Time to buy equity shares?
So many people are asking me:
Is it a good time to buy shares?
Is L&T a good buy….it has fallen by Rs. 400?
Is it time to put money in the Nifty?
Should I average my Reliance Industries – I had bought it at Rs. 1200!
Should I buy Suzlon..I had bought it at Rs. 104?
Frankly I do not have answers to any of the questions.
Is the market at mouthwatering levels in terms of valuations? the answer is NO. Not at all.
Shares like India cement are at a dividend yield of about 2.5% p.a. Commodity shares like EID parry at at dividend yields less than 1. These are not mouth watering levels.
Some scrips like Tata Motors is still priced at a dividend yield of 2%p.a. – and the future is still unknown in their foreign markets.
Should you average L&T, Suzlon, Reliance – well it is your call. Should you average KS Oil?…again your call, frankly your call…
M S PANJWANI
Have u looked at Gic Hsg Fin(5% div yield), Graphite India(5% div yield), Corporation Bank(5% div yield), and what about Coal India the most valued company of the country.
Any views on any of above companies?
Hey don’t tell me that u don’t have answer…LOL
subra
cos. which I will not look at at all. so no view.
Ravinder Makhaik
The stock market is entering an interesting curve but the evasive Subra will only leave you fending your own calls by giving some figures, mentioning some shares and leaving you to take responsibility for the decisions one may take.
Its a rare post when Subra will mention that there is a Stock Sale out there.
In the brief time that I have been reading this space – Once he did do that.
subra
i let people choose their own poison. If I say the index is 16000 and I expect it to be say, 19000 by March, I can assure you it is a FANTASTIC (FANTASTIC + SUPERB+ FABULOUS) RETURN.
HOWEVER, most people will read it as ‘FROM NOW IT WILL ONLY GO UP’. Let us say it goes to 15000 in October and then goes to 19000 in Jan, they will say ‘You should have told us at 15000’. Not that it matters to them – they are only watchers anyway.
I prefer investing my own money – and all this for FREE? WHY oh why? Free advice gets little respect.
I would rather say ‘Invest in the index’….PERSONALLY I PREFER stocks and a few mf schemes…
subra
funnily based on what I will look at and an attractive dividend yield, I could not find anything. I found companies like IOC, Hcl systems, …and a few others…which i will not look at investing. NO THE MARKET IS NOT IN SOME SCREAMING HURRY TO BUY unless you are willing to bet on future growth..which means the value coming from growth, not yield – personally not too keen to buy, but may punt for say Rs. 5-10 lakhs…BUT CLEARLY A PUNT, not an investment..
Krish
These days every financial forum is hijacked with people asking for recommendation of indices prediction, hold/sell/buy stocks or starting SIP in MF and so on. This forum is no different.
For most of the people this is time pass activity on their job desk. Hardly we find few people in India had taken equity investing as full time job. I personally believe the fluctuations in Indices particularly on lower side effects the psyche of the people so much so that it would affect their functioning of primary job until the normal levels are restored. Even while organizations may not be bothered about falling their stock prices, they should be concerned about lower productivity of their staff which would surely impact the company performance in the long term.
Sreekant
When the market is going up, people wait for it to come down. And when it is down they wait for it to go lower. As Krish has pointed out, this is more of time pass or small talk. Serious investors really do not waste time predicting the future.
I feel whether one should invest in the stock market or not would depend on his own circumstances and financial goals. And the simplest way of doing it is putting away small amounts of money continuously over a few years (depending on your time horizon or over at least one complete market cycle) to avoid bad timing. I mean, whether to invest in equity is an objective decision.
And where to invest (Stocks or active funds or indexing) could be a subjective decision which would depend on your knowledge, experience and judgment.
Dr Mohammed Ali Khan
@Ravinder
I think you have misunderstood the purpose of Subramoney.com
Subra is not here to offer us stock tips.. There are plenty of sites for that. By Jupiter, the ENTIRE financial media is all about it!!
Subramoney is about the PHILOSOPHY of investing, its about the PSYCHOLOGY of investing.The day Subra asks us to buy L&T @ 400/-, or something of that sort, is the day that many of us will quit reading Subramoney.com!
Do you agree with me Subra?
subra
Actually there may be a stock sale out there, but for most people (anyway they may not do anything) SPOTTING the bottom is a game. If I invest say Rs. 30L at 5100 index and Rs. 10L at 4600 index and sell some of the shares at 14000 index and 16000 index, does it really matter?
Dr. Khan, thanks, frankly if somebody benefits by reading my blog, good, if somebody learns, better. This blog tries to entertain, tickle, slap you in the face, and teach.
Frankly I do not think Ravinder is a big player in equities..but he is a good journo..base in Simla!
Dr Mohammed Ali Khan
@ PANJWANI
Its not a defense of Subra, its a review, which, as a long time reader, I feel I’m fully entitled to!
Moreover, Subra and I have some significant differences of opinions, particularly with respect to Gold and Gandhi!. If you go through the comments section on these issues you can see them.
So, I’m not exactly trying to be in his “good books” like you say.
Akram Chotu
Subra sir –
Please forgive me for such a dumb question as I am new to equities and trying to understanding the Equity Basics.
Just trying to understand what you are saying. When you say “Shares like India cement are at a dividend yield of about 2.5% p.a. Commodity shares like EID parry at at dividend yields less than 1. These are not mouth watering levels.” … do you mean that the dividend declared by India Cement is 2.5% per annum and that means if you had invested Rs.100 in India Cement then you get Rs.102.5 at the end of the year. Right?
Also, if I understand your words correctly, a Stock that gives dividend yield of (say) 3% per annum is not a good Stock? If so then what is the fair value of dividend per annum one can expect from a Stock to judge its intrinsic value? and how is this dividend yield compared to current market price of the Stock?
I am not sure if I am asking more but just trying to get the basics right. Kindly request you to clarify.