馃攳
Stock Market Classes with Pranjal Kamra - Lesson 1 | Stock Market Basics for Beginners in Hindi - YouTube
Channel: pranjal kamra
[0]
Hello friends
[2]
Welcome to Curfew Classes with Pranjal.
[4]
Most of you wanted that
[7]
that I teach you fundamental analysis, practically on screen.
[11]
That's why I'm very excited today.
[13]
Because today I will practically
[15]
with the help of screen recording
[17]
will teach you, how I do fundamental analysis
[19]
and how can you go to ticker.finology.in
[23]
ticker is our new stock analysis tool
[25]
which is for you, so you can visit ticker.finology.in
[29]
and analyse stocks, just like me.
[46]
Now keep in mind one thing
[48]
that a new video will come in every 20 days
[50]
and the videos will be simple at first.
[53]
But as the day passes and you start learning
[56]
then the videos will get a little complex
[58]
and after 20 days, I believe that
[60]
you can pretty much analyze stocks by yourself.
[64]
So as it's the first day,
so we are starting with a simple company
[68]
Whose products you may use every day in your lives.
[73]
Hindustan Unilever Limited
[75]
Now I you tell you very simple terms
[78]
that how a FMCG company
[81]
FMCG means, "Fast-Moving Consumer Goods".
[84]
These companies makes everyday useful items
[87]
like Sope, Shampoo, Detergent, stuff like that.
[90]
And Hindustan Unilever is India's biggest FMCG company.
[95]
As it's the first day, so I will start with the basics
[99]
so anyone, who doesn't know about investing
[102]
can also learn investing with the help of these videos.
[105]
Now we will start in the order as the data is given.
[109]
First let's talk about, "Market Cap".
[112]
So what is market cap?
[114]
See it's very simple.
[116]
If you want to fully buy a company
[119]
which is becoming 100% owner of that company
[123]
then how much money you'll have to give.
[125]
That what market cap tells us.
[128]
In Hindustan Unilever's case, it's around Rs-4.5 lakh crore
[134]
little less than Rs-5 lakh crore, to buy the entirety of Hindustan Unilever.
[140]
Rs-4.5 lakh crore, which is among India's biggest companies.
[145]
So that's market cap.
[148]
How market cap turns out?
[150]
It's simple to get market capitalization out
[152]
you just have to get one thing.
[154]
You have to find the shares price
[157]
like when recording this video, the share price is Rs-2190
[163]
you have to take that and multiply it by the number of shares.
[168]
So now Hindustan Unilever's total share is 216 crore shares.
[173]
If you multiply 216 crore shares with Rs-2190
[178]
then you will get almost around this amount.
[182]
So the market cap is, "one shares price x number of shares".
[186]
So the amount you have to pay to buy off an entire company
[190]
is what market cap tells us.
[193]
So with this, we can know the size of that company.
[199]
And market cap comes in handy in another interesting comparison
[203]
very useful for me in selecting these stocks
[207]
I will tell you at the end of the videos, which is a little advanced.
[210]
Today you have to keep in mind one thing that
[213]
there 20 classes are like mathematics classes.
[216]
This means every time you will learn something
[220]
which will be connected with the previous videos.
[223]
So it's important to see the videos in line
[227]
and watch all videos
[228]
because what is important,
what ration you have to keep in mind
[232]
what heading do you have to keep in mind
[234]
what business that company dose
[236]
it depends on that, so it's important to understand it.
[239]
Now the next ratio, which is PE ratio.
[242]
PE means, "Price to Earning" ratio.
[245]
Now to understand it
[248]
first, we have to understand something else,
just as I said.
[251]
In finance investing everything in connected.
[254]
So to understand PE ratio
[258]
first, we have to know what's Earning Per Share (EPS).
[262]
I'll explain Earning Per Share with a simple example.
[266]
Let's think a shop makes Rs-100 a year
[270]
now that shop has four partners
[273]
and every ones share is 1/4
[277]
which means everyone has 25% partnership of that shop
[280]
if the shop has 4 shares,
and each partner has 1 share
[284]
and in total, that shop makes Rs-100
[287]
so the shops net profit is Rs-100
[291]
and the total shares are
[293]
as the number of shares, we can see here
[295]
in that shop, the number of shares are 4.
[298]
Total profit is Rs-100, number of shares 4
[301]
so per share, the profit of a single person will be
[306]
Rs-25
[307]
and that's earning per share.
[309]
So in Hindustan Unilever's case
[313]
earning per share is around Rs-28.
[316]
I hope, the earnings per share are now clear to you.
[318]
That, to know the company's total profit
[321]
divide that with the company鈥檚 total shares.
[325]
So I will divide net profit, by the number of shares
[329]
and I'll get earning per share.
[331]
Let's understand it more,
[332]
if I want to buy Hindustan Unilever's share
[335]
and I'm getting it, in around Rs-2200.
[339]
And for that one share,
per year I will earn around Rs-28.
[345]
So what's PE?
[347]
Simply PE means
[349]
to buy one share
[350]
how many times are you paying
for its one-year earning?
[355]
So if Hindustan Unilever
[358]
makes Rs-28 in one year
[361]
and if you get Hindustan Unilever's share for Rs-28.
[365]
Then you are giving it a 1 PE.
[369]
So you鈥檙e buying that share for its one-year price.
[373]
But Hindustan Unilever's share is at Rs-2190
[378]
so Rs-2190, which is the price of
this company or is the PE,
[383]
divide with the EPS 28, which in "E",
[388]
so "P" divided by "E", will be 70.
[392]
Which means to buy Hindustan Unilever today
[395]
for it's one year income, per share income
[399]
then you are paying 70x that money.
[402]
So is this 70 PE, more or less
[406]
should you buy the share or not
[408]
you ask it to yourself.
[410]
Would you buy such a shop, for Rs-70
[414]
that makes you a profit of Rs-1 per year.
[417]
If I say to you, that there is a shop
[420]
which makes Rs-1 a year, and sell you at Rs-70.
[424]
So will you buy that shop?
[426]
This is one thing.
[428]
Second thing is
[429]
a company like HUL, for years
[433]
who knows, for the past 30-50 years
[435]
has increased their profit for every year
[439]
at what rate? Come let's see.
[442]
See this profit growth chart
[445]
in past 1 year, HUL's profit has grown by 15%,
[449]
in past 3 years, on an average, has grown by 13%,
[453]
in past 5 years, at the rate of 10%,
[456]
on an average HUL grows their profit.
[460]
Bur before that, there is one simple way
[463]
that we can find out, is HUL expensive or not.
[466]
So we have seen, that PE is 70.
[469]
Now let's see, because the PE changes everyday
[472]
it's dependent on the price, the "P" is price.
[476]
If the price falls then PE will fall,
price rises then PE rise.
[480]
So this share, every day rises, falls,
becomes expensive and cheap,
[483]
Let's check what the usual PE is, for HUL share.
[488]
Usually what rate does the market give
after 1 year of earning
[492]
like today is 70x times
[493]
Let鈥檚 check the history, you have to scroll a little
[496]
you'll find this, 6 months, 1 year, 3 years
and 5 years more data.
[502]
You'll find 8 years more data, in 5 years one
[506]
it's tells you, at what PE, HUL runs.
[510]
So like at 2013, it was around 27 PE
[513]
2015 and 2017, it was at 40 PE.
[517]
From 2018, it started growing
[520]
and in the past 8 years, as much HUL is,
[524]
it has never been this expensive or at this high PE.
[528]
So a primary guess is that
[531]
now HUL is expensive.
[533]
And to think that, because the PE is highest in 5 years,
that's why it's expensive
[539]
It's not right.
[541]
Market can give more PE, or it can increase
[544]
if the company shows more growth.
[546]
It can happen, that in the past 5 years,
that companies growth was slow
[550]
now in the last 1-2 years, the growth is fast
[552]
meaning the company is making a fast profit.
[555]
So if the companies make a profit fast,
[558]
then the rate, which the market gives will also increase.
[561]
So at first look, HUL seems expensive
[563]
because, before it was on 40-50 PE,
but now is at 70 PE,
[567]
Now let's see, is HUL increasing their profit like before,
[573]
let's see.
[575]
So this is the sales and profit growth chart
[578]
now see, in last 1 year,
HUL has increased their profit by 15%,
[582]
in last 3 years, they increased it by 13%,
[586]
in last 5 years, they increased their profit by 9%.
[591]
So in past 3 years, their performance improved,
[593]
in past 1 years, their performance improved more.
[596]
So that's one reason, that the market is giving it more PE,
then they used to.
[603]
Suppose a little profit has increased
[606]
because of that, is it justified that
the PE has gone from 50 to 70
[610]
should you buy this share at 70 PE?
[612]
Its calculation is a little difficult, we'll learn tomorrow,
[616]
but today, one thing is important to learn.
[619]
You have learned, from today's PE to historical PE,
[624]
you should compare it, and
[628]
compare the historical PE, with its profit growth history.
[633]
We have learned this far.
[635]
So now imagine, there's such a company
[638]
whose profit has rapidly increased, in past 5 years
[642]
increased more in 3 years and more in last 1 year.
[645]
This means every year, there
profit and performance have improved
[651]
besides from that, their valuation chart shows
[656]
their PE is decreasing.
[659]
This means the company, which was running on 50 PE,
[662]
first, the profit growth was 10% and now it's 20%
[667]
but first it's PE was 50 and now it's PE is 30-40.
[671]
So we can tell, just looking at the PE ratio
[675]
that company will be a good company.
[677]
Keep in mind, just looking at the PE ratio,
and the things which I have taught today
[681]
you should not blindly invest in shares.
[684]
Invest then, when you have researched it,
[687]
and completed the 20 day course.
[690]
Today, it's just the simplistic examples.
[693]
So, I've searched for a company like that, for you.
[696]
I'm showing this for simplifying the
[700]
use and comparing of the PE ratio.
[703]
Colgate, this is also a well-known company.
[706]
Its PE ratio is around 39, nowadays.
[710]
Now let's see its historical PE.
[713]
Its historical PE is 40,
[716]
little less here, then 45,
[718]
around 50, here also.
[722]
So it's usually been between 40-50,
[726]
now it's 39, which means, it's going around its historical PE,
or a little cheap.
[731]
Why this? Is Colgate performing badly?
[734]
Come let's see.
[736]
1 year profit growth 15%,
[739]
3 years 10%,
[740]
and 5 years 7%.
[742]
Which means this also, compare to 5 year,
[745]
better in 3 year and last year much better performance.
[749]
So if we see this fewer data, then there's no reason
[753]
that it got 39 PE, instead of 45-50 PE.
[757]
So in this case, my interest will grow,
[760]
I won't invest, but my interest will grow,
[763]
that this company looks good, I can check it out
[767]
because, it's cheaper than its historical valuation,
[769]
and compare to its historical performance,
Its performance is becoming better.
[774]
So like this, by using PE ratio,
[778]
we can filter such companies
[781]
which I can further research and will pay attention to.
[787]
So what you have learned today,
can be used to filter companies
[791]
where to pay attention to and
where not to pay attention.
[794]
It's not a investing recommendation.
[797]
Now pay attention, I've said at the video's starting
[799]
that market cap, I told you
[802]
but how, just by looking at the market cap
[805]
I can get a slight idea, of where to invest and where not.
[811]
Every people have limited money
[814]
if I say, you have Rs-5,00,000 crore,
[817]
so, what would you buy with that Rs-5,00,000 crore?
[820]
Do you want to buy HUL, which is almost around Rs-4,50,000 crore,
[827]
or you'll buy INFOSYS, which we all know,
[831]
let's see its market cap.
[833]
Infosys's market cap is little up to Rs-2,50,000 crore,
[837]
if you want, you can buy Infosys,
[840]
and still you would have Rs-2,30,000 crore left.
[843]
So, how would you want to spend your Rs-5,00,000 crore?
[848]
Do you want to buy HDFC Bank?
[850]
HDFC Bank is almost equal to HUL, in market cap.
[855]
If you have Rs-5,00,000 crore, will you buy the whole HUL?
[860]
Or all of HDFC.
[862]
Do you like to buy Soap, Ketchup, Noodle making company,
[866]
or you will buy, the country's largest, well-managed Bank.
[871]
So like this, when you, industry by industry
[874]
company by company, will think like
[877]
I have this money, what can I buy with this money?
[880]
Like when we went to eat at school
[883]
our family members gave us Rs-50 or 100,
[886]
so there were many stalls outside
[890]
so we would think, should we eat chips or chocolate?
[894]
eat Bhel or something else, just like that
[897]
you have to think about the market cap,
[899]
with this money, should I buy HUL or Airline company,
[904]
or IT company or should I buy Bank.
[906]
So with that, your intuition will give you an idea
[911]
where can you put your valuable money.
[914]
Because your money is always limited,
[916]
and you find it's best use intuitively
[919]
if you compare market cap like this, across industries.
[923]
So let's hope you find this introductive video simple,
and understood it.
[928]
If you find this video difficult, so comment about it
[932]
that what you found difficult and didn't understand,
[935]
and I'll make sure to clear those doubts, tomorrow.
[938]
And like this, if you want to learn detailed investing year on,
[942]
then you can join the Academy of Value Investing
[946]
where me and my team, year round
[949]
text lessons, quizzes, videos, downloadable materials
[953]
company research reports, excel sheet, every other way
[956]
will teach you value investing and become an expert investor.
[961]
You'll find the Academy of Value Investing link in the
above card and in this video's description.
[967]
With that if you want to know,
[970]
in this market fall, which stock we bought
[973]
and what stocks we are recommending
in our model portfolio,
[977]
you can join our model portfolio service
[979]
Idea Back.
[981]
You'll also get the link in videos description.
[985]
If you liked today's video, then don't forget to share it
[988]
and also create your ticker account
[991]
so you also can start research like this
[994]
and can practice everything that we learned.
[998]
see you tomorrow evening, at 7 pm,
[1000]
In Curfew Classes with Pranjal, Bye Bye.
Most Recent Videos:
You can go back to the homepage right here: Homepage