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How to avoid value traps?

May 7, 2013

Here is today's recommended reading list from Equitymaster...

Is the oil and gold boom over?
For decades commodity prices were driven by the demand in the fast growing Chinese economy. Today, Europe is on the brink of recession, the US economy is growing at only 2% per year and it appears as though China is facing a major slowdown. Given these circumstances, will natural resources continue to retain last decade's momentum? Read on to find out... (Bloomberg)

Why banks are still too big to fail?
It seems that the world has learned nothing from the 2008 financial crisis. Five years after the crisis, the top banks are still too big to fail. Read on to find out why.... (Bloomberg)

Is India ready for shale gas?
Shale gas, or the emergence of fracking technology to be precise, has revolutionized the energy world. It has given a sense of the otherwise elusive supply security to the industrialized world. The story began in the US. This shale gas revolution in America has turned around the industry. Today it contributes to one-third of the United States' gas supplies. By 2030, it might provide half. Thus could shale gas become the game changer that India needs to become self sufficient in energy? Read on to find out. (Forbesindia)

How you can complete a MBA in a weekend?
It is ridiculous to think how one can complete a MBA in a weekend. Well ask this to any Berkshire Hathaway shareholder and he will tell you how it is done. Every year knowledge-thirsty shareholders and spectators flock from all over the world to hear the Oracle of Omaha, Warren Buffett, and his curmudgeonly sidekick, Charlie Munger, pontificate in grand fashion on the conglomerates' performance, as well as on a wide array of current events. Read on to find out what happened in this year's shareholding meeting. (The Motley Fool)

How to avoid value traps?
Value investing is buying stocks that are perceived as being worth more than what you pay for them. However, it would be dangerous to go out and buy any stock that meet these criteria, as a stock that appears cheap may in fact be on the brink of bankruptcy and not a bargain at all, despite the figures. Sorting out between the true bargains and the false bargains, or value traps, is not easy. Here are some things to look for that may help you to make the distinction with caution. (Investopedia)

Devanshu Sampat

Devanshu Sampat (Research Analyst) has a degree in commerce and nearly 5 years of experience in equity research. He draws inspiration from successful value investors across the globe and constantly endeavours to refine his own unique stock picking approach. While a firm advocate of the principles of value investing, he believes in adapting a versatile investing strategy in response to varying market conditions. Devanshu contributes to our Megatrend investing service The India Letter.

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Sep 25, 2020 11:55 AM