Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Is value investing still relevant?
Thu, 26 Feb Pre-Open

"Only when the tide goes out do you discover who's been swimming naked" - the famous saying by Warren Buffet has often quoted by value investors to justify there belief in picking good businesses. However, it is getting difficult to prove this point in the US markets. Blame the zero interest rate policies and reckless printing of money. The years of loose monetary policies have penalized quality businesses and boosted the valuations of average and bad companies. No wonder the cautious investors are disappointed.

Low interest rates have left little or no incentives with the managements to cut down debt for companies in US. Irrespective of the business performance, the stock prices are generally going up. And as the era of cheap money is likely to continue, low quality stocks may continue to rule. No wonder, value investors are losing patience.

Unfortunately, the Indian equity markets are not untouched with this flood of cheap money either. A lot of the foreign money has found way into Indian equity markets in search for higher returns. Supported by the foreign money inflow, the valuations for most of the stocks - good, bad or ugly, have gone up, leaving less and less opportunities for value investors. What have further supported the trend are the optimism and reform expectations riding on the new Government. This is despite the fact that there is significant change yet at the ground level.

However, we do not believe that this era of easy money can continue forever. As and when the taps are turned off, the implications will be grave for stock markets around the world, India being no exception. To shield from that risk, it is important that investors look for value proposition in every investment. Ultimately, that will be determined by the earnings growth and cash flows in the long term. And as far as betting on these prospects is concerned, one is better off staying away from the companies with weak balance sheets, bad business fundamentals and no competitive advantage. While it needs a lot of patience and discipline, this is certainly the approach we recommend long term investors to follow.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary


What else is happening in the markets today? Dig in...

Equitymaster requests your view! Post a comment on "Is value investing still relevant?". Click here!

  

Views on News

Bond Yields Are Surging. What Should Be Your Debt Funds Strategy (Outside View)

Mar 2, 2021

Bond Yields are surging. PersonalFN explains the outlook for Debt Markets and what should be your debt funds strategy in a rising interest rate scenario.

Such China Challenger Stocks are STILL Ignored and Undervalued (Profit Hunter)

Mar 2, 2021

Don't mistake defence stocks to be the only China challengers.

Beware the Ides of March (Fast Profits Daily)

Mar 1, 2021

The month of March is usually difficult for traders. This time it will be even more so. Find out why in this video.

UTI Nifty200 Momentum 30 Index Fund: Aims to Benefit from Momentum Investing Strategy (Outside View)

Mar 1, 2021

PersonalFN analyses the features of UTI Nifty200 Momentum 30 Index Fund and explains the potential this fund has to offer to its investors.

How to Have a Perfectly Normal Day Even if Sensex Falls 2,000 Points (Profit Hunter)

Mar 1, 2021

How can someone witness a 2,000 point decline on the Sensex and still stay perfectly calm.

More Views on News

Most Popular

It's the Beginning of a New Bull Phase in Smallcaps (Profit Hunter)

Feb 24, 2021

Last time the smallcap index crossed 19k a big correction followed. Here's what makes it different this time.

Make Rs 5,000 Per Day Trading the Market (Fast Profits Daily)

Feb 25, 2021

In this video, I'll show you how to get started on the path to daily trading profits.

I Believe the Investment of the Year Will Be...

Feb 19, 2021

In this episode, ace trader Brijesh Bhatia talks to us about the best investments of 2021, his profitable trading system, and much more.

The Hidden Tesla in My Great Indian Wealth Project (Profit Hunter)

Feb 23, 2021

An Indian company founded three decades ago in a garage caught my attention...

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Mar 2, 2021 03:36 PM

MARKET STATS