Select Your Language

Getting rid of greed and fear while trading

It’s just too difficult for the investor to be right always because there are always these nagging set of numbers and ratios before they draw a concrete decisive conclusion and to top it its the confusion created by the towering claims by the advisory firms of sure shot call, jackpot call, premium calls bumper call and the grandest claims are the 80% to 100% accuracy calls. And the investor wades away through the whirlpool of various sets of numbers and ratios only adding to his confusion.


How so ever here VPS advisory stands apart because we work on the research and we have a strong base because of it. We say that only two parameters helps the investors that is return on capital employed (RoCE) and return on equity(RoE).Because these are the two prime decisive factors on which if the company is sound than hundred percent those companies command premium valuations. As these two measures clearly reflect how much is the profitability of the company in terms of the investments made in it and also how efficiently those companies are using its resources .

Actually the RoCE measures the profitability against the entire capital  that is the debt and the equity invested in the business where as on the other hand the RoE measures the return to the equity share holders .So these two parameters take both things into account that companies capital structure as well as the operating performance and so are more comprehensive .Also what we take into consideration is that companies past performances, promises, overheads ,outstanding and break even points usually any company worth is more than 1500 crore only indicates that it has a very sound management and vision of the company ,keeping into the account the lot size, price ,open interest, premium, sellers ,buyers, open price ,closing prices ,highs and lows ,spread ,volume and various technical parameters ,candle stick chart ,moving averages. direction etc.


The return ratio averages basically is suggestive of how much is the company is earning on the investments made by it in the business and if these ratios and valuation ratios such as price to earnings and price to book value is consistent .Obviously any company with a high return ratio will get a higher valuation and conversely if a company with low return ratio will get a jaded red underline lower valuation .Roughly generally speaking we say that a company with a 20%  plus return ratios can comfortably get around 15 times P/E  valuation subject to the other numbers and parameters aligned altogether .moreover identifying of bse  500 companies if they are trading at the relatively lower valuations against their competitors in spite of have same or better RoCE and RoE ,so after analyzing all these factors we identify exact cause of there under performance and thus make the decision to give advice to the investors for the investment decision .

Timely identifying and targeting which small cap will become midcap and move on to become a largecap is the key to become a successful advisor and investor in the long term where the association with the clients are life long ,new clients pouring in and retaining the old clients in a healthy prosperous mutual business relationship .