I wld have to agree with mux. I have burnt quite a few fingers in stocks that i had bought after a sharp run up only for them to change trends and leave me high and dry. But the word on the street is that the infy stock is better now than after the record date. So dont rule out an Infy at 6000 soon.
and yes mux, I too would not recommend day trading at all. I do it for the thrill. I do it to test my knowledge viz with the market. And more often than not the market humbles u. 
snan and nick talked of P/Es and valuations. I just wanted to take that discussion forward. Does a High PE mean the stock is overvalued and a Low PE viseversa?
The icicidirect content website has an interesting ratio called PEG ratio which adds on to the PE ratio. I shall demonstrate using an example:
Infy: 30 PE and Wipro: 40 PE.
Let us assume EPS growth esimates for 04-05 for Infy: 30% and for Wipro is 50%
So the PEG ratio now works out to Infy 30/30 =1 and Wipro 40/50 = 0.8
According to them Fund Managers have started using this as a tool as they are not able to compare PEs direcly. So going by the above data Wipro is much better buy than Infy as its potential to grow is not factored into the stock price. 
This PEG is something new to me...will have to study it now!!!
As far as the P/E ratio is concerned, you have to comapre them with the rest of the industry.
Traditionally, IT industry has been the one with the high P/E. If you see the P/E of old economy stocks, they will be much lower. If a stock is fundamentally strong but for some reason has a low P/E compared to its peers in the same industry, then its a good buy. Those are the stocks you are looking for.
At the same time, there are cases where the whole industry has a re-evaluation. Banking is one such industry which is going to do well because of a lot of factors and you can see all the bank stocks touching sky high.
This is what is meant by research. Know your stocks before you buy them.
But to be really honest, Indian markets, ot for that matter world markets, also work hugely on sentiments. If its a bull run, even rubbish stocks tend to go up. And in bear phase, there is no stopping the downtrend. So sentiment is another thing you have to consider before investing.
Okay lets see...
you buy one share from the market tomorrow...
say for a price of 5500...
after some time you get 3 more shares, so now you have four.
The price per share however will drop significantly.
Lets see it goes to as low as 2500.
But you still have 4 shares, so that Rs. 10000 for you.
Plus a dividend of Rs. 115(that will more than take care of your brokerage too!!!)
Not a bad deal afterall
I guess the calculation after record date works differently.
Market Cap = No. of Shares * Share Price
Market Cap today lets assume for Infy is 5000 Crores. So even after the bonus adjustment the Market Cap should be 5000 Crores. In this case the share price would be divided by 4. So the adjusted price would be 1500 and not 2500 assuming that Infy price is 6000 the day before.
So the summary would be ur net worth on Infy both pre and post the bonus will remain the same. Any upsides from 1500 levels will ofcourse be beneficial
This PEG is something new to me...will have to study it now!!!
As far as the P/E ratio is concerned, you have to comapre them with the rest of the industry.
.
Hi...
It's easy to visualise why future growth prospects must be considered rather thn P/Es alone...P/E as such is generally calculated as price/EPS for shares...EPS is again based on earnings for the 4 trailing quarters (what has already happened and is history)...but markets reflect what holds for the firm in the future.....hence PEG sems to be a better indicator after all....but the caveat is tht its is Growth Estimates based..another highly subjective parameter....wht wud u say is the growth estimate for summin like reliance ??? what if thy find new gas reserves in KGB ? or wht if thier infocomm doesnt bring in the profits as expected ??? wht if PSUs stop buying out of their humongous refining capacities .....
so all thes are subjective..thts y no analyst restricts himself to specifi reatios...they are jus indicative...projections of future price are w function fo innumerable variables (inclduign as someone rightly pointed out...SENTIMENTS...now u see how everythign goes for a toss if something drastic happens in economy / a war...
so its not as simple as finding a few ratios and thn going ahead for some with low PE multiple or any other parameters..all these are at best Indicative...
MFs may not be giving u the same kick but well i have lost enuff to know tht the so called "kick" do gives u ulcers in stomach !!
suhas
Okay lets see...
So the summary would be ur net worth on Infy both pre and post the bonus will remain the same. Any upsides from 1500 levels will ofcourse be beneficial
Exactly for the same reaons bonus issues dont generate the same euphoria in matured markets liek US/LSE....we indians seem to think its some sorta gift!! :)...For the same reason if u look into the buyers in infy after bonus declaration, the ratio of FIIs to others is proportionately smaller...but yea whn a company issue bonus share ( esp one with such a great management like tht of Infy) market feels tht the company is going to perform better in the future....
But theoretically its jus capitalisation fo reserves in the books of the firm....in case of bonus issue...
Eg: - Before bonus XTZ might have 10000 in paid yp capital and 30000 in reserves..after 1:1 bonus thy shall have 20000 paid up and 20000 resrves....jus an accountign thingie...thts the only diff...
also going ahead sincethe reserve has reduced, the future dividend yield wud be lesser thn before bonus issue....(again theoretiucally!!!).....
But i always maintain tht Maths and Market ont have much of a love love relation....things might look one way in an excel sheet and entirely diferent in reality !!!
Market Cap = No. of Shares * Share Price
bingo.nickspeedster plz clr ur concepts.
anyway thanx snan buddy fr giving good analysis of bonus.i was a little confused bout them as we indians always overreact to them.
we all can clr our doubts here as nobody has perfect knowledge. lets say, why don't we start by giving our criterion fr picking some stock. like future prospects, EPS,P/E,gut feel(ya, that is a big reason) etc. that can ensure some gr8 exchange of ideas. whatdyasay?
mux
btw, will post mine soon.
Mux
Iam ready to chip in. But before that was just wondering whether ppl out here also do the Technical analysis things before investing? I went through a book
Technical Analysis of Stock Trends by Robert D. Edwards, John F. Magee
Was amazed at how People's psychology was getting repeated in the shape of chart patterns. Discussion could also centre arnd Supports n Resistances, RSI n ROC and Averages and what not. Truly addictive 
What do u say about this
Neyveli Lingnite
ROA = 13%
ROE = 19.3%
ROC = 15.9%
NPM = 42.7%
ICR = 435.3 wow!!!! 😃
Debt/Equity = 0.2
on the other side
Inventory Turnover = 48 days
Receivables Turnover = 333 days (This is very bad) 😞
But CR = 3.5
hmm can be bought
55 - 60 ideal price
SAIL
BV/share = 4.8
Inventory Turnover = 70 days
Receivables Turnover = 31 days
NPM = December quater 12.5% , Last Year = - 1.8 %
on the other side
Debt/Equity = 5.1 (very bad) 😞
ICR 0.8 😞
hmm
25 - 30 can be bought , who know govt. may come out with a offer for sail
Jindal Iron and Steel Co.
BV/share = 196.7
ROA = 5.6%
ROE = 14.3%
ROC = 14.0%
NPM = December quater 9.3% , Last Year = 7.8 %
ICR = 2.6 good for the steel sector 😐
Debt/Equity = 0.9
Inventory Turnover = 34 days 😃 😃
Receivables Turnover = 32 days 😃 😃
hmmm
200 - 225 a very good price to pay
cheers
ace
😃
Hey again! :)
Mutual Funds may be boring for a day-trader or a Udayan Mukherjee fan, but for most Indians who look at safeguarding their capital while still investing in the equity market, MFs are a good option. Some people prefer Sachin, Ravi Shankar, MTV VJs at 9 AM...and if you prefer our man Udayan...nothing like it. 😃 I personally prefer adoring myself in the mirror (no, I'm not in love with myself ;)).
Yes Nick, one sure can make a lot more money by investing in direct equity as compared to the MF Equity, but then, one can lose a lot more money too. Goes both ways I supp.
Anyone here ever invested in Personalized Management Service (PMS)? You can get a Fund Manager to draw a completely personalized portfolio consisting of equities chosen by you. Returns are consistently 25% plus. Minimum Investment though is
in the range of Rs. 50 L. (do we have any young millionaires out here?)
Also, for novices, the Bullseye at www.moneycontrol.com is a real neat way to play with virtual money in the real market..and make some virtual moolah too.
Cheers :)
Neil
p.s. Buddy Nick, whatever gave you the idea I'm a 'big guy'? 😃
a possible compromise between direct equity & MF would be sector specific mutual funds, at last count there were over 1200 mutual fund schemes of all the companies, (debt, equity,etc). the argument for direct equity fails to pass muster when u have som nay mutual funds to choose from, know their portfolios thru the net, & also know the minimum & maximum limit for any instrument( i.e company share in an equity scheme, G-secs in debt schemes,etc)
let the pros do what they are good at, to be a warren buffet u need great patience & an ability to trust your & other's judgement. most of all u need a some liquid money( like 50,000/-) that u can stash way in stocks for 5-6 years, if u are lucky u will hit the motherlode with rates of return like 800%-900%, if not it's a 50,000/- loss spread over 5 years. no not ponit in buying a stock & selling it after 3 months & +40%, thinking u were very smart, this stratergy will make u some money in the short term, but in the long term u will get clogged arteries & nothing else.
regardind ace_bubble,
jindal is in serious shit of being acquired or sold in the next 3 -5 years, it doesn't have the scale, nor the ficus, it'll probably keep it's power business . SAIL is an awesome copmany with a bright future, it's debt/equity is high cos govt rules don't allow it to to offload more equity.tisco & sail will be the one's to watch out for, though i seriously doubt any govt bailout of sail because of lack political fallout.
I have been monitoring HLL for quite some time and i need advice from u guyz..i had bought HLL shares arnd 190 n sold it off at 205...now, the stock has come down to 150 owing to immense competition, low sales n results which did not meet market expectations.
Analysing the pros n cons for HLL...the positives are that its got great infrastructure, good top management, proven expertise n can really take on the competition(take the curent offer of "get one free with every purchase" on shampoos) but the negatives being its a slow mover, market has lost faith in this stock, facing stiff resistance from P&G; etc.
The overall growth in revenues has been arnd 4% for this year end and the dividend yield was 550% on a face value of 1.
Wat would be the ideal time/price to enter this stock..personally i think now is the correct time to buy HLL n keep it locked in the cupboard for 2 years...wat do u junta???
Hmm....not bad ..anything sub 150 looks gud for HLL...BUT ONLY FOR LONG TERM>>>and only if u have surplus......DSP ML has downgraded HLL to underperform....and i dont see any reasons why it shudnt be....P&G; have huge pockets and its not gonna be as easy as Nirma...HLL will ake hits both end of the balance sheet and not jus in margins as was thought of.....
If i were u i wud give HLL a skip even at these levels........
regardind ace_bubble,
jindal is in serious of being acquired or sold in the next 3 -5 years, it doesn't have the scale, nor the ficus, it'll probably keep it's power business . SAIL is an awesome copmany with a bright future, it's debt/equity is high cos govt rules don't allow it to to offload more equity.tisco & sail will be the one's to watch out for, though i seriously doubt any govt bailout of sail because of lack political fallout.
If i were to choose between TISCO and SAIL. I too would choose TISCO purely because of the fact that it is an Integrated Player
hi guys.
ace_bubble man, u had a preety gr8 analysis.the problem being that my fundas r not so developed or maybe i don't had such gr8 vocabulary.quite a few abbrivations went up my head.so plz give full name. will love to participate.
guys, can anyone suggest a good site which give basic fundas fr the market terminology. because i had done a huge blunder 
in my last post.photon buddy, we had mixed bonus and stock split completely. there is no official reduction in the value of share. whatever the value reduction, it is purely on the basis of increased presence of shares in market.the profit went to shareholders who had purchased the share prior to a fixed date, so later buying won't help anyone. it happens only due to promising future returns.i am surprised why no one has corrected us. sorry nickspeedster .
hi
HLL. hmmmm, ya the company is good and has a lion's share of the market.it is also reacting quite speedily to the competition.
but, i'm not that bullish on the company.1st reason being its being too large, an elephant. it won't show any dramatic growth of more than a few percentage which won't excite the indian market. 2nd P&G; will give a big fight to it. its new boss is quite agressive.so,again it is no nirma. 3rd, HLL has many more managers and distributors compared to P&G.so;,it will have to trim to compete. i doubt HLL to pull some rabbit out of the hat. anyway, i had not done any finantial analysis of HLL.so,no idea bout short term gains.
mux
hi guys.
ace_bubble man, u had a preety gr8 analysis.the problem being that my fundas r not so developed or maybe i don't had such gr8 vocabulary.quite a few abbrivations went up my head.so plz give full name. will love to participate.
guys, can anyone suggest a good site which give basic fundas fr the market terminology. because i had done a huge blunderin my last post.photon buddy, we had mixed bonus and stock split completely. there is no official reduction in the value of share. whatever the value reduction, it is purely on the basis of increased presence of shares in market.the profit went to shareholders who had purchased the share prior to a fixed date, so later buying won't help anyone. it happens only due to promising future returns.i am surprised why no one has corrected us. sorry nickspeedster
Wait...wait am totally confused
snan bhai can u help us out?As an investor the only difference i could feel was that for a stock split the face value of the share also goes down. Rest all is same. What happens on the company's books; snan might be able to answer.
In case of the Infy issue, anyone who has one share on the specified date( I think it is 5th July for this one), will get three more shares with the value of each share becoming one-fourth of the original.
I accept the mistake I did in my last post but I am sure that you are eligible for the bonus issue even if you buy today and keep the share till that date.
jindal is in serious s*** of being acquired or sold in the next 3 -5 years, it doesn't have the scale, nor the ficus, it'll probably keep it's power business .
Jindal companies are flagship of OP Jindal group. Its a kind of diversified group not as TATA's , but still its worth is 2 Billion dollars
Lets come to the merger part
JISCO and JVSL are to be merged with the books transferred to JISCO (ther want to merge the steel business)
Now JVSL is not doing good and the merger has some legal issues as JSVL thru its another company owns lots of money to a German firm + some tax related screw up also has occured.
Now even we just add the book value of the shares
JISCO = 197
JVSL = 2
Total = 199
So I said price of 200 is great !!!!
the power company is JSPL which is doing great (but I was not discussing that
)ROE = 41.2%
NPM = 22.9%
TATA Power
ROE = 12.6%
NPM = 12.4%
If i were to choose between TISCO and SAIL. I too would choose TISCO purely because of the fact that it is an Integrated Player
Tisco trades at 400+ where as SAIL at 30+ (Give some chance to SAIL as it has started making profits)
guys, can anyone suggest a good site which give basic fundas fr the market terminology
equitymaster.com
indiainfoline.com
finance.yahoo.com
As an investor the only difference i could feel was that for a stock split the face value of the share also goes down. Rest all is same. What happens on the company's books; snan might be able to answer.
I can also give answer
Nothing happens to company books ..
Its remains the same ie there is no change in the stockholders equity 😃
cheers
😃
I can also give answer
Nothing happens to company books ..
Its remains the same ie there is no change in the stockholders equity
ya ,the company's books are not affected. i.e total of reserves+equity is constant but their % in total gets changed.look at snan's post.
anyway, after photon's and nickspeed's posts, i too am quite confused.PLZ SOMEBODY HELP. tried searching on net but no use.but i am quite sure about my defination of bonus.
ace bhai, indiainfoline doesn't give theory on fundas.i need 1 that gives.also pls explain NPM,CR,ICR,BV/share.looks greek to me.
ace_bubble wrote:I can also give answer
Nothing happens to company books ..
Its remains the same ie there is no change in the stockholders equity
ya ,the company's books are not affected. i.e total of reserves+equity is constant but their % in total gets changed.look at snan's post.
anyway, after photon's and nickspeed's posts, i too am quite confused.PLZ SOMEBODY HELP. tried searching on net but no use.
ace bhai, indiainfoline doesn't give theory on fundas.i need 1 that gives.also pls explain NPM,CR,ICR,BV/share.looks greek to me.
Research the sites I gave in my last post carefully they have many sections .. some that give fundaas too
other sites are
investopedia.com
biggenrsinvest.about.com
btw
NPM = Net Profit Margin
CR = Current Ratio
ICR = Interest Coverage Ratio
BV = Book Value
cheers
😃