Investing Basics - Feel free to ask the most basic questions

(ad9) #293

Many Thanks…

(lohiyaakshay08) #294

How to check the result of review of Trade to Trade? (on NSE & BSE)

(Rohit) #295

Can any one please tell me what should be the average Price to book value multiple in bear markets and bull markets for financial stocks (Banks , NBFC , Micro finance companies). What is average range up to which stocks can fall in bear arket with respect to book value and how high they can trade/or have traded in terms of price to book value.

Thanks in Advance.

(Capsule91) #296

Respected Sir and madam, i want to know about corporate guarantee …
I am presently studying HCC and i found that they have mentioned corporate gaurantee in contingent liability section , and they pay 300cr as Corp guarantee to their subsidiary Lavasa annually…but an Strategic debt restructuring is being done in lavasa,
If SDR is completed, then does the company book this corp guarantee from thereafter??

(Abhishek Basumallick) #297

My understanding is as and when the debt is restructured for Lavasa, the contingent liability will be removed from the balance sheet of HCC.

(Capsule91) #298

thanks sir!.. well, ok, if so, then that can imply that cash flow can be now used for other purpose like debt prepayment on standalone basis, or there is no such unlocking in case or contingent liability removal… also, if this was a provision instead of a contingent , then toh definitely the cash flow reserved for ths purpose can ve now unlocked…

is my understanding right??

(Abhishek Basumallick) #299

Don’t know about this specific case, but removal of contingent liability will not release any cash flow, since there was no provision done for it in the first place.

(Capsule91) #300

thats all i needed sir… thank you!!

([email protected]) #301

Can any one help me to understand how to find the intrinsic value of a stock? Should be a simple step to understand

(Rajesh) #302
You can read above link. Lot of valuation material there including intrinsic value. I learned my stock market basic from here only.

(Abhishek Basumallick) #303

It is arguably one of the toughest thing to do in investing :slight_smile:

You need to do a fair deal of self-study on valuation techniques and then figure it out for yourself. You could start by going through the valuation tutorials in

([email protected]) #304

Thanks Basu. Have gone thru Investopidia.

(Chandragupta) #305

Please read “The Little Book of Valuation” by Aswath Damodaran

(pradeep200417) #306

I have one question.
From just a learning perspective, for investing in stocks, is studying the CFA course worth the effort?
Or just the other non-cfa books like Security Analysis, Intelligent Investor good enough?
One point i can think in support of CFA is that it would be structured and organised properly, since it caters to investment.

(The Confused Consultant) #307

CFA (Certified Financial Analyst) is a course designed around investment management, financial analysis related to financial instruments. This also include a generalist area of finance. Obviously a CFA degree will accelerate your knowledge about stock investing. But hang on, why one does a certification? Holistically an argument is to get knowledge, practically to get a job in certain areas where a CFA is preferred. Yes there are example who are not using CFA for job, my guess it would be extremely low. So if you want to spent time and energy for three levels you need to be sure, all for investing?

Investing knowledge is subjective, has it’s own perspective. There are no entry barriers to become an investor or an entrepreneur. This leaves the incumbent to learn the rope by himself and customize as he practice. Of course this has lead to lots of illusion regarding what is correct and what is incorrect process.

CFA with a job in financial institution (if you can get into one of them) will help you knowing underlying forces of market who work at background. This is a knowledge generally not available to most of over the counter investors.

I guess for pure reading perspective you can try the course and syllabus offered by NSE. Light content with India specific.

(yourraj) #308

What is share shortening? Is it workable in Indian share market ? Is there any Indian Jessimore present or in past ?

(The Confused Consultant) #309

You may like to read one of my earlier post on how short selling works in India. Here is the link:

Jesse Livermore is unique, saying that Manu Manek was known to be fearsome short seller in his days. Even Dhirubhai has to intervene personally to stop the damages done to Reliance, also that marked end of Manu Bhai.

Apart from Manubhai, Radha Kishan Damani was said to be short selling during Harshad Mehta days, eventually blacklisted for few years.

(pradeep200417) #310

That clarifies my doubt.

(kk) #311

Hi VP Contributors…Please can anyone guide me regarding how to find out if company is not paying tax then could we find out the reasons behind why the company is not paying tax…

(durairajendran) #312

This is my first post to valuepickr forum, my below questions would be too basic,

  1. Why does a company do a buy back of shares when they can be bought from the open market exchanges for a better price?
  2. Who owns the shares post buy back? Is it promoter? If it is owned by the promoter, does the funding for buyback is made by promoter? If the shares are not owned by the promoter, does it reduce the market cap or outstanding shares number?
    Example: Recently Alembic Ltd announced a buy back of its company’s shares worth Rs. 82 crores at a price not exceeding Rs.80 per share. The actual price of per share during this announcement was somewhere around Rs. 45.
    Why does the promoters of the company made a buy back announcement at Rs.80 when they can buy the shares at much lower price from the open market?
    Does the companies have any restrictions for setting the buy back price? Alembic could have announced the buyback of shares at a price of Rs.60 or Rs.65 (shares were quoting around rs.45 during announcement); why does they want to pay additional money unnecessarily?