I don’t believe quality companies are at a very high valuations. Many high quality private banks, FMCG and large cap IT stocks are either trading around, at or below their historical valuations. If there is overvaluation in any pocket, it’s in small or midcaps.

Plus looking at company’s valuation purely from P/E perspective is wrong as you will be missing out on a lot of quality businesses. There is a whole lot of other factors that influence valuations. Lots of people wrote off Trent, Divis Lab, Zomato in 2022 citing very high valuations and they have turned out to be multibaggers.

If you are new to investing then my recommendation is don’t take too many risks with your capital. One thing I have learnt from Mr Buffett, in hard way, is “Rule #1: Never lose money. Rule #2: Never forget rule #1.”.

Your chances of protecting your capital are higher in a decently diversified portfolio of quality stocks. Even if you get valuation wrong, you will still make money in long run on portfolio basis.

But you chase high return or alpha too early in average or inferior businesses with no long term visibility, risk of losing your capital is very high and painful.

Also keep in mind that in Bull Markets, all businesses look good. Management commentary is good, order book is strong, narrative is promising. Only when the tide turns we come to know who is swimming without clothes. And thing with stock market is that tide always turns. There is always a bear market after bull market. We just don’t know when.

Can anyone explain this transaction?

Why shareholders need to transfer unclaimed dividends and equity to IEPF?

d2d20ef5-a149-47a1-8daa-6e0e8a2e973d.pdf (2.1 MB)