Very common statement from the market analysts these days for the Indian stock market. India Overvalued but the rally will continue. Although based on valuation metrics, Indian equities are now trading at a significant premium to stocks in other EM countries some analyst claim this too.
We have consistently outperformed the market! … Sensex is now overvalued.
“The stock market is overvalued.” “The stock market is undervalued.”
Which one of these statements is true? Well I don’t know. May be both
Thanks to quirks of the most popular way of measuring a stock’s valuation: the price/earnings ratio.
While no one disagrees about what the “P” is when calculating the ratio, there is no consensus on how to Continue reading “Are Markets Overvalued?”
Whenever a stock is bought it is the temptation and hope but not the fear. Many times the trade is made without much of analysis no matter what the stock did in the past it assumes a new life once an investor owns its, and he looks forward to a rosy future. But these simple expectations become complicated by what actually happens it is greed which raises new doubts, new concerns, and conflicts and we wait for more profits and this waiting turns a profitable trade in to losses. So a psychic dilemma with ego, id, and superego turn the situation in a state of constant battle.
Lesser profits are better than no profits or losses. Control greed and take rational decisions about exiting the stock. The execution is more important than reading or writing. Continue reading “Buying and selling in the Stock Market: When to sell and when to buy”
No doubt that India is in the phase of bull run. The brokers calling you for more investment for securities, Mutual funds, debt, Insurance etc. I know people hate to visit the regulatory websites like SEBI, RBI, IRDA and make most of their decision based on the brokers advise.
Quick question before proceeding further how many ever read the prospectus before signing the document for investments.? I guess very few of them.
Sharing some bold points issued by SEBI for securities & Mutual funds at least this is minimum information the person should have before investing 🙂
For Securities : Continue reading “Bull run and the Brokers chase”
Lee Cooperman, founder of hedge fund firm Omega Ad-visors, last month gave a presentation entitled, “Observations regarding: life, hedge funds, the investment outlook” at Roger Williams University. Here are some of the highlights:
On Hedge Funds
– If you produce the returns, you’ll grow. What separates the men from the boys is how you do during periods of adversity
– He again detailed his characteristics of an outstanding analyst or portfolio manager
– He tries to make money in 5 ways: market direction, asset allocation (stocks versus bonds), undervalued stocks on the long side, sell stocks short. and macro investing (and he candidly mentioned the egregiously high fee structure that hedge funds use as well) Continue reading “Hedge Funds through the eyes of Lee Cooperman,”
Investing in the stock market is a bit counter-intuitive. It would seem that the investor that puts in more time and effort managing his investments should have an edge over other investors. However, this extra effort actually can create serious problems. A more hands-off strategy typically works out better for most investors. This is the power of passive investing.
Active vs. Passive Investing
An active investor is trying to get above average market returns by constantly buying and selling stocks. He hopes to find the most profitable stocks on the market through research and market timing. The problem with this is that only half of investors in the stock market can be above average each year. If your picks go wrong, you can earn less than the average return of the market. Continue reading “Is Passive investing more Powerful than the Active investing ?”