India to Borrow and Spend More in 2010-2011

[Mahakaya]

The market cap has nothing to do with book value. If it did, there wouldn't be such wide spreads in PE ratios in different markets at different times.

Sorry! whats your point - that is absurd!

Book value when measured alongside market capitalization gives the true worth that has been added by the Company's management.

As for the Relation:

P/B = P/E X E/B (ROE)

Any more nonsense you want to debate upon?

 

[Mahakaya]

Large, stable markets usually have less growth than small, growing markets.

Which is what I meant - please re -read my post - The point remains you have a lot of catching up to do!

 

[Chiru]

Read my post properly !!!

The book value is the actual asset valuation. So do you think that is a good metrics ? The market cap of a company is proportional to its Book Value.

Let us forget market cap for now. Can we compare on book value ?

There is quote from member. I forgot his name.

Never argue with an Idiot, they will bring down to their level and beat with their experience.

 

[RiazHaq]

OK, Lets us agree that the figures you have presented are right. Both look pathetic to say the least.

I agree, both India and Pakistan have a lot of catching up to do, while not leaving the poorest of the poor behind.

 

[RiazHaq]

Sorry! whats your point - that is absurd!

Book value when measured alongside market capitalization gives the true worth that has been added by the Company's management.

As for the Relation:

P/B = P/E X E/B (ROE)

Any more nonsense you want to debate upon?

It's clear you haven't heard about Warren Buffett and his valuation methods.

 

[Chiru]

I agree, both India and Pakistan have a lot of catching up to do, while not leaving the poorest of the poor behind.

Who cares you if you agree or not. We want you to stop India bashing.

 

[Chiru]

It's clear you haven't heard about Warren Buffett and his valuation methods.

Warren buffet will not touch KSE market even with 120 meter pole.

 

[ramu]

It's clear you haven't heard about Warren Buffett and his valuation methods.

OK I take it as a yes that we can compare companies on book value since you did not respond to that.


So why is the combined worth of KSE a fraction of the top performers in BSE ?

 

[RiazHaq]

There is high chance of loosing shirt also.

That's true of any market. Just ask the people who got burned in the dot com bubble or the more recent real estate bubble which caused market crashes in the US. And the US markets have not recovered to the 2000 level.

 

[ramu]

Who cares you if you agree or not. We want you to stop India bashing.

Chiru, chill dude... let him blog his heart out. Freedom of sppech is a fundamental right in India.

 

[Chiru]

That's true of any market. Just ask the people who got burned in the dot com bubble or the more recent real estate bubble which caused market crashes in the US. And the US markets have not recovered to the 2000 level.

If KSE has so much potential why there is no single ETF or mutual fund pakistan specific. How come so many people in wall street missing this opportunities.

 

[RiazHaq]

OK I take it as a yes that we can compare companies on book value since you did not respond to that.


So why is the combined worth of KSE a fraction of the top performers in BSE ?

Because the top performers in Mumbai have highly inflated valuations....a result of the extraordinary hype. The real question is whether or how long they can sustain such lofty valuations.

The higher these stocks go, the steeper their fall could be.

 

[Mahakaya]

It's clear you haven't heard about Warren Buffett and his valuation methods.

Please Enlighten me so that I can correct any flaw in logic that you derived from it!

Book Value is the true asset value i.e. the money invested

Efficient utilization of the Book Value leads to Higher EVA (Economic Value Added) which is reflected in the M/B or P/B ratio. The P/B ratio is affected by the RoE and the P/E ratio i.e. earns and turns.

Ever heard of the SGR or the Sustained Growth Rate concept - It is calculated as RoE X B i.e. Earns multiplied by the Retention ratio. In the context of India it may be spending more in terms of the budget but then again the FDI fills in the GAP i.e. the a concept of retention in this case which means higher growth going forward.

A large economic base is a must to sustain SGR and in Pakistan's context it is achievable to only a certain extent given both it is a small nation and has lesser population as compared to India. The growth expectations on this basis are much higher in India than in Pakistan!

Simple logic >>>> Comprende?

 

[karan.1970]

On CAGR, your choice of periods in arbitrary to suit your point.

No they are not.. They are trailing returns for 1 yr, 2yr, 3yr, 5yr, and 10 yr from the present day. You know Templeton uses them too . The choice of your periods however is carefully selected..

On PPP figures, the most recent and detailed real per capita income data was calculated and reported by Asian Development Bank based on a detailed study of a list of around 800 household and nonhousehold products in 2005 and early 2006 to compare real purchasing power for ADB's trans-national income comparison program (ICP).


http://www.adb.org/Documents/Reports/ICP-Purchasing-Power-Expenditures/Highlights.pdf

You are quoting from a 2005 report.. 5 years old..

List of countries by GDP (PPP) per capita - Wikipedia, the free encyclopedia

From the link you have posted

2009 PPP India $ 3100
2009 PPP Pak $ 2600

 

[RiazHaq]

Please Enlighten me so that I can correct any flaw in logic that you derived from it!

Book Value is the true asset value i.e. the money invested

Efficient utilization of the Book Value leads to Higher EVA (Economic Value Added) which is reflected in the M/B or P/B ratio. The P/B ratio is affected by the RoE and the P/E ratio i.e. earns and turns.

Ever heard of the SGR or the Sustained Growth Rate concept - It is calculated as RoE X B i.e. Earns multiplied by the Retention ratio. In the context of India it may be spending more in terms of the budget but then again the FDI fills in the GAP i.e. the a concept of retention in this case which means higher growth going forward.

A large economic base is a must to sustain SGR and in Pakistan's context it is achievable to only a certain extent given both it is a small nation and has lesser population as compared to India. The growth expectations on this basis is much higher in India than in Pakistan!

Simple logic >>>> Comprende?

The best valuation method is the conservatively discounted future cash flow method that requires a deep dive in the books to avoid a Satyam. That's what Buffet does.