how many times the valuations holds true

Beating market all the times is an impossible task, although many people beat the market on daily basis but the same Alternative-Investments-Collage1person 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 might be  breaching  20,000 level and may go on to breach 30,000 level as well …

There are 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 Unitech, L&T etc 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 a year ago 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 markets have gone way below the fundamentals. Markets are ruthless nobody is exception to them.

Although the markets rallied today we entered in to 2065 Samvat with a silent note on this Diwali and almost entering to 2013 . The law stands good here whatever goes down will go up. But time is the master of all .

Wishing you all my readers MERRY CHRISTMAS!

One thought on “how many times the valuations holds true

  1. Oversold and Overbought situations can also get affected by the macroeconomic situation of the country. Though you are right in identifying and questioning the credibility of the valuations of the stake prices but I feel that if valuations can baffle you then Macro and Micro economic situation can guide you in a better way.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s