the real fundamentals - I

does high p/e ratio indicate good future? shaky future?

does high book to price ratio indicate bright future? dark future?

does high debt on the balancesheet indicate prosperity in future? bleak future?

......?????

well, it can be both!!!

one of the biggest myths of fundamental analyses is

"if u know the numbers and ratios, you can know the fundamentals of a company!"

i can show you n number of examples
when despite a bad set of numbers, a company gave 1000% returns in less than 2 years!

don't believe me?

just take out tata motors chart

share value on 20/2/2009 = 134

share value on 15/12/2009=1340

every ratio in the encyclopaedia of fundamental analyses (FA) was as red as it could have been.

still, it turned out to be as golden as it can be!!!

so, what is real FA?

what does it mean?

what all includes the real FA? what to look for???????