Between the Lines

April 28, 2015 by vinaybysani

Travel is an art of being present

Investment Terms Definitions

April 22, 2015 by vinaybysani

Equity
Shareholder equity is considered a more accurate estimate of a company’s actual net worth. Equity is a simple statement of a company’s assets minus its liabilities. Another way of looking at equity is the net profit that would remain if the company were sold or liquidated at fair value. Unlike market capitalization, equity does not fluctuate day to day based on stock price. Market capitalization value is nearly always greater than equity value, since stock buyers figure in factors such as expected future earnings from company growth and expansion.

Market capitalization
number of stocks * stock price

Fundamental Analysis vs Technical Analysis
Fundamental analysis is a method of evaluating securities by attempting to measure the intrinsic value of a stock. Fundamental analysts study everything from the overall economy and industry conditions to the financial condition and management of companies. Technical analysis is the evaluation of securities by means of studying statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security’s intrinsic value but instead use stock charts to identify patterns and trends that may suggest what a stock will do in the future. Assets = Equities(Market Cap) + Liabilities (Debts)

EPS(Earnings per share)
(net income of company) / (total no. of shares)

P/E Ratio
share price / EPS
p/e is simply the % of profit share holder earns.Its usually designated with ttm(trailing twelve months), which implies over 12 months, share holder earned x% profit. Few analysts provide projected p/e as well. Less p/e => share is cheaper. p/e of market is usually 16-17
In detail vid : https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/p-e-discussion
Balance Sheet of a company
contains only 3 factors which should sum up as Assets = Equity + Liability

Investment Terms Explained [Hyperlinks]

April 22, 2015 by vinaybysani

https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds

Equity Value vs. Market Cap.
http://www.investopedia.com/ask/answers/122314/what-difference-between-market-capitalization-and-equity.asp

The amazing rule of 72

April 21, 2015 by vinaybysani

Do you know the amazing Rule of 72? If not, learn it now and remember it forever. It’s easy, and it
unlocks the mystery of compounding. Here it is: X × Y = 72. That is, X (the number of years it takes to
double your money) times Y (the percentage rate of return you earn on your money) equals . . . 72.

Let’s try an example: To double your money in 10 years, what rate of return do you need? The answer: 10 times X = 72, so X = 7.2 percent.

Another way to use the rule is to divide any percentage return into 72 to find how long it takes to
double your money. Example: At 8 percent, how long does it take to double your money? Easy: nine
years (72 divided by 8 = 9).

Tips of Investing

April 20, 2015 by vinaybysani

The actual P/E calculation is easy: Just divide the current price per share by earnings per share.
To quickly compare P/Es and growth rates, use the PEG ratio — the P/E (based on estimates for the current year) divided by the long-term growth rate. A company with a P/E of 36 and a growth rate of 20% has a PEG of 1.8.In general, you want a stock with a PEG that’s close to 1.0 (or lower), which means it is trading in line with its growth rate. But for a quality company, you can pay more.
Stocks are high priced in may and less during sept over year.
Sell in May, Buy in Sept