I have done a lot of articles on valuation in the past – and let me repeat, I am a old fashioned investor. I believe that I buy a share so that I can get CASH much more than what I outlay. I prefer seeing more cash up front (dividends) and not have to rely too much on the sale proceeds.
That is one of the reasons that I cannot buy residential real estate – but would any day prefer a shop kind of an investment.
Even in case where I have not been able to see cash flow I have bought – like Bharti at Rs. 80 – and was lucky to exit at almost 1200. However as a general rule, i like to see cash.
Take the case of Reliance Power or Future Capital Holdings. Frankly I still do not see the cash, can any of you?
Facebook also exploited the same thing. Greed. I know a few Indians who had money abroad who were proudly tom tomming their applications – do I need to search for them!! Is it an Enron kinda situation or just an overpriced IPO sold to some super greedy brokers and investors….time alone will tell.
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