What if I tell you that this was a click bait…and the article is about Essar?

Well, let me tell you. I look at my portfolio – Nestle, Colgate, Hul, Siemens, Hdfc, Hdfc amc, Hdfc life insurance, Hdb financial (to be listed), JSW, Titan, Gillette, PnG, Cholamandalam, Coromandel International, …………and I KNOW that it is over-valued. I know it is over-valued. Hence the repetition. It is not an alien concept.

Then I look at the other options that I have missed. Nagarjuna fertilisers, Fact, Deepak fertilisers,….again a long list. Then of course there are shares that I have missed like GMR, GVK, Avanti Feeds, United Group, Mangalore Fertilisers, Srei, Iifl,….the list is endless.

When I get such “tips” I surely go and have a look at it. Then I look at my portfolio and feel “If the best is already there in my portfolio”. I just go and buy more of these shares which I own ALREADY. Why should I buy more? Does it make sense?

Now you come to promoters like Ruia, and such other promoters. Bhushan, a few sardars whom I do not want to name. Silverline, Shaan Interwell,….a huge, huge list of promoters who do not even pay the institutions from whom they have borrowed. Then you realize how they fight Arcelor Mittal to fight for control for a company which makes HUGE LOSSES. Surprising? or Shocking.

Then you look at Hdfc. Cholamandalam. Sundaram. They have a choice of how much profits to “show” – like the  Ruias. However, they decide to pay all the loans. They pay all their taxes. They reward their partners – Standard life. They then reward their smallest shareholders. Like me. I have never attended any meeting of the company. Since 1980 till 2019, I have been rewarded as a shareholder. So I will not sell.

Now multiply my attitude with 10,000 others. We will not sell. This is called respect. This is another way why a PE of a company is high. Ditto for Institutional Holders. All of us like certainty, predictability, and reputation

Hence he high PE for shares like Hdfc. Then the goodwill spreads to all the other companies of the group – bank, asset management, life insurance, ….and hence these shares are worth buying.

Caveat: as said earlier I have been a shareholder since 1980. I have a high risk tolerance. You make your choice.