50 stocks with solid earnings power: Ability to self-fund and create value

Here are 50 stocks with excellent earnings power track record. Based on Hewitt Heiserman Jr.’s Earnings Power Box, these companies have the potential to self-fund and create value. You can download a free tool to analyze any stock of your choice. This excellent compilation has been put together by Lokesh Verma based on Automated Stock Analysis with the Earnings Power Box.

Disclaimer: The data presented below is for informational purposes only and should not be construed as investment advice. Please do your own research before investing. Neither Lokesh Varma nor I will be responsible for your losses or gains. Please take some time to read and understand the Pros & Cons of Finding Stocks with Earnings Power for Long-Term Profits before proceeding further. read more

Want to time the market with Nifty PE? Learn from Franklin Dynamic PE Fund

Do you wish to time the market using Nifty PE ratio? Here are some lessons from Franklin India Dynamic PE Ratio Fund of funds – a mutual fund that has been timing the market with the NIfty PE for almost 15 years. Is it possible to reduce the risk in a portfolio and enhance its return at the same time? Many people naively believe that it is possible to do this by timing the market and the Nifty PE ratio is one such market timing tool. They say this is “intuition”, “common sense to buy low and sell high”. Well before you start dreaming based on that, have a look at some evidence. read more

How can a 400% profit result only in 8% return?! Hodling to the moon Risk!

Although many equity investors like to think that they are saner than crypto-investors, the truth is that there is not much difference in their investment “strategies” (if we can call it that). I am referring to “Hodl to the moon” which for equity investors roughly translates as “don’t sell in fear, equity will be profitable over the long term”. This is not a post about cryptocurrencies, in the sense that I will not be referring to them directly. This is a post about “holding risk” and about how time plays a crucial role in determining how profitable we are. read more

Should I expect lower returns from equity in future?

The re-introduction of equity LTCG tax offers not only a chance to clean up our portfolios, but also recognise an important fact: returns from equity may gradually decrease in the next decade or so. No, I am not talking about tax eating away our returns. There are two reasons for this, – one positive and one not so much. We will consider the positive reason in this post.

Yes, the equity LTCG tax (assuming it stays at 10% for a few years) will reduce returns by at least 1% as shown in this study: Equity LTCG Taxation: How much tax do I need to pay? Illustration part 1. So I will now expect 9% from equity (instead of 10%). As explained below, this also means fixed income returns will come down, to about 6-7% after LTCG tax. With that, let us get tax out of the way and consider some history. read more

Worried about 2% single day fall in indices? Be ready for more or leave!

On Feb 2nd the day after the budget, the Sensex fell by about 2%. If you this is a “big fall” or if you are worried, you only have two choices: get used to it and be ready for more or leave and head to fixed income. The following charts were published on Mar 11, 2015, after a similar 2% fall on Mar 9th, 2015. Nothing has changed!

Looking at investor reactions, I am now confident that if there is a sustained fall, most of them will not add more to equity. Good. Only the fittest survive. read more