tag:blogger.com,1999:blog-7148222695370746347.post1421913128051184306..comments2023-10-15T17:16:24.091+05:30Comments on Stock Market Charts | India Mutual Funds Investment: How to identify winning stocks – a guest postSubhankarhttp://www.blogger.com/profile/13248068905130821262noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-7148222695370746347.post-16834480073016134122011-04-28T14:12:40.493+05:302011-04-28T14:12:40.493+05:30Thanks LovelyGuy, Titu and Scorpio for your commen...Thanks LovelyGuy, Titu and Scorpio for your comments. My response is given below.<br /><br />LovelyGuy: <br /><br />• In addition to this, I suggest to look for two more additional things. First, the % of share pledged by the promoters and the second, if the promoters have bought/sold stocks in the recent 6 months.<br /><br />• Instead of debt:equity, you may like to consider debt:profit ratio. The reasoning is already given in the article.<br /><br />Titu: <br /><br />• PE and Earning yield are serving different purposes. When we are arriving at PE we are considering the average of maximum PE of each of the last 5 years. This way we are ensuring that we are not overpaying interms of PE valuation. It helps in removing the stocks which are overheated during short span of time.<br /><br />• While we are taking Earning Yield, we are comparing it against the AAA bond yield. An equivalent of triple A bond in India can be RBI Bond which ensures the highest safety. So in a way we are ensuring the safety of the funds put in the stock. Remember the 1st rule of investing is to protect the investment then think of returns.<br /><br />• By considering both these factors we are locking the stocks with safety and valuations.<br /><br />Scorpio:<br /><br />• Nothing wrong in normalizing the profits but in that case you may have to normalize the debt also for the same duration which may not be the correct way. <br /><br />• Instead of taking the profit of last year, you can take the profits of last 4 quarters. This number becomes important and more relevant when you are comparing in the middle of the year instead of the beginning of the year.<br /><br />Trust this clarifies.<br /><br />Cheers,<br />Niteen S Dharmawat<br />http://dharmawat.blogspot.com/Niteen S Dharmawathttps://www.blogger.com/profile/14299180659043749768noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-23686940303564075022011-04-26T23:16:13.708+05:302011-04-26T23:16:13.708+05:30These guest posts rock :) Nice idea to have them. ...These guest posts rock :) Nice idea to have them. I am on and off your blog, but always get to learn from this site.<br /><br /><br />"If inventories increase faster than sales, a problem is brewing"<br />and the point about 5 times the profit should be the debt.<br /><br />Just to be a bit more conservative, we should make it normalized profits (maybe average 3 years profits)<br /><br />very good points, I learned something and have added these in my list to check :)scorpiohttps://www.blogger.com/profile/01323816247057721005noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-69165636092227449642011-04-26T10:00:13.205+05:302011-04-26T10:00:13.205+05:30Hello Sir,
First Thanks to you both, you have give...Hello Sir,<br />First Thanks to you both, you have given us an excellent article, as I am a new Investor can you just explain or elaborate why earning yield is important considering we already check PE Ratio, Or we just repeating the same thing again.<br /><br />Thanking you both in Advance…<br /><br />-TituAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-88429570186127519042011-04-24T23:48:24.998+05:302011-04-24T23:48:24.998+05:30Excellent Post. Thanks to Niteen and Subhankar. I...Excellent Post. Thanks to Niteen and Subhankar. I have learned Net cash flow from Subhankar and I have a great respect for providing me with such opportunities to learn. For selecting a stock: The only other parameter I look at is (mainly for small and midcap) greater than 40% of promoter holding. (Minimum) For small caps, I don't choose a stock where DE is greater than 1. (Instead of 1.5)<br /><br />Thanks and regards<br /><br />LovelyGuyLovelyGuyhttps://www.blogger.com/profile/08354469998302032323noreply@blogger.com