January 04, 2012

Promoters - Investors - Valuations - Satyakam Mishra

Management cannot regulate market prices, although it can, by its disclosures and policies, encourage rational behavior by market participants. My own preference, as perhaps you’d guess, is for a market price that consistently approximates business value.

Given that association, all promoters prosper precisely as the business prospers during their period of ownership. Wild swings in market prices far above and below business value do not change the final gains for owners in aggregate; in the end, investor gains must equal business gains. Asian Paints, Colgate India, Bosch India etc are good examples.

But long periods of substantial undervaluation and/or overvaluation will cause the gains of the business to be inequitably distributed among various owners, with the investment result of any given promoters is largely depending upon how lucky, shrewd, or stupid he happens to be.

Satyakam Mishra



1 comment:

Vijay said...

I really appreciate the value in what Mishraji says. People here are consistent traders and rarely make money.

Really thoughtful of Mishraji to share his views.

But one thing I dont understand is why is he hiding his number and not sharing his number. He can really be a helpful to all of us.

Mr Ashwaniji, if you really know him, can the readers request you to persuade him to be in front.