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#TweetStorm - Expensive or deserves to be Expensive ? 1)One thumb rule for screening expensive companies is Market Cap to Sales or Enterprise Value to Sales. A 10x or more is generally expensive unless the company can grow sales rapidly or has extremely high Net Profit Margins.
2)Another way to look at expensive is if the Market Cap is equal to the Total Sales of the Addressable Market Size. This would lead to company having to launch different products in the future.
3)May not be the approach to take a Sell Decision or a Short Sell Decision. Very few companies can command such high valuations. Thumb Rule is just to review the investment thesis and the quality of the business. If doubts on quality , get out.
Read 9 tweets
Nifty down over 1% again. Small cap Index just made a new 52w low. But I'm not losing sleep over it as my system of trading only 52w high stocks & strict risk management got me out of this mess way before.

Sitting on 90% cash & making a list of leaders of the next bull market.
A leader does not necessarily mean some familiar BIG name like Reliance or the likes of it.

Find the next big thing growing at an exponential rate studying its price action alone.

How to make a list of the next probable leaders. Read on:

Mar'15 to Feb'16
Nifty down 23%
SmallCap down 23%

Nifty made a low of 6825 on 29th Feb 2016 & then never looked back. So, let's study stocks which were trading around their 50dma 2 months before this bottom was made.
Read 23 tweets

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