Emotion of greed was absolutely prevalent. I also was experiencing it.
I will narrate an example. During the last few years there’s only one IPO, I had subscribed to. A government company with zero NPAs, very decent growth coming at 0.8-0.9 P/B. I put in a big application. Got full allotment. Stock listed at discount. And went down 30% from there. Results declared were good. At a point it came to 0.6 book and sustainable+growing dividend yield of 7%. I did add during these falls and it became a decent sized bet for me. IPO was at 26 Rs and went down to 18 levels. Dividend for last year was 1.40 Rs. My expectation was a dividend and at some point maybe a 40-50% appreciation.
Somehow this stock got fancy and has gone all the way to 90+. P/B upwards of 2.5 and div yield less than 2%. The stock gave me 2.5X, much more than I deserved and expected.
“Bhaav Bhagwaan Che” is the stupidest thing in my view. At both ends the pricing was absolutely wrong. There is no such thing as efficient markets.
Example like these, and there are many more, tells me about the euphoria in the markets. And markets were ripe for a correction. Reasons will be attributed now. But the real reason, is huge pockets of overvaluations.
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