[Janshakti] Avoid chor bazaar of stock marketsIndian stock markets are not only poorly regulated but full of manipulations and shady operations.The manner in which prices and index is going down is stunning.
All kinds of idiots have sprung up all over India like share tips advisors, brokers, financial advisors and investment consultants.Thousands are making nice living out of gullible investors fees.A number of them are crooks.No one can predict stock markets as these depend on several factors many of which can start in one day time frame.The intraday and short term prices are rigged and manipulated by mafia groups.
Any stock having P/E ratio for any Indian company more than 12:1 is not worth since FD interest rates are 8 to 10% now.Higher PE ratios are acceptable in some countries like Japan or USA where interest rates are quite low.
People should understand that a large numebr of Indian companies are third rate without any competitive advantage ( except labor charges) and tecnnology. These are small on global standards.Any Indian resident should not invest in any company in India having P/E ratio beyond 12. Even that is full of risk as it assumes that company will keep doing at the same level for at least next 12 years to get back even original investment without any earnings on it.This is very dangerous proposition.
See examples of SKS micro finance,Koutons,Aban offshore and so many like these.
All these talks and formulae developed by so called experts and financial and merchant banking companies have bee designed to fool investors in to system and loose the money.
No company in world can keep making huge profits.It is simply not possible.And why shoud they make huge profits?
We are not sure of any company existing even after 2 years and maintain same profit.All this crap like forward P/E on 2011 earnings and 2012 earnings and 2013 earnings is to make suckers out of investors.If tehse criteria ere use dby operators and thee so called multinational invetors and banks,why prices of sintex and biocon going down despite good results? Or other wise these institutions are simply cheating in the markets.
Wait for one more month for markets to flatten out and then take the dip slowly.Don't expect great returns in year 2011 anywhere in world.World is heading for big crisis.
Issued in public interest
Prof R K Gupta
Note example given of some companies are for illustration purpose only and we have nothing agains them.We have quoted about what we know.Please dont use them for decisions and recheck at your own end.
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