Summary
Contents
Welcome to the mysterious world of equity market, which is not so mysterious after all! Most investors get it wrong when it comes to understanding the nuances of the equity market. It is not because they are ignorant or lack the requisite skills to understand the factors affecting this market, but mainly because they get misleading information from market players and financial intermediaries. Consequently, these entities thrive and flourish, leaving the investor wringing his hands, wondering where all the money has gone. No more lies! This book is your window to the equity market from a completely different perspective and earn your fair share of stock market return.
Measuring the Beast: Worth of a Stock
Measuring the Beast: Worth of a Stock
Having understood the basic premise of investment and its four dimensions, let us now see how stock derives its value and how we can measure the return from a stock or a portfolio of stocks.
The Beast: Predicting the Return
For centuries, economists and finance professors have struggled to come up with some magic formula which would help them model the movement of stock price and, in turn, predict its return. But you would say how one can predict the return when it lies in the future. True. No one can predict the future. But when there lies the money, people tend to do all sort of things to gain control over it. ...