Pranam.
Everyone is interested in knowing whether the stock markets have peaked. Various methods are used to find an answer. Some study the economy and broad trends. Some look at patterns. Clues like relative performance of small, mid and large caps. Maybe, even sudden spurts in the construction of tall buildings. There is another approach.
It is based on a simple piece of logic. Investors are basically buyers of part ownership, called shares, of businesses. On the other side of the table, promoters are sellers of these shares. Sellers generally have more knowledge about their goods and its true worth. They would also like to fetch a high price for their goods. Hence, a rush of IPO indicates that promoters like the prices. Interestingly, there is a flurry of IPOs of late. A rush not seen since April this year. Then there are stock splits and bonus issues. They are mainly done when the share price rises to levels which seem unaffordable for small investors. The number of shares outstanding increase after splits and bonuses and the share price goes down proportionately. In the last two weeks, 13 listed entities have opted for them. Since August, the number is 33.
Of course, the best way of judging valuations is to study companies on a case to case basis. But short of that, sellers' behavior is a great indicator. Right now, the indications are that there are very few bargains left for Indian investors. Hence, it would be advisable to exercise extreme caution.
So lets take a break and go for something different.
So lets take a break and go for something different.
--
Yours Sincerely,
Yours Sincerely,
Jeet R.Shah ~ M.Com , CFP
Research Advocate
!****!****!
Hv a Gr8 Day,
Warm Regards,
ALLIES FINANCIAL SERVICES Borivali (w), Mumbai, India
eMail : AlliesFin@gmail.com
Yahoo: AlliesFin9@yahoo.com
!~! Consider Enviroment Before Printing Anything !~!
