Vishal Bharadwaj

  Important ratios for stock analysis PE ratio:-  PE ratio also known as the price to earning ratio and very famous between the investors. Investors use this ratio with other ratios or data to find out undervalued stocks. Read more Earning per share:-  In simple meaning it means “distribution of company’s profit between each shares” it can be used as the indicator for determining company’s profitability. It is best to use PE ratio and Earning per share comparatively. Return on Assets:-  Is company using its assets effectively to generate income, yes or not? This ratio tells us the truth. This ratio gives us idea about management efficiency or capability to run company profitably. It compares company’s earnings as compare to its assets Dividend payout ratio:-  It means “amount of dividends paid to stockholders relative to the amount of total net income of a company”  Dividend payout ratio = Dividends / Net Income. Retention Ratio:-  What company wi...

  As soon as you buy shares in company you become partial owner in that company,whereas debenture holder is creditor of company. Shareholders earn their dividend only when company earns profit, whereas interest on debentures must be paid, didn’t matter company is making profit or not. Investment in shares is like unsecured investment whereas debenture are generally secured through assets of company. Shareholders are authorized to take part in general meeting of company whereas debenture holder have no right to attend, unless any decision affection their interest is taken. Through election of board of directors shareholders control affairs of the company. Debenture holders not concern about management and control of the company. During winding up of a company debenture holders have better claim over shareholders. Debenture holder must be paid before shareholders.

  I think stock selection is an art. More you practice, more you get mastery on it. While selecting stocks prior concern must be given to securing your fund or capital. So that you never get thrown out of market. Although there is nothing like fundamental rules for stock selection but there a some ways though which we can avoid greater risk or which ensures some safety to our hard earned money. These are methods which i follow in my investment, do your own research before putting your money into any stocks or investments. Never put all your money into single stock:  To what extent you have been researched? and how professional you are in this field didn't matter, it will not ensure guaranteed success. And there always  be some risk in the stock market so never over evaluate your ability. When you put all your money in single stock there always be risk loosing all your money if stock price goes against you. Diversify your portfolio. Not excessive diversification:-  At...

  Letter 1985 Ben Graham told a story 40 years ago that illustrates why investment professionals behave as they do: An oil prospector, moving to his heavenly reward, was met by St. Peter with bad news. “You’re qualified for residence”, said St. Peter, “but, as you can see, the compound reserved for oil men is packed. There’s no way to squeeze you in.” After thinking a moment, the prospector asked if he might say just four words to the present occupants. That seemed harmless to St. Peter, so the prospector cupped his hands and yelled, “Oil discovered in hell.” Immediately the gate to the compound opened and all of the oil men marched out to head for the nether regions. Impressed, St. Peter invited the prospector to move in and make himself comfortable. The prospector paused. “No,” he said, “I think I’ll go along with the rest of the boys. There might be some truth to that rumor after all.”

  I am expressing my opinion and I reserve the right to be wrong. Before corona world have seen so many deadly viruses or deadly wars like swine flu, plaque, WWI, WWII etc. And each time human race prove themselves and back to the race even stronger. Although these situations affected economy very badly but one thing everyone accept that - every pandemic  or bad situation support selective industries like during war, arms manufacturing companies earn most and during pandemic associated with diseases its medical and health insurance industry which earns most.   So there lies a trick. If you follow this trick while making investments then in long term your investment can produce honey for your bread. In war situation arm industries earns most and during disease medical and insurance industry earns the most but trick lies in the durability of these type of situation. Question - how long it can sustain? its permanent or temporary? Most of the time you find answer is temp...

  In his 1986 annual letter to Berkshire Hathaway's shareholder Buffett said very interesting thing about fear and greed. He also accepting that anticipating market is always out of his circle of competence. For me these lines are the best lines of 1986 letter. So I putting whole para as it is in front of you. please read- "What we do know, however, is that occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. And the market aberrations produced by them will be equally unpredictable, both as to duration and degree. Therefore, we never try to anticipate the arrival or departure of either disease. Our goal is more modest: we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."

  Everyone has witnessed huge market decline in the month of March when our PM Narendra Modi suddenly announced lockdown to tackle covid pandemic. Sensex stock market index reached all time high of 42273.87 in January of 2020 and from there it fallen down to below 26000 pts, nearly 40 % down. And from there it started healing. Before this great fall my all investments were in undervalued stocks with very low P/E multiple, attractive earnings and exciting track record. Thanks to this quality stocks my own portfolio fall nearly 22 %. Although my 22% of capital vanished, I feel very delighted my portfolio beaten the market index(Sensex down nearly 40%) with significant points.  In the last year of your college generally you are not backed with huge capital support, and your capital is very limited. So securing capital is my first priority. Back on the track, I sold all the stocks with 22 % capital loss and secured rest of the principle capital, and added more capital from my pers...

  PE ratio also known as Price to Earning ratio and the most popular ratio among the investors. They  use this to identify undervalued or overvalued stocks.  we already covered what is PE ratio and how you can utilize this ratio, if you want to learn about this then simply click here. The very basic logic behind PE is, If earnings low then PE high and If earning high then PE low. In general parlance if stocks PE high then it considered as overvalued and if stock comes with low PE then it considered as undervalued. Generally people avoid investing in stocks with high PE but everything comes with exceptions.  Stocks with high PE means "people and investors are willing to pay high prices for low earning stocks". Why people or investor doing so ? there can be various reason behind this, after all its a stock market and everyone have their own perception. Reasons can vary person to person. There can be various reason for paying high PE stocks and one reason can be, ...

    Buying at bottom and selling at peak is myth. Soon you understand this better for your investment. Maybe you have done this before but be honest with yourself this is pure luck. Even ace investors have never bought at bottom and sold at extreme peak. So stop searching for bottom of stock prices and try to find value before buying any stocks supported by its strong fundamentals. Continuously looking for bottom is naive thing, you may miss some opportunities. 

  Disclaimer :-   This is not stock recommendation. Do your own research before buying or selling any stock. During my college days one of my roommate bought microwave oven and with this he got  very simple small corrugated box with brand name printed over it. When we unboxed, inside of it was a very simple but quit heavy glass bowl. It was simple, unattractive but quality product. This was the first impression of the company and its product. My roommates were busy in checking the oven and between this I was resting on bed with laptop on my lap checking financial status of the company. And whatever I saw, I started salivating.  Company name was " Borosil Renewables Ltd ". Company founded in 1962 was totally debt free and company reserve was more than its liabilities, from last ten years constantly growing its fixed asset and from last four years company was profitable. Company was working in two different industries, first solar glass manufacturing and second La...