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?

Equity valuation techniques!

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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  1. When you see the primary market as suckers waiting to buy your dud/hyped up firm, all and sundry from lawyers to bankers also want to be in on the gravy train. Who pays? Investor- naturally.
    Nothing is likely to change in the near future. Genuine firms with need for capital will prefer to borrow, I suppose, as long as they can afford it.

  2. There are a lot of articles floating around with the general theme that “the facebook stock may tank anytime”.
    All the people who are writing these articles may have been skeptical from the beginning but they held their tongue when the IPO was coming out, from the fear that they might be proved wrong. It was termed as the largest Tech-IPO ever. You didn’t hear negative sentiments at all in the american media.
    Gives us something to think about the self proclaimed experts of the markets.

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