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Financial Markets are imperfect accompanied by speculations, how share price reflects true market value of a company?

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Question added by Mukhtar Nawaz Virk , Accounts Officer , Akzo Nobel Pakistan Limited (Formerly ICI Paints)
Date Posted: 2014/05/18

In part you are right, the markets are not perfect at all but companies whose shares are currently worth a lot are no longer so viable the digital resources that have gained more impact are those of cryptocurrencies. I am currently using this site at https://www.kaigaifxforex.com/ so the information that I share is part of the page that I am occupying.

KUSHAL DAS
by KUSHAL DAS , Advisory Executive - Equity & Derivative (HNI & CORPORATE) , Achivers Consultancy Services

Trading psychology says that don't take a investment decision in greed or fear. In this case your greed followed by fear of loosing money in the capital market.

Your decision to invest money in  the financial market leads to a huge loss by error-ding up of 2/3 or more of your capital. Taking investment decision depend on the advise from other is generally reflects often a dangerous situation. Your dream to become a millionaire in short time frame leads to your ruin. Oniy in long run all the speculation get neutralised. 

So follow technical Analysis or fundamental Analysis invest in the large caps with good management and governing body for a long time that will eliminate any type of speculation. You will have great returns.

By means of Fundamental Analysis we calculate the Intrinsic value of the shares . If the Intrinsic value of the shares say 15% higher  than the Current Market Price we will take a investment decision to invest say for upcoming 12 to 18 months. 

In an alternative case if the Intrinsic value is lower  by 10% of the CMP we will have to wait for the price to reduce or looking for other opportunities. In a Bull market the price will not come down, in that case one need to trade with a strict stop loss say 2-3%.

 

Chirag  Singhvi
by Chirag Singhvi , Head Of Operations & Business Devlopment Manager , KIFS Securities Ltd

Financial markets are accompanied by speculations as well as on the basis of valuation model .

 

true market value is derived by market capitalization divided by number of shares that will derive the market price of the company

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