In the world of fat financial books, there is one called "the little book that beats the market" which is really little, only 155 pages worth of reading. Although the large part of the book is dedicated towards proving how good the strategy described in the book is, the strategy is worth giving a try. It is simple. It says:
"buying good business at bargain prizes"
To find good business, it uses return on capital [EBIT/(net working capital+net fixed assets)].
To find bargain prizes, the formula uses earnings yield (EBIT/Entrerprise value)
Note: The reason for not using return on asset or return on equity instead of return on capital and PE instead of earnings yields is well described in the book and the given example proves it well.
The strategy is to sort companies (preferably in a spreadsheet) based on the above ratios and get those companies with the best combination of above.
It really is a good strategy to get a list of promising companies which have been ignored by the market. One can keep an on them and as soon as they start getting interest technically, pick them up.
Now the problem.. Where the hell do you get those 2 fundamental data of 1200 odd companies listed on nse in a spreadsheet or list format which one can sort in ascending/descending order. Fundamental data is available in www.economictimes.com, but one needs to copy and paste that data into a spreadsheet one by one and that even for 1200 copanies listed in nse is quite tiring leave alone 3000 bse companies. Also, one needs to do that quarter after quarter as the results are decleared.
Another place is research section of www.icicidirect.com. Here one can get data in list format, but you wont get data about return on capital or earnings yield mentioned above. Also, I doubt whether all the listed companies are included.
Can anyone suggest other good sources of fundamental data or other solutions of fundamental data.
Thanks for having the patience of reading such a lengthy post and your coments are always appreciated.
Regards
Ravi S Ghosh
PS: Please dont ask where to get the above book from. Search the forum and you would get many links.
"buying good business at bargain prizes"
To find good business, it uses return on capital [EBIT/(net working capital+net fixed assets)].
To find bargain prizes, the formula uses earnings yield (EBIT/Entrerprise value)
Note: The reason for not using return on asset or return on equity instead of return on capital and PE instead of earnings yields is well described in the book and the given example proves it well.
The strategy is to sort companies (preferably in a spreadsheet) based on the above ratios and get those companies with the best combination of above.
It really is a good strategy to get a list of promising companies which have been ignored by the market. One can keep an on them and as soon as they start getting interest technically, pick them up.
Now the problem.. Where the hell do you get those 2 fundamental data of 1200 odd companies listed on nse in a spreadsheet or list format which one can sort in ascending/descending order. Fundamental data is available in www.economictimes.com, but one needs to copy and paste that data into a spreadsheet one by one and that even for 1200 copanies listed in nse is quite tiring leave alone 3000 bse companies. Also, one needs to do that quarter after quarter as the results are decleared.
Another place is research section of www.icicidirect.com. Here one can get data in list format, but you wont get data about return on capital or earnings yield mentioned above. Also, I doubt whether all the listed companies are included.
Can anyone suggest other good sources of fundamental data or other solutions of fundamental data.
Thanks for having the patience of reading such a lengthy post and your coments are always appreciated.
Regards
Ravi S Ghosh
PS: Please dont ask where to get the above book from. Search the forum and you would get many links.
