Making money gets difficult
An index P/E of 23 implies that the market is already discounting EPS growth at 20% or more
A friend of mine, who is in the advisory business, was recently approached by a wealthy individual. That client had started trading in stocks around two years ago and lost about 60 per cent of the initial corpus.
This client wanted to recover the lost money within the next two years. My friend refused the assignment. As he pointed out, this amounted to wanting a 150 per cent return (absolute) on capital in two years and he wasn't confident he could deliver this! In further conversation, he did, however, mention that he thought he could deliver 150 per cent returns (absolute) over four ...
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First Published: Sun, August 28 2016. 22:24 IST