is a well-managed company which has tremendous scope of GROWTH
necessarily a good company to invest?
lets take an example......
monsanto is a hi-technology company which is into research and production of
"super seeds" to feed "the billions" in future!
everyone knows its future potential.
everyone wanted to be on its bandwagon.
the result?
p/e ratio of 35 v/s 22 of peers!!!
meaning, people are already paying 35 times their share is earning?
meaning, people are just paying future price (35 times)!
people are simply betting on the bet!!!
---
nothing succeeds like success.
and nothing grows like growth.
people come to know about the growth
before the growth knows that its growing.
the rest of the act is completed by the operators.
result? unbelievably high price! poor bargain.
if you buy the dream, you have to wait for the morning
a decade away!
(no wonder monsanto india's share price shot to 2000/- in 2004, and is still there!
smart dumb people call it "consolidation")
lesson?
if its not a bargain
it is not worth it
even if it is a rocket!
No comments:
Post a Comment