Prajna Capital - An Investment Guide

IF the bull run during the last few years had encouraged retail investors to shed their apprehension regarding equities, the subsequent downturn has made them retreat to traditional safe havens like gold and fixed deposits. While it’s not surprising, this short-term view may prove to be detrimental when investing for a long-term goal such as creating a retirement corpus, which necessitates an investment horizon of at least 15-20 years. For those who are comfortable with this kind of horizon, there is no need to look beyond equities, as it is the ideal wealth creation tool, feel market experts. As per data provided by IDFC Mutual Fund, top-rated diversified equity funds have outperformed other asset classes over a period of 15 years. Between January 1994 and January 2009 , they delivered a return of 14.22% against 6.09% from gold, 8.64% from fixed deposits and 9.97% from real estate. Equities have always earned a premium over other investments options over a longer period of ti...

THE real dilemma today is how to protect wealth from erosion and make it grow sufficiently to at least beat inflation. The volatility has been unnerving and is not restricted to equities; even bonds have seen swings never experienced before. So much so that there was a run on liquid funds in October as risk aversion touched an unprecedented high. Real estate, which witnessed a price spiral in the last three years, is also a major victim of the market slump. Also, compression of time for market moves means shorter window of opportunity to react. Risk aversion and risk premium is at its peak and investments flows have evaporated. So does the turmoil in the markets mean that investors remain passive and wait for the troubled times to pass? Inaction may not be the best solution for one’s portfolio. As adages go, “ Invest when there is blood on the street, sell when there is greed, buy when there is panic .” These words of wisdom which have stood the test of time suggest well thought–out...

‘UPON THE Education of the people of the country, the fate of the country depends.’ Our country seems to have taken the wise words of UK’s inter-war year’s Prime Minister Benjamin Disraeli in true spirits. Given the high level of illiteracy in the country, and the need to ensure that Indians are as competitive as their global peers, the government has been taking steps to boost education sector. While the government has been raising the budgetary allocation for education every year and has also imposed 3% cess to promote primary and secondary education in the country, it also provides tax breaks for those who are pursuing higher education. Section 80E of the Income Tax Act is in fact a boon for students who wish to undertake graduation and post graduation courses in various educational fields. Rising cost of education has forced most students to take loans to pursue their dreams. Section 80E, thus, ensures that any interest paid on these educational loans is exempt from incom...

NON-LIFE insurers will in the near future develop a standardised mediclaim policy to facilitate portability in health insurance. Besides having uniform coverage, the policy would have standardised benefits for ‘no claim bonus’. The general insurance council - an industry body representing non-life insurers - will meet to discuss the details, according to two industry officials. Health insurance portability, as defined by the regulator, aims to facilitate change of insurance provider without the insured losing out in terms of the policy coverage. While policyholders can shift companies even now, the essence of portability is that an insured is able to carry his track record with him. In other words if a health policy covers pre-existing ailments only after four years and a policyholder decides to shift to another company in the fourth year he will get immediate coverage of pre-existing ailments and will not have to wait another four years. Another advantage is, if there i...

SINCE their launch, Unit Linked Insurance Plans ( ULIP ) have been a complete rage; but that's not the case now. This year, thanks to the slowdown, insurers are seeing lower premium income compared to last year. So to maintain the spark in ULIPs, insurance companies are trying to entice buyers by offering guaranteed returns on ULIPs! How's that possible? Let’s decode. As of now three insurance companies are offering guaranteed ULIPs. SBI Life Insurance Smart ULIP Birla Sun Life Insurance Platinum Plus II Tata AIG Life Insurance InvestAssure Apex Unlike non-guaranteed ULIPs, these newly launched plans shield you from the downside of the market by assuring guaranteed returns. These plans are like investing in fixed income products that offer secured returns. Workings of the plan: These plans are structured into four phases. Subscription phase: During this phase, the plan is open for a limited time only. For instance, SBI’s Smart ULIP is open for a period of one year. Premium ...

WE ARE all aware of the term personal financial planning as we have heard about it either on television, read in newspapers or had our advisers use it before us. Earlier, we could afford to ignore it as “earning returns” was not that complicated. But in the prevailing times, when economies world over are struggling to overcome recession, boost demand and accelerate growth, financial planning gains much prominence. It is more a need and necessity than being a matter of choice. While financial plans differ from individual to individual and situation to situation, one recommendation that is uniformly maintained is the need for maintaining an emergency fund, a contingency reserve that can come in handy if situation demands. It was a common trend to find most people take this part of the plan lightly and not abide by this recommendation, thinking that they could always swipe their debit/credit cards and access liquidity as and when required. But times have changed. There is an incr...

Look for Stocks with Earnings Growth Companies that show a consistent growth in earnings make attractive investment candidates for stock investors. Use R&D Spending in Evaluating Stock Research and development is important to every company, since that's where new products and services are created. Price Earnings Ratio - How P/E is Calculated The Price to Earnings Ratio is one of the most important numbers analysts look at to understand how the market values a stock. Beating the Stock Market - Why you may want to Judge your Stock Investments Differently Beating the market with your stock investments may not be the best goal for your portfolio. PEG - How PEG is Calculated PEG ratio provides investors a way to calculate how much future earnings growth is going to cost based on the stock's P/E and projected earnings growth rate. Price to Sales Ratio - How to Calculate the P/S The Price to Sales ratio is a tool for evaluating companies with no earnings that looks at how the ma...

Evaluation of stock is done with Fundamental Analysis Tools. Fundamental Analysis Tools - These are the tools of fundamental analysis. Fundamental analysis relies on several tools to give investors an accurate picture of the financial health of a company and how the market values the stock. What is an Economic Moat An economic moat protects a company from competitors by creating obstacles for entry into the market. A Good Company with a Bad P/E A good company can be a risky investment if you pay too much for it. The P/E is a good tool for a rough idea about a stock's value. Why Free Cash Flow is so Important Free cash flow is one of the most important numbers you need to know about a stock. It will help you determine a fair price for the company's stock. Earnings Per Share - How to Calculate EPS Earnings per share or EPS is one way to compare companies, but it does not tell you about market value. ROA is a Leading Measure of Company's Efficiency Return on Assets is an imp...

HOW often have people planned a financial transaction meticulously — down to optimisation of tax implications, based on advice, hearsay or their own reading of the law — and then realised to their dismay that a minor detail or development having been overlooked, the entire dynamics changed significantly? Well, one can take heart from the fact that one is not alone in such a situation; many are the circumstances under which people have had to cringe at that one slip, before moving on to correction, defence or litigation. Take, for instance, the lack of care to report appropriately the details of your income to your employer. You have moved, in the middle of a financial year, to a high-paying job, where taxes are withheld by your employer after taking into consideration the basic threshold for exemption. If you have not reported the income from your previous employment, and taxes already withheld after having considered the basic threshold, what you find at the end of the year, or ...

Common do’s and don’ts to be followed by all investors are as under: An informed investor is the one who can make money. Remember to carry out your own due diligence about the promoters of the company, their plans, their past track record etc. Read the offer document carefully. Like all investments, IPOs are also not risk free. However you can manage the risk by carrying out due diligence and planning. Never follow the herd mentality. Be yourself. Remember how much effort you make while making purchase decisions for your other needs. Investment in IPOs is no different. During bull run, a number of fly by night companies tend to take investors for a ride. Beware. Remember we are in disclosure based regime and not merit based regime. This means that any company which meets the requirements can come out with a public issue provided adequate disclosures are made. So be careful about such operators. Plan for a long term investment. Good investment for a longer period of time will give decen...

CRISIL IPO (Initial Public Offering) Grading is an opinion on the fundamentals of the graded issue that reflects CRISIL's independence and expertise. This opinion is expressed as a relative assessment in relation to other listed equity securities in India. The assessment is based on a grading exercise carried out by industry specialists from CRISIL Research. A CRISIL IPO Grade 5/5 indicates strong fundamentals and a CRISIL IPO Grade 1/5 indicates poor fundamentals. CRISIL IPO Grading reflects its assessment of the graded company's equity fundamentals as distinct from an assessment of debt fundamentals. A CRISIL IPO Grade should not be construed to mean a comment on the price of the graded security nor is it a recommendation to invest or not to invest in the graded security. However, this grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The grade is not a recommendation to buy / sell or hold the graded instrument, or a comm...

Single stock futures can be risky investments when purchased as standalone securities. There's a possibility of losing a significant chunk of your initial investment with only minimal market fluctuations. However, there are several strategies for buying stock futures, in combination with other securities, to ensure a safer overall return on investment. One of the most effective stock future strategies is called hedging. The basic idea of hedging is to protect yourself against adverse market changes by simultaneously taking the opposite position on the same investment. Let's say you buy a share of traditional stock at $50. To make money with that stock, the price has to go up over time. But that's not necessarily true with stock futures. In addition to buying the stock, you could take a short position to sell the same stock on the futures market in three months. This way, even if your stock price goes down in three months, you'll make up some -- or even more -- of the mo...

But luck may not always be on your side. With the frequency of such attacks, as also other risks and unforeseen accidents growing, a wedding insurance is something you may want to look at if a marriage is being planned in the family. Event insurance plans like this is still in its nascent stages due to low awareness. And given the sacred nature of the ritual, nobody wants to discuss or think negative. But as wedding spends and risks grow, it makes sense to cover the potential monetary loss. The policy in those countries even covers the loss of the wedding ring, the wedding gown not reaching on time and even the expenses/loss due to late or non-appearance of the photographer which may mean staging the event once again for the photograph. In India, most insurance companies — including ICICI Lombard General Insurance, Oriental Insurance, Bajaj Allianz and National Insurance — offer wedding insurance. The policy is tailor made to individual requirements and needs. The sum insur...

Open Interest is the total number of outstanding contracts that are held by market participants at the end of the day. It can also be defined as the total number of futures contracts or option contracts that have not yet been exercised (squared off), expired, or fulfilled by delivery. Open interest applies primarily to the futures market. Open interest, or the total number of open contracts on a security, is often used to confirm trends and trend reversals for futures and options contracts. Open interest measures the flow of money into the futures market . For each seller of a futures contract there must be a buyer of that contract. Thus a seller and a buyer combine to create only one contract. Therefore, to determine the total open interest for any given market we need only to know the totals from one side or the other, buyers or sellers, not the sum of both. The open interest position that is reported each day represents the increase or decrease in the number of contracts for that da...

I bought 500 shares on 1 January 2007 at Rs 220, 100 shares on 10 January at Rs 185 and 50 shares at Rs 165 on 18 May 2008. On 21 June 2008, I sold off all the 650 shares at Rs 655. What is the return on my investment? XIRR is used to determine the IRR when the outflows and inflows are at different periods. Calculation is similar to IRR's. Transaction date is mentioned on the left of the transaction. In an excel sheet type out the data from the top most cell as shown here. Outflows figures are in negative and inflows in positive. In the cell below with the figure 4,25,750, type out =XIRR (B1:B4,A1:A4)*100 Hit enter. The cell will show 122.95%, the total return on investment. Also used for: Calculating MF returns, especially SIP, or that for unit-linked insurance plans.

It is not easy to predict the market direction. But in order to maximise returns, it is important to buy the right stock at the right price and sell it at the right time. Investors always ask the question - is this time to sell or should I hold it for some more time? These are a subset of symptoms that can indicate a possible correction in the near term. Investors can start taking profits (or part profits) when one or more of these symptoms show up in the market. Stretched valuation Market valuation is the sum of individual stocks valuation. Valuation of stock is derived from its expected future performance. In a bull market, stocks have a tendency to surpass the true valuation. When a lot of stocks go way beyond their true valuation, the market looks over-valued and signals a correction. Global events Global events have direct or indirect impact on stock markets. Things like rising of crude oil prices, metal prices, and fall in the global markets can trigger a fall in the loca...

The Iffco-Tokio General Insurance Company has introduced Barsha Bima Yojana ( BBY ), a weather insurance policy, for the Orissa farmers during the current kharif season. The scheme has been launched in five districts of the state on a pilot basis. The districts are Ganjam, Cuttack, Kendrapada, Khurda and Nayagarh. “We will extend the policy to other districts subsequently based on the response from farmers”, said A K Mishra, the Orissa state head of the private general insurance company. Describing BBY as an index-based weather insurance product, he said, it provided protection to farmers against anticipated crop loss due to either excess or deficiency of rainfall depending upon the geographical locations, weather conditions and crop requirements of a specific region. The prominent feature of the product is that it is not linked to the declaration of drought or flood by the government. The insurance claims will be calculated on the basis of the rainfall data recorded at the weather sta...

• Avoid accessing your Internet Banking account from a cyber cafe or a shared computer. • Every time you complete your online banking session, log off from site. Do not just close your browser. • To access the site on internet, always type in the correct URL into your browser window. Never click a link that offers to take you to the website. • If your log-in IDs or passwords appear automatically on the sign-in page of a secure website, you should disable the ‘Auto Complete’ function. • Use letters, numbers and special characters [such as !,@, #,$, %, ^, &,* (, )] in your passwords to make it complex and difficult for others to guess. • Never share your Internet Banking passwords with others, even family members. Do not reveal them to anybody. • Do not respond to any mails asking for confidential information like PIN, password or account number. • Always check for Pad Lock icon (There is a de facto standard among web browsers to display a Padlock icon somewhere in the window of the ...

SBI, IDBI & ING Vysya Among Banks Interested In Special Machines; Reserve Bank Blesses Move NEED cash urgently but have already overdrawn from your account? You have a cheque from a client but it is of little use in the dead of night. Lost or misplaced your debit card and need cash to pay the party organiser for your little one’s first birthday celebrations? Help is on way, as a couple of banks in India are testing a technology that facilitates instant cheque encashing at ATMs. Used widely across North America and Europe, cheque truncating machines ( CTM )—the contraption that make real-time cheque verification and clearance possible—sit inside special ATMs that the world’s largest makers of these machines, like US-based NCR and Diebold, are now hawking to few banks in India. Government-owned State Bank of India, the country’s largest lender, IDBI and ING Vysya are a few banks that have evinced interest in such ATMs. Banking regulator RBI too has welcomed the move, saying it wil...

This article outlines different degrees of risk tolerance investors have, and suitable investment options Investors often hear of the maxim, 'greater the risk, greater the reward' . Risk tolerance is the level of comfort with which a person takes risk. What exactly is this risk and how does it effect an investor's decision? Risk appetite can be defined as the willingness of an investor to bear risk. Investors despise uncertainty. Risk appetite, risk aversion and risk premium is often used in place of the other. However, there are some finer nuances that distinguish one from the other. A) Risk appetite - Some people take higher risks . In other words, they are willing to lose more until they get the expected returns. A person who can stand all his money getting eroded has a greater risk appetite. B) Risk-averse - Reluctance to accept. Risk-averse persons exhibit reluctance to accept a bargain with an uncertain payoff. He would instead be content with a deal that is...

Unrestricted usage of third-party ATMs ends on Thursday The era of free ATM usage will come to an end on Thursday, October 15. Every transaction carried out on another bank’s ATM could cost an account holder as much as Rs 20 and withdrawals will face a limit of Rs 10,000, the Indian Bank’s Association has said in its guidelines. According to the guidelines, banks can offer savings-account holders five free thirdparty withdrawals every month —they can be charged from the sixth transaction onwards. Current account holders can be charged the fees, which ranges from Rs 18 to Rs 20, from the very first transaction. Most banks are convinced that charging current account and no-frill account customers from the word go is a good idea. It suggests that the usage of ATMs by current-account holders is price-insensitive. For others, banks have decided to frame their charges depending on the profile of the customer. For instance, HDFC Bank is allowing its salary account and premium customers an unl...

An increasingly common and rather disturbing trend in many investments is the absence of a solid 'core' portfolio. In recent times, we have met several investors (most were new to investing in mutual funds) whose investment portfolios were constituted of only thematic and sectoral funds. To further complicate matters, these investments were made in new fund offers launched at a time when markets were surging northwards. Expectedly, such portfolios are in dire straits at present. What is “The core portfolio” By the core portfolio, we are referring to a mix of investment avenues that is capable of delivering an enduring performance across market cycles. For instance, in the mutual funds segment, well-managed diversified equity funds, balanced funds and monthly income plans with proven track records could form the core portfolio. Of course, the investor's risk profile and investment objectives would play a part in determining the core. Once this core is in place, the investor...

IN A world without Lehman, big may no longer be the best as far as banks go. With bigger banks slowing down their loan and deposit growth, midsize banks are now clawing to the top. HDFC Bank has been spotted as the strongest bank in Asia-Pacific followed by state-owned players Punjab National Bank ( PNB ) and Union Bank of India, which has been ranked seventh in a survey conducted by Asian Banker, a company that provides information for the financial services industry. Surprisingly, the survey has ranked the country’s largest bank, State Bank of India, at No. 42. Last year’s list of top-20 banks included 10 banks from Australia, Hong Kong, Singapore, South Korea and Taiwan. But this year’s survey features only two banks — Australian bank Westpac Banking Corp and Citi Hong Kong —from this bigger markets. Interestingly, among the Indian lenders, two PSU banks — Corporation Bank (11) and Bank of India (18) — besides the private bank Axis (19) find place in the list. Several banks with h...

It is easier to ensure a steady income stream through your retirement years if you plan early Some things are hard to predict and planning for post-retirement is surely one of them. The task is more challenging in the current scenario with the growing uncertainties. You are not sure whether you will drag on till 58 or 60 in your current job and the uncertainty could even come from you if you decide to hang up your boots for entrepreneurship in your mid-40s. However, this is for those who are planning to have a long innings in their current job and have a few decades on hand to plan for retirement. Here's how you can plan for a comfortable retirement: List out expenses Before you set out to plan for your life after retirement, check out your expenses. Some of those expenses may not be visible at present but could prove to be a key factor at a later stage. A classic example of this is medical expenditure. As you are aware, medical insurance too does not take care of medical e...

If you delay informing the bank, you may end up with a huge balance. Unless, of course, you have covered the card against fraud WHAT’S the first thing you should do if you lose your credit card? Just call up the bank’s 24 hour call centre and deactivate the card. This should take precedence even over your attempt to track your wallet in the lost trail. This is because very few banks in India offer protection against fraudulent use of credit cards. Of course, you can breathe a little easy if your bank insures your lost card from any misuse. Standard Chartered Bank, for instance, has tied up with Tata AIG General Insurance Company to launch the ‘Plus Extended Protection Plan’ last week. This product, which has to be bought separately, will cover the card customers from any possible fraudulent use of the cards prior to reporting the loss. “We receive several lost card reports in a month. The product will ensure protection to our customers against any fraudulent use. The insuranc...

Here are some useful information on mutual funds. Do mutual fund investors get the benefit of bonus shares, dividends, rights issue etc? When the portfolio is switched by fund manager more often, how is the cost (Brokerage+ Securities Transaction Tax and Short Term Capital Gains Tax etc) passed on to the investor. Are these expenses met through entry load and exit load? Ofcourse. All benefits in the form of dividend, bonus share, right issues, interest and gains on all investments accrue to the fund and reflected in the NAV. Mutual funds have a unique tax status. From the income tax point of view, it is exempt from paying tax on gains accrued due to normal process of business, such as short-term capital gains tax and long-term capital gains tax. The other expenses incurred by the fund can be classified into two broad heads - transactional expenses and operational expenses. All these expenses are charged to the fund and ultimately passed on to the investors. The transactional expense...

Some conditions that enable you to claim a tax deduction on the expenses incurred towards the medical treatment of family members You can take a medical insurance plan for yourself, your spouse, parents or dependent children. Under Section 80D, you can claim a deduction up to Rs 15,000 for the premium paid. Mediclaim policies are offered by almost all insurance companies. Mediclaim policies provide insurance cover for the treatment of most ailments and hospitalisation. In addition to the basic cover, add-ons are available on payment of extra premium. You should go through the coverage and exclusion clauses carefully. In some cases, pre-existing ailments are also covered on payment of an additional premium. The cover may be enhanced to ailments which are not normally covered also. Some insurance companies provide cover for day-care and annual medical checkups as well. For senior citizens who are tax payers and 65 years of age or more, the limit now has been enhanced to Rs 20,000...

You need to invest money and time to build and maintain a portfolio that yields high returns John Maynard Keynes said, 'Don't try to figure out what the market is doing. Figure out a business you understand, and concentrate' . Investing in stocks is more a science than an art. There are certain ground rules which investors must follow to be successful. Even before you decide to invest in stocks of individual companies, it is pertinent to have a proper asset allocation plan, that is, what portion of your portfolio should be dedicated to equity. If you belong to the category to investors who do not have the time to monitor investments closely, you would be better off investing in an equity mutual fund rather than picking up individual stocks. If you want to design you own portfolio, here are some points to help you get started: Identify your comfort zone Are you an investor who would likes to be defensive or are you an aggressive investor? The choice of stocks would ...

Investors' darling Reliance Industries today announced issue of bonus shares after a 12 year-hiatus, a move that analysts expect would flare up the markets on the eve of Diwali. The company founded by Dhirubhai Ambani, credited for drawing retail investors to stock markets in the 1970s, recommended an issue of one bonus share for every share held by shareholders and would help unlock value. The shares fell 1.57 per cent to Rs 2,099 on the Bombay Stock Exchange, but is expected to jump after the unscheduled announcement. The board has also approved a dividend of Rs 13 per fully paid-up equity share of Rs 10 of the company to the shareholders, Reliance Industries CFO Alok Agarwal said. Analysts said that the surprise announcement of a bonus issue by RIL, will definitely act as trigger for the market tomorrow. "This comes as a big surprise to the shareholders of Reliance Industries and would propel investor sentiment. The scrip, which has been under-performing for the past few da...

AN OPEN offer can take place if any of the promoters of a company want to increase their stake or if non-promoters increase their stake to 15% or the company is going to delist from the stock exchange. An open offer is nothing but the exit route, which is given to the existing shareholders by the acquirer of shares through a public announcement. AN OPEN offer can take place if any of the promoters of a company want to increase their stake or if non-promoters increase their stake to 15% or the company is going to delist from the stock exchange. An open offer is nothing but the exit route, which is given to the existing shareholders by the acquirer of shares through a public announcement. What are the requirements for making an open offer? For making an open offer, an acquirer is required to make a public announcement, which should include offer price, number of shares to be acquired from the public, purpose of acquisition, identity of the acquirer, future plans, details about target com...

Some stocks, especially blue chips, pay dividends. This means that for every share you own, you are paid a portion of the company's earnings. For example, for every share of AT&T you own, you will get sent $0.15 every year. Most companies pay dividends quarterly (four times a year), meaning at the end of every business quarter, the company will send a check for 1/4 of $0.15 for each share you own. This may not seem like a lot, but when you have built your portfolio up to thousands of shares, and use those dividends to buy more stock in the company, you can make a lot of money over the years.

A Service Level Agreement ( SLA ) is pivotal for any organization for bringing in more clarity in the communication between the user and the service provider, as well as to ensure effective engagements for any service or product delivery. It provides meaningful information so companies can meet their key targets. Also, it clearly defines the level of services expected between 2 parties and ensures these targets are met within expected standards and budgeted costs. Dissecting SLAs -- What a typical SLA should cover An SLA should essentially have what is expected of each other (the 2 parties involved), the criteria to evaluate the success, the periodicity of the evaluation, etc. An effective SLA must incorporate 2 sets of elements -- service elements and management elements. The service elements must clearly mention details such as the services provided (and perhaps certain services not provided, if customers might reasonably assume the availability of such services), conditions of serv...

A company’s balance sheet is essentially a statement of its wealth ( assets ) and what it owes to others ( liabilities ) at a particular point in time. The assets could be fixed assets like land, buildings, plant and machinery. They could be movables like cars or computers. They could also be liquid assets in the form of cash reserves or receivable payments due to the company from those it has sold goods to, for instance, or repayments on loans given. Liabilities are anything the company has to pay to others. Thus, they would include payments due to its suppliers. Loans taken from others as well as interest due on those loans would also be part of the liabilities. What is owed to the shareholders would also fall in this category. However, balance sheets present this information not explicitly under the heads assets and liabilities, but rather as a statement that gives sources of funds on top and application of funds below. All sources of funds effectively constitute liabilities. Sha...

There are several types of trading styles that persons seeking to profit from short term trades in the market may wish to use. Here is a brief description of the most widely used short term trading styles. Day Trading Day traders buy and sell stocks throughout the day in the hope that the price of the stocks will fluctuate in value during the day, allowing them to earn quick profits. A day trader will hold a stock anywhere from a few seconds to a few hours, but will always sell all of those stocks before the close of each day. The day trader will therefore not own any positions at the close of any day, and there is overnight risk. The objective of day trading is to quickly get in and out of any particular stock for a profit anywhere from a few cents to several points per share on an intra-day basis. Day trading can be further subdivided into a number of styles, including: Scalpers: This style of day trading involves the rapid and repeated buying and selling of a large volume of stocks...

Bear market bottom or not, one thing is abundantly clear. Whether things get worse or not, there is a lot value available in the stock markets. Stock prices of strong companies have fallen along with those of overpriced ones. Hence, bargains abound. Benjamin Graham, father of value investing, believed in buying stocks that were quoting at their liquidation values. Liquidation value means the price you pay for a company that is not operating any more. Having invested at near liquidation values, value investors wait patiently for the value to emerge and make handsome returns. Investing at the time of the Great Depression, Graham got many such opportunities. Today, despite the sharp fall, the share prices are quoting much higher than their liquidation values, but definitely below their fair values. Taking a leaf from Graham's book, you can look for companies whose book values and market capitalisation are equal. In fact, there are instances of companies whose market capitalisati...