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kenmac
#1 Posted : Sunday, February 21, 2010 9:46:08 AM
Rank: Elder

Joined: 5/26/2009
Posts: 1,793
>> What methods do you use to estimate the true value of a stock to know whethe its overvalued or undervalued in stock markets?....any resources on this subject are welcome.
......Ecclesiastes
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guru267
#2 Posted : Monday, February 22, 2010 9:15:25 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
@kenmac this is a very strange question to ask because there are so many ways of valuing stocks..
i would suggest a few ways for example P/E ratios, Net Asset Value.. but these valuation methods are supposed to be backed up with a lot of financial knowledge of the way markets operate...

so to you i can best suggest that you join a unit trust or talk to a broker extensively because if you play this game without the right knowledge.. you WILL get burned
Mark 12:29
Deuteronomy 4:16
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Gordon Gekko
#3 Posted : Monday, February 22, 2010 10:44:12 AM
Rank: Elder

Joined: 5/27/2008
Posts: 3,760
Tried, tested and proven. 1) Write down all listed companies on pieces of paper. 2)Place the pieces in a sufuria. 3) Decide the number of companies you want to buy into. 4) Pick as many pieces of paper from the sufuria as the number of companies you want to buy into. 5) Place order with your broker. There is no better method than that this.
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VituVingiSana
#4 Posted : Monday, February 22, 2010 10:45:25 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,346
Location: Nairobi
@GG - I prefer throwing darts... more entertaining...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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guru267
#5 Posted: : Monday, February 22, 2010 10:55:46 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
@gordon and @VVS...
y'all are "crazy"... Liar are you trying to get this guy roasted from head to toe on the NSE???
Mark 12:29
Deuteronomy 4:16
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Wa_ithaka
#6 Posted : Monday, February 22, 2010 11:23:27 AM
Rank: Veteran

Joined: 1/7/2010
Posts: 1,279
Location: nbi
Put a finger on it.
Failing that, get off your fat backside, do some research on company fundamentals, do your research on Kenya's economic prospects and then invest...
The Governor of Nyeri - 2017
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stock.enigma
#7 Posted : Monday, February 22, 2010 12:05:51 PM
Rank: Member

Joined: 8/14/2009
Posts: 244
@kenmak

The easiest way to start is to buy into a company which you admire a)what it does, or b)the CEO. try that this week and report your progress
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Chaka
#8 Posted : Monday, February 22, 2010 12:21:55 PM
Rank: Elder

Joined: 2/16/2007
Posts: 2,114
@Kenmac,
This is what I do whenever I have spare cash:
Buy shares in companies manufacturing products or providing services that you use i.e if you love beer then have some EABL,If you love tea go Mumias,If you like talking on your mobile and you are on Safcom get some Safcom as well,since you cannot do without power get some Kengen and KPLC....but I do this for the long term
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RichVee
#9 Posted : Monday, February 22, 2010 1:13:35 PM
Rank: Member

Joined: 1/26/2010
Posts: 124
As a beginner, I found these recources (see below) helpful. Not specifically to tell whether a stock is overvalued or undervalued, but nevertheless very useful in getting a clearer understanding.

From what I have read so far, if there was anyone that knew exactly how to tell, there would be nothing left for the rest of us ordinary folk to buy. So do yourself a favor and do some research, learn about the companies that are listed, study the historical trends then go by what your (informed) gut feel directs.

http://www.investmentguide.co.uk/shares1.htm
http://www.wisegeek.com/...-when-buying-stocks.htm


Tired of mediocrity. Am going to the very top!
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Njung'e
#10 Posted : Monday, February 22, 2010 2:15:21 PM
Rank: Elder

Joined: 2/7/2007
Posts: 11,935
Location: Nairobi
@Wa-ithaka,
Long before anything,you do some reading about stocks.Much of this information is available on the internet.....thereafter,you can research....and for heaven's sake,don't put your money on a microscope or two...lol
Nothing great was ever achieved without enthusiasm.
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