Ray of hope
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The document discusses factors that influence stock market fluctuations. It notes that company fundamentals like profits, operating margins, and debt-to-equity ratios affect stock prices. However, other non-fundamental factors can also impact demand and prices, such as changes in supply or demand due to weather events, economic conditions, or money supply changes. It advises that while short-term market fluctuations may occur, long-term investors should continue investing for growth over periods of two to three years as wealth is created.
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Ray of hope
- 1. ray of hope . . . . . .
- 2. Market rises to new heights Market rises to new heights Market rises to new heights Market rises to new heights Market rises to new heights
- 6. 8.7%up 17%up Wipro 7. 28%up 30%up Infosys 6. 16%up 8%up Telco 5. 19%up 12%up Tata steel 4. 16%up 24%up tcs 3. 5.1%up 8.7%up Reliance ind. 2. 33%up 37%up Bharti 1. profit sales company Sl. No
- 8. OTHER REASONS PRICE vs DEMAND It’s a mango market Price per kg Rs. 100. Normal sale 100 kgs Suddenly demand increases Supply being the same Price goes to Rs. 150 per kg Was there a sudden change in quality of mangoes?
- 9. PRICE vs DEMAND OTHER REASONS If there is a cyclone and there are thunder showers Supply being the same DEMAND FOR MANGOES DECREASES PRICE COME DOWN DID THE QUALITY OF MANGOES COME DOWN ???????
- 10. MANGOES MAY PERISH Shares do not the trick is long term
- 12. A kid takes time to run Can be two to three years But Do not forget to continue to invest in the growth
Editor's Notes
- The question is how long it is going to stay there. Many are skeptical about this growth and term it as short term bubble.
- YOU CAN SEE A BUILDING IN ITS YET TO BE FINISHED STAGES. LET US DISSECT AND SEE HOW IT IS BUILD.
- ASK THE PARTICIPANTS AS TO WHAT THEY SEE OVER HERE. IT IS BUILT WITH REINFORCED CONCRETE, STEEL, CEMENT AND BRICKS ARE USED IN BUILDING A STURDY BUILDING HERE.
- HERE ASK THE PARTICIPANTS WHAT ARE THE FACRORS THAT KEEP THE BUILDING STANDING FOR THE NEXT 100 YEARS. THEY MAY TELL THE QUALITY OF BRICKS, PROPORTION OF CEMENT USED AND QUALITY OF THE STEEL USED. THESE ARE CALLED FUNDAMENTALS FOR BUILDINGS. AND THEY ALONE DECIDES HOW LONG THE BUILDING IS GOING TO BE THERE. WHEN YOU TRY TO DECIDE WHETHER TO BUY THIS HOUSE FUNDAMENTALS PLAY AN IMPORTANT ROLE IN ADDITION TO LOCATION WHICH IS ANOTHER FUNDAMENTAL.
- THE BASIC MESSAGE IS SOMETHING LIKE IF THE FUNDAMENTALS ARE GREAT THE SHARE PRICE OF THE COMPANY IS GOING TO APPRECIATE IN THE LONG RUN 100%. ON THE OTHER SIDE YOU CAN ALSO DERIVE THAT SHARE PRICES OF THOSE COMPANIES WHICH ARE STRONG IN FUNDAMENTALS ALONE ARE GOING TO APPRECIATE IN THE LONG RUN. SINCE INSTITUTIONAL INVESTORS ARE GOING TO LOOK FOR THEM ONLY BEFORE INVESTING.
- HERE WE ARE TRYING TO EXPLAIN THE RELATIONSHIP BETWEEN PRICE AND DEMAND. WHEN THE DEMAND INCREASE NATURALLY THE PRICE GOES UP BUT THERE COULD BE NO CHANGE IN THE FUNDAMENTALS. A COMPANNY’S FAIR VALUATION BASED ON ITS BOOK VALUE COULD BE RS 200 BUT ITS SHARE PRICE MAY GO EVEN UPTO RS 1000 ALSO SINCE THERE IS DEMAND. ON THE OTHER HAND IRRESPECTIVE OF BOOK VALUE AND FUNDAMENTALS OF THE COMPANY SHARE PRICE MAY GO DOWN TO LESS THAN 200 ALSO WHEN THERE IS LESS DEMAND. HERE THE QUALITY OF THE COMPANY IS UNAFFECTED. IN THE LONG RUN WHEN MONEY FLOWS IN IT IS THOSE COMPANIES WHOSE FUNDAMENTALS ARE STRONG ARE GOING TO GO UP. FOR EXAMPLE RECENTLY RELIANCE INDUSTRIES HAS SEEN Rs 960 BUT WHEN THERE WAS DEMAND IT RECORDED 1760 WITHIN A MONTH TIME.