China is no stranger to stock market bubbles

The on-going “excitement” about China and stock market bubbles has everyone in a tizzy. A little over a month ago, I was surprised to notice that the Shanghai composite index had doubled within a year! China Composite Index up 49% YTD. 1 year return of 136%! What’s behind the craziness? https://t.co/pPXQE28FKD — The Calm Investor (@CalmInvestor) June 1, 2015 Sure enough, Chinese stocks have corrected dramatically over the last few days, but one year returns still stand at close to 90%, compared to much more modest returns for the Nifty (India), S&P500 (U.S) and Dax (Germany) Zooming out five years,

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How to buy your first stock

Let’s say you recognize the corrosive nature of inflation, doff your hat to the marvel that is compounding and realize why equities are critical to wealth-building. Good going already. You’d now like to build your very own stock portfolio that you hope will grow your wealth manifold over the years. Fantastic! So, how do you find your first stock? Where to look One way is to flip through the pink papers or to CNBC to see what stocks the talking heads are eagerly touting as the next big thing. It is also probably the worst way. Reading the Financial Times to prepare for markets

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3 charts that sum up Indian equities in 2014

1. An “exuberant” 2014 Both key benchmark indices up by 30% December so far has seen the only significant correction in 2014 2. A “can’t go wrong” 2014 Every sub-index provided positive returns, some more than others with returns ranging between 10% and 70% Metals, Oil & Gas, IT, FMCG and Power under-performed the broader index Small caps, Consumer Durables, Mid caps, Auto & Capital Goods offered 50%+ returns 3. An “Expectations ahead of Earnings” 2014 Indian markets currently trade just above 21x earnings (For every ₹1 in earnings, you pay ₹21) Unless earnings show significant growth in the next quarter or two, historical data over 15 years suggests you’re more

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