Originally posted by rapidriser Originally posted by basant My 2000 losses really taught me that taking a capital loss as large as 50%+ is also a part of the game as making a 35 bagger. In this case I see reason why a trader should be distinguished with an investor a trader takes a loss if prices move against him an investor takes a loss if fundamentals move against him.     People who claim to be "long term investors" should have this statement pasted on their wall in bold. Too many of us hang on to stocks even when it is clear that the premise on which we invested in a stock no longer holds true. What Basant ji learnt in 2000, I have learnt in 2008, and I've paid heavy tution fees for this lesson.

Good said Basant Sir

Even I have also paid heavy tuition fees in 2008. Hence Blowing the Buttermilk... There is no doubt you had a wonderful ride on PRIL. People may label it as trading. But We are here to earn money & capital preservation. How you do it it is part of your game plan.

Point is whether there was really a boom for Retail or it was just a bubble. and how to keep away from such booms & bubbles when it is on its peak.

Vijay is saying HDFC is his favorite. but does HDFC bank know that Vijay M is favoring it? No stock will perform 30% because someone is expecting it to perform. if i invest my life's savings in HDFC because i believe in it and it will perform at 30%, and in reality it fails to give you that return. Am i going to management of HDFC and saying boss i was expecting you to perform and you didn't, give me my money back. Will this make sense.

Then what is left in our hands? Buffet says, Understand the business first. then Company (managment) then buy the company at such a price where mediocre business will fetch you your price.

Sir,

Could you please guide me how to find the discussion on a Particular Share in the TED Forum ?

Thanks,

Hi all,

Edited by kanaka_basi - 18/Feb/2009 at 3:01am

Originally posted by kanaka_basi Hi all,   How do you find the intrinsic value of stocks? using DCF? If yes, what value you use for the discounting rate?   I use the G-sec yield rate..... When i did this exercise the G-sec returns were 6.75% ... Any idea what it is currrently now?   And where would the current rates be available?   Is using the G-sec yield rate a correct measure? Moreover after doing this exercise, I add in a confidence/ reliability measure to the value and then compare it with the current price.   Thanks Srini   PS: Any suggestions about how wrong/ right this method is??

Discount rate is what your Internal Rate of Return. Lesser the discount rate higher the Intrinsic value.

For Example
My calculation of Thermax with 8.5% growth rate & 12.5% Discount rate for 10 years, that gives me Intrinsic value Rs 320. So i will buy it at 50% margin Rs 160.

But if you assume growth rate 30%, Discount rate of 6.75% then it would give me horrible intrinsic value of Rs 1600, means i should buy it at 800. Since CMP is much lower than 800, i will definitely buy Thermax. Which i think is not correct. I always remain conservative, try to bring down bargain price so that i would get good company at lowest possible value.

Some of my calculation about L&T gives me buy price of 350, Asian paints 285, RIL 400 & so on.. so i will wait for those prices



Edited by 9StockPortfolio - 18/Feb/2009 at 8:12am