Prajna Capital - An Investment Guide

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...

IN an age when shares can be purchased at the click of a mouse, filling a life insurance proposal continues to be a major chore. More often that not it is the insurance agent who, in his eagerness to sell, fills in the details on behalf of the insured. What the proposer doesn’t realise is that such a casual approach can make a crucial difference when it comes to pricing, and in ensuring that claims are not prejudiced. Unlike other transactions, insurance is based on faith. Since the insurance company cannot verify every bit of information, it accepts in good faith whatever details the proposer provides. The flip side is that this gives the company the right to reject claims if there is non-disclosure of a fact that is material to the pricing of premium. If there is a vague or incomplete entry in the proposal, the underwriter may play it safe and bracket the insured in a higher risk category. This is more applicable in case of policies where there is a high sum insured. Tak...