the market on daily basis but the same

person can’t beat the market at all times. Even the czars like Benjamin Graham and Warren Buffet did not able to do so.  Looking at today’s scenario the Indian Sensex has already breached the levels and came back and sustaining for 17000-18000 despite the economy doing not great.

There is number of companies whose valuations are way below there issue price, this type of condition in market is called oversold.

In fact there are some stocks like which can be bought blindly at these levels with a long-term view; well this is a great opportunity for promoters of the companies to increase their stake as SEBI Board has decided that henceforth consolidation through creeping acquisition up to 5% be allowed to persons holding 55% and above but below 75%, subject to the condition that such acquisition can only be via open market purchases in the normal segment, and for the purpose, no consolidation via bulk/ block/ negotiated deal or through preferential allotment would be permitted.

Exactly couple of years back the broking houses and financial companies were earning like anything by valuing the prices of the scripts by using the fancy models like Cap-x, DCF valuation/Mc-Kinsey model/Gordon growth model. But seeing today these valuations look futile, because  sometimes markets act beyond the fundamentals. Markets are ruthless nobody is the exception to them.

Although the markets rallied yesterday in the morning and then gave up in the second half. TCS overtakes RIL as India‘s most valued company .  The law stands good here whatever goes down will go up. But time is the master of all .

2 thoughts on “Valuations and Mr. Market

  1. Without fundamentals it is all speculation…. and speculation is always like house of cards which has to fall sooner or later. The speculators are never individuals or the real investor… they only give the real investor an opportunity to exit.


  2. Dear Jyoti ..try to analyse the trading desk .. the % of fundamental used is itself comes under criticism ….:)


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