How Does a Company Benefit From High Stock Prices?
Note: For the purpose of this article high share price does not mean numerically high monetary value. In the explanations, core focus will be on high valuation of the stock. Did this question ever bother you – after a company raises money via its Initial Public Offering (IPO) or via any primary market issuance to […]
What Should Be Your Expected Rate of Return in Stocks
Last week a few of us were driving back towards Delhi from the interiors of Gurgaon. For those who have not been to Gurgaon – it is without a doubt the most outstanding contrast of beautiful constructions and unfortunate infrastructure. The roads which start with a lot of promise often lead nowhere. Driving though one […]
Return on Equity (ROE) or Valuation – What’s More Important?
One of the most common mistakes which investors make while selecting stocks is paying more attention than is due to the Return on Equity (ROE) or the return which the company generates on the employed capital. While ROE is an extremely important metric it should not be treated as the holy gospel of investing. A single […]
Stock Market Predictions for the Long Term
I have lost count of the number of times I have been asked about the ‘target price’ and ‘nifty levels’. Some of you have written to me about adding a target price column in the subscription section of the site. The omission to add such a column is deliberate. While I love writing my long […]
Nifty PE Ratio as an Indicator of Stock Market Valuation
The Nifty Price/ Earnings Ratio or the Nifty PE ratio is almost certainly the best buy / sell indicator for anyone who believes in buying good companies at cheap valuations. The way to calculate the Nifty PE Ratio is not any different from how the PE Ratio of a stock is calculated. Nifty PE Ratio Nifty […]
How to Select the Best Stock to Buy
As an investor you may face the dilemma of selecting 1 out of 2 or 3 (or even more) stocks. This typically happens when an investor already has a diversified stock portfolio and does not want to add more than 1 new stock. While it may be tempting to add equal quantity of all 3 […]
E-Commerce Companies – Why Valuations and Future Plans Matter
A man once discovered a large treasure consisting of an unquantifiable amount of gold and diamonds buried under his house. He started digging and realized that at some point the entire treasure will come out of the earth. To make most of the situation and the frenzy created by his discovery he decided to invite […]