NEW DELHI: Information is key to winning in value investing, says Stephen Penman, an authority in value investing. The professor of security analysis at Columbia University says getting enough information to understand a business and how that is going to translate into a financial statement is key. Information reduces uncertainty and risk in investing. Hence, the crux is to get information. The target of the information and value investing is to discover a price that is different from value, Penman said in a interview with ETNow. “As Benjamin Graham said: price is what you pay and value is what you get. This is active investing, which is different from buying a passive index fund, where you buy a basket of curious stocks and you are exposed to the risk in those stocks,” he said. The concept of value investing was first introduced by Benjamin Graham and David Dodd in 1920s. Penman said information can help investors steer away from value traps. “You get caught in … [Read more...] about Information is key to success in value investing: Stephen Penman
International value index fund
I am 27 years old. I started my job (and SIP) when I was around 25 years old. Initially, my SIP was of Rs 5,000, later I increased it to Rs 10,000, and finally to Rs 15,000. Right now my total investment is around Rs 3 lakh. My SIPs are in these funds:HDFC Mid-Cap Opportunities Fund: Rs 3,000ICICI Prudential Bluechip Fund: Rs 3,000ICICI Prudential Sensex Index Fund: Rs 3,000Kotak Standard Multicap Fund: Rs 4,000I have a high risk tolerance as I won’t need large cash for at least next two to three years. I want to create a good retirement corpus and some intermediate cash for other life goals like house/car/holidays/kid's education etc. Kindly suggest--Bishvdeep First, you should invest in equity mutual funds only if you have an investment horizon of five to seven years. Two, your risk profile is different from your investment horizon. You don’t have a high risk appetite just because you don’t need the money for two or three years. Your risk profile is about your … [Read more...] about Are these mutual funds enough to take care of my retirement, car, house, etc?
Growth in the stock market will be underpinned by steadily improving macroeconomic indicators this year and the next, allowing the VN-Index to hit 1,085 points by the end of 2020, VietinBank Securities said in its market prospects report released Thursday. Public debt this year is expected to fall slightly from 58.4 percent of GDP last year to 58.3 percent this year, and another 0.5 percentage points in 2020. Inflation is likely to remain at 3.5 percent in 2019, the same level as the prior two years, and could fall to 3.2 percent in 2020, the report said. However, average earnings per share (P/E) for stocks on the Ho Chi Minh Stock Exchange (HoSE), which the VN-Index represents, is expected to grow much more slowly by year-end compared to last year. The current P/E on HoSE is 16.7 percent. This figure by 2019-end is projected to grow around 10.5 percent compared to the beginning of the year, down from 26.5 percent in 2018, according to VietinBank Securities. According to VietinBank … [Read more...] about VN-Index predicted to rise 14.6 pct this year
When almost everyone wants to buy certain stocks in the markets, it is obvious that the rest of the spaces tend to become more value and if you are seeking value, then you become a contra investor. says Prashant Jain, ED & CIO, HDFC AMC. Excerpts from an interview with Nikunj Dalmia of ETNOW. It is often said in the market that investing is very easy, it is common sense and a little bit of patience. So if investing is so simple. how come you do not have too many billionaires on the street? How come there is only one Prashant Jain?I think I am not the only one, there are quite a few who have done very well in the markets, may not be in a mutual fund format for 25 years but there are quite a few of them. But yes, equities are a very simple asset class but as it is said, what is simple is not always easy. I think to do well in equities we need right understanding which can be very easy for some and can be very challenging for others. Apart from right understanding we need lots of … [Read more...] about Why playing contra means value investing for Prashant Jain
Fund managers have been advising investors not to keep their return expectation higherIllustration: Uttam Ghosh/Rediff.com India’s popular equity mutual fund (MF) schemes are increasingly coming under pressure when it comes to benchmark-beating returns for investors. With the benchmark indices soaring 20 per cent this year, few actively managed schemes have managed such a return. Those that have include HDFC Equity and HDFC Top 200, both managed by Prashant Jain, chief investment officer of HDFC MF. The margin of outperformance is, however, only 50 basis points.Fund managers have over the past year been advising investors not to keep their return expectation higher. Further, on several occasions, they stressed the fact that the phase of generating very high alpha (outperformance over the benchmark index) could be over. Mahesh Patil, co-chief investment officer (equity) at Birla Sun Life MF, says the past three years have been quite good from the schemes' outperformance point of … [Read more...] about Fund managers struggle to beat red-hot market