Opinion: Had Spoken with one fund manger and shocked / surprised to know how desperate that person in promoting and pushing construction and real estate companies.
More: We discussed about X company and I told him that book of this company is crooked but he replied no matter when there is bull market people dont see all these things and I am not going to marry this company..all these guys are momentum player just wanted to show good NAV…no point of long term wealth creation… I was shocked that these guys dont have fiduciary liabilities as they are managing public money. I was doing SIP in Equity Link Saving Scheme and today I made a request to stop my SIP. His thought was that we are not going to hold this always and trying to convincer me based on replacement value of that asset. I believe replacement theory is useless as we buy cash producing assets and if company dispose all assets then where will be future cash flow of the business. I believe that if company can not create value it make sense to liquidate assets and return to shareholder so that they can deploy the same momney where they can generate return higher than inflation. Business should not run from ego or emotions. It is investment process and if you can not generate high ROIC over cost of capital there is no point of doing a business.
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Shravan Paul: replacement value should always be taken in conjunction with other variables
Maulik Mistry: SIP = Systematic wealth Destruction Plan
Vivek Kumar Gujrati: shravan then you should buy MTNL, Maharastra scotter both r having huge asset replacement valued…Even SBI assets (land and building across india is more than current market cap of Bank) In long term market see cash generating asset of the business rather than replacement cost…. Harshad mehta has used this theory to fool investor so all oil marketing companies was quoting in 4 digit…till today investors has not seen that price….. Replacement theory work only when you have clear intention to sell those asset …
Jugal Mansharamani: Maulik Mistry sir..wats Ur take on the current market scenario…