Ideal Capital Structure: Looking for the right debt-equity mix
To ascertain the financial health of a company, amongst other things, it is important to analyze the capital structure of the company to understand how much of borrowed money does the company operate with. One of the most important financial indicator and which gets every investors attention is the debt to equity ratio. The capital structure of a company […]
Stock Market Operators-How Do They Do It?
Over the past 200+ years (and perhaps more) there have been many instances of dramatic rise and fall in the prices of things that are traded. At times this is market driven and prices rise and fall purely based on demand and supply; while on others, the price is made to behave that way. In the […]
Making Long Term Investment Decisions Based on Risk Profile
Since I get this asked a lot, I thought I’ll write a post on this topic. Note: I will assume that long term is 3+ years with some of the investments being purchased for a much longer period (read indefinitely). The problem with equity investing is that the line between trading and investing is blurred by the […]
ROCE vs ROE
Return on Capital Employed (ROCE) and Return on Equity (ROE) (also called– Return on Net Worth (RONW)) are both used to measure the profitability of a company based on the funds with which the company conducts its business. ROE measures the amount of profit generated by the company on the total amount of shareholder’s equity whereas; ROCE highlights the […]
Stock Market Outlook for 2014-Initial Public Offering of AAP
I always found the concept of ‘Value at Risk’ pretty interesting. Usually nobody ever pays attention to it until it is breached. I am not sure how many of you are buying this one but the value at risk for this political outfit is zero as it usually is for start-ups. Which means what? For […]
Top Line and Bottom Line Profitability
Often analysts and proprietors get into the top line and bottom line profitability growth figures. What are they talking about? To understand this, refer to any financial statement, for example — Ashok Leyland Top line refers to gross sales or total income from operations generated by the company in a given period (i.e. this is the first line item […]
Psychological Traits of a Successful Stock Investor
The Successful Stock Investor Imagine a world where everyone was equally intelligent, with identical psychological traits and access to the same information. What purpose would the stock markets serve then? I’ll answer that – None. The business of stock Investing thrives on these 3 things – Intelligence, Psychology and Information. After closely observing many successful stock investors, I have realized that having […]