Stock Market Valuation

Determining Worth

Opinions about companies vary widely on the stock market, and more than one view often has merit. It all depends on what you seek from your shares, and the duration for which you plan to stay invested in them. Dividends are obviously popular, but geometric appreciation is also the stuff of many dreams! Each company has its own charms, but not all are on the ascendant at any point of time. Uncertainty plagues the stock market aficionado, and delights only in proportion to despair! The trick is to stay on top in net terms, and that is much easier to express than to achieve.

Key ratios are the traditional way of stock evaluation and they remain the acid test for investment. Numbers do not lie, though canny executives can dress the numbers at the end of each reporting period to some extent. Profitability, liquidity, and productivity are key performance measures without which we have no real picture of our assets. However, ratios celebrate the past, and who wants to be duped in to an unprofitable discontinuity? The key concern of investors has to be in terms of the most reliable possible soothsaying! There are no guarantees that dividends and price trends have to continue!

Business forecasting is a rather well-kept secret, but it lies at the essential core of stock market valuation. Those who stay out of the charmed circle of stock market analysts capable of predicting how companies will fare in the future, run grave risks of financial failure. Depending on professionally managed funds, or putting money in to bankable securities are ways of dealing with analytical deficiencies, but they are boring and fetch pedestrian returns! It is but natural to aspire for direct investment transactions on par with the best!

We have prepared a smorgasbord of valuation concepts through interaction with some of the canniest minds in the stock market business. How does one go beyond the numbers? What should we ask of management? How can disclosures and statements be analyzed?

Come sample our fare and let us know what you think. How do you take investment decisions? Do you have stories of success from which we can learn? We eagerly await your views!

 

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