1970s Nifty Fifty were flying high - Indeed very high, take a look at the P/Es Disney's 76, McD 81, Polaroid 97. It doesnot matter forward or trailing, these PEs are ridiculously ridiculous!
"I learned a lesson thats been repeated many times over the years: When a large segment of the market gets overpriced and eventurally corrects, everybody gets nailed" Tech could still nail the rest of the market, Schiller PE being high!
"Market hers, like zebra hers, can't run for long without tiring. I never worry if I am early or late with some trend. Rather than chase the herd, we can wait until it comes back by us again" Dont chase!
In a quiet market after the initial annihilation, volume drops - Cats dont want to sit on a hot or a cold stove:)
At big companies dont talk, just read the transcripts, at small companies speak to the owners!
small good companies compound faster than big good companies
Railroads become docile as road network bloats eg. Penn railroad; Many years out to happen in India
"Dumbo could fly because he was a baby elephant, adult elephants don't drink redbull:)"
How can the stock price of a small company move up:
"I learned a lesson thats been repeated many times over the years: When a large segment of the market gets overpriced and eventurally corrects, everybody gets nailed" Tech could still nail the rest of the market, Schiller PE being high!
"Market hers, like zebra hers, can't run for long without tiring. I never worry if I am early or late with some trend. Rather than chase the herd, we can wait until it comes back by us again" Dont chase!
In a quiet market after the initial annihilation, volume drops - Cats dont want to sit on a hot or a cold stove:)
At big companies dont talk, just read the transcripts, at small companies speak to the owners!
small good companies compound faster than big good companies
Railroads become docile as road network bloats eg. Penn railroad; Many years out to happen in India
"Dumbo could fly because he was a baby elephant, adult elephants don't drink redbull:)"
How can the stock price of a small company move up:
- Earnings growth
- Acquisition - unlikely in the Indian context
- Repurchase - Duh!
- Revaluation - Big fish come to prey in the small pond!
"In our experience, there is no reason to worry about non-recognition: sound economic values of small companies get reflected in their stock prices sooner or later", Ben Graham infront of jury, Greenblatt in columbia and now Wagner - Its like the Petronas charm from Harry Porter, valuation always catches up with good companies (young or old)!
read Rolf Banz on Small cap stocks
The later stages of a bull market are like powerful witch coos in our ears, "There is no rick. The market will only go up. Initial public offerings are marvelous. Your stockbroker is your best friend. A limitless, effortless fortune awaits you." In the Narnia story, our heroes managed to fight off the enchantment at the last moment. The witch changed instantly into her true form, a great loathsome serpent. A prince, handily present - he had also been under her spell - kills her with his sword, and all live happily ever after. A bull market has the lulling allure of a lovely, soft-voiced woman, but it, too, can become a loathsome best in an instant. What should you do to foil the market witch in the real world? Once you become aware that you are under a spell, your first reaction is to flee and sell everything. But we know market timing doesn't work. A market may indeed be "overpriced," but it can stay overpriced for years. Bull markets come in all lengths. Your only defense against every sort of market jitters is to think like a long-term investor. If you stare the monster down with focus, patience, and a calm eye, you will be rewarded in the end.
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