How to BUY undervalued stocks? [simple strategies] #STOCK MARKET INVESTING FOR BEGINNERS

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Back in 2010, Nestle was trading at a PE of roughly 50. That might ring an alarm bell for any investor who has heard that you should not invest in stocks whose PE is greater than 50.

But how far is that true?

In this video, I explain the reality behind PE and whether you should consider it before making your investments

Watch this video till the end to have a holistic understanding

0:00 Intro
02:12 What is PE ratio?
06:50 IS PE ratio pointless?
10:11 What should we do?
11:50 Industries where PE expansion might happen
13:40 Industries where PE contraction might happen

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Attributions:
Stock videos from Pixabay and Pexels
Logos: Wikipedia Commons

Video Editor and Thumbnail: Ayushman Khare

[noelakkara]

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[abhikshatriya]

Keep making these kind of video.After seeing many videos (almost all), It just change my entire thinking to see the market. Thanks....

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[yaminisulochana]

Thank you for clarifying on PE ratio. There was a lot of confusion when I wanted to decide on growth stocks and the conventional 'stick to PE' idea. Great videos.

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[vijaybhosale]

Very impresive communication skill really! ie.what d questions will come in audience mind they are already answered . - Thanks .

[bobbygunz]

If the stock market breaks out and goes higher, do you think BTC could break all time highs as well?

[dhananjaymalhotra]

Sir I am aiming to inculcate your discipline and consistency (with a rational mindset) in myself. Almost one video everyday asks for a lot that too from someone like you who is a father, entrepreneur, author etc. It is commendable how you take out so much time to research and make videos on a regular basis among plethora of other things that you are involved into. Respect.

[aijazdardar]

Dear friend i have been watching the videos of many experts of stock market but the way you explain the concept is un parallel. My best wishes

[vijaynagre]

Dhanyavad sir, in simple n better way of importance to understand.

[laportafrank]

I find myself at a crossroads, uncertain whether to liquidate my $150, 000 stock portfolio. I'm seeking advice on the best strategy to capitalize on this current market.

[prashanthg]

Another way to look at PE ratio is that if a company's earning potential do not increase or decrease, then it would take an investor the PE amount of years to double their money. For example a company with PE of 90 means one is ready to wait for 90 years to earn a profit equal to the invested amount (assuming there is no increase in the company's earnings over these years). So the entire point of buying a stock at a higher PE comes down to ones understanding of the growth prospects of the company.

While PE ratio alone may not be enough to make good decisions, one must find the value of a company and have a thesis as to the future prospects of the company before buying a stock. Buying stocks below their intrinsic value protects investors from losing money in case of unfavorable conditions and having a strong thesis gives one the ability to predict where the stock could be in a few years. Thesis also helps one make sound decisions of hold, sell or buy more at any point in time. Buying a high PE stock backed by good thesis simply means that one is ready to wait longer for the growth prospects to manifest itself.

[ronjoymajumder]

Very well explained. thanks a lot . as a beginner I took a lot of time to understand what is the PE ratio why shouldn't I buy low pe ratio and these things now I do understand them better. but if I had this videos one and half years back in much easier for me . so for the new once it will be very helpful, with proper example and explaining. Grt job

[umeshsidhaye]

Great video..
One example of a stock which has been trading at irrational PE is IRCTC

[sylviafernandes]

Akshat you are so right...I recall looking at Nestlé shares when they were trading at 3000 and U thought it was inflated. Them finally in 2018 I bought 10 shared of Nestlé at 11000. I never imagined it would rise so high. But that's the extent to which growth stocks rise.

[abilashsethumadhavan]

very practical approach in buying stocks based on PE. Thanks a lot, Akshat !!!

[shibasahoo]

Namaskar Sir
Great video sir & your explanation quality is unexpressible... Plz 🙏 continue Sir.

[pradeeppaluri]

Very nice video akshat.
U talk more about nestle and hul all the time. Try to take other companies as examples.