Suggested Reading – September 21, 2009

Blogosphere is an interesting place where you find various bloggers expressing their viewpoints. I am listing some of the articles that I enjoyed reading.

These are some diverse set of articles from fellow bloggers and business magazines. I hope you enjoy reading all or some of these interesting posts.

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3 Responses to “Suggested Reading – September 21, 2009”

  1. Saif says:

    Hello sir,
    I have started evaluating companies more on the basis of fundamentals,and given trading a break (for now :-).One more basic query regarding the p/b ratio.
    Now Book value by simple definition means the amount shareholders can and will get if a company is liquidated immediately.So shouldn’t p/b ratio of all companies be >1 ?? meaning that market would price the stock at least equal to its guaranteed sum which will be returned.Now maybe because of sentiment like in Oct crash many stocks went below 1 just bcz of panic.I did monitor some then and now most are trading comfortable above 1.
    But still some like MTNL(0.6),videocon(0.8) trade below 1.So considering the other fundas like p/e debt /equity,sector … is decent are such stocks screaming to get noticed.How useful is p/b in general and in particular when below 1.


    • TIP Guy says:

      Any parameter as a standalone should never be used to make a decision. This applies to P/B ratio also. It needs to be viewed in conjunction with other parameter like you mentioned. yes, market volatility, perception, or something fishy is what brings these below book value.
      Note: price is a “present term” i.e. it is in real time. But the book value that you find in websites or annual reports are trailing values.

      Best Wishes,

  2. Saif says:

    Thanks for the reply Sir,will look up more and get back.

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