Benjamin Graham, author of Intelligent Investor, defines an investment activity as one, which upon thorough analysis promises safety of the principle invested as well as an adequate return on that investment...

A basic assumption made here is that you did not become a shareholder to a company by chance but by an intelligent investment decision.

If that is the case, then basic ability to understand and interpret financial reports is of paramount significance to your success as an investor in the stock market...
:-)

[quote=guru267][quote=mukiha]SO, what values of these ratios does the NSE "consider cheap"?[/quote]

@mukiha we all know how inefficient the NSE operates because of the serious lack of flow of information and very narrow choice of stock so its hard to gauge what the NSE calls cheap or expensive....[/quote]
What do you mean by "how inefficient the NSE operates because of the serious lack of flow of information"

Aren't the listed companies required to release financial information on a strict frequency and by strict deadlines? And then the info is published by NSE immediately?

Where does the "lack of flow of info" come in?

[quote=mukiha]Financial statements are about the past, not the future. How does one assess the future?[/quote]


no one can..you just trust the management's keeps on doing a gud job..plus benefit of momentum of company's performance into the future...

common sense carries the day as the best measure of value investing.Too much figures and studies will make u underperform,just buy sensibly and avoid paying too much and buying hype stocks.Remember to buy in fluctuations and practise margin of safety(diversification) as ben graham said.Utashangaa what type of analysis people talk of coz u will outperform them.

my two cendis

[quote=guru267][quote=mukiha]Where does the "lack of flow of info" come in?[/quote]

i mean lack of flow where mostly only people in Nairobi can afford to acces this information you are talking about and the more than half who have access to the information can't interpret it... hence most investing is done on an emotional basis or love for a certain company or simply rumours....

[/quote]
If the information is available at NSE, then it is available at brokers' offices. It is also published in the national press [readership approx 3m].

To buy shares, one needs to go to the broker, many have the info in the waiting rooms, so the is no excuse of lack of info.

Regarding inability to interpret the info; what can the NSE do to educate prospective investors?