Widely read:
A question that every investor has or should have is, whether a company is being overvalued. Many times, we are carried away by wonderful companies with exceptional returns of capital. They are great and impressive, but the multiple that we impose on them is beyond what they can ever achieve. A P/E of 80 or even 100 times. The result is that despite the company growing at a very good rate, these high expectations only give losses to investors. No matter how wonderful a company is, it will be a good investment only at a good price. Onto the memes now.
Price that we pay for a company is more important than how good the company is. There is a reason why the cigar butt strategy worked.
We are not saying lump sum is bad, but SIP is a lot safer. You can average your price and take advantage of downturns, which is not possible in lump sum.
We have read so many quotes on investing in our lives, but when was the last time we successfully implemented one? Reading 100 quotes is not important, implementing one is.
This is the mantra for investors - short-term fluctuations are, as the name says, short-term. The focus should be on long-term prospects.
It will be very tempting to get the loss off your shoulders and notsuccumb to it. Add more if the prospects are good because you won't get a better opportunity.
Demergers have always been effective wealth creators when compared to mergers. Companies often overpay and fail to utilise resources during mergers which results in poor wealth creation.
Just when everyone was writing off chemical companies, they are on the rise again. Will this continue? No one knows but it shows how markets can turn in such a short period of time.
New episodes every Friday
