Lo and behold! It’s that time of the year again which individuals and corporate eagerly await for. The time when the FinMin opens the briefcase that affects the fortunes of millions atleast for a year. The time when people eagerly tune into the news channel and hold onto every word the Finance Minister says in his speech. Yes, it’s time for ‘The Union Budget 2011-12’!
As individuals our primary interest in the budget is how much money are we going to pay/save as tax and which things are going to be cheaper or expensive. However, the Union Budget is important from another perspective as well – the effect it has on the price of stocks especially over the short term.
Don’t worry, we are not talking about short term trading based on the outcome of the budget (Infact we never talk about short term trading on this blog – if you haven’t noticed!). What we are talking about is the effect on stock prices because of speculation on the outcome of the budget! Every year, we see the market rise or fall leading up to the budget; once the budget is out, we again see a rise or fall depending on whether expectations were met or not. So, how does this help us Value Investors?
Remember what Warren Buffet said about investing –
“Be fearful when the market is greedy and be greedy when the market is fearful!”
And one thing you can be sure of is that close to the budget, the market is usually acting greedy or fearful – never rational!
So, the budget could present you an excellent opportunity to buy that awesome stock that you always wanted in your portfolio but could never buy because the price seemed quite high. Or it could also give you an opportunity to book profits on some of your stocks (You only earn returns when you sell your stocks remember!) and laugh all the way to the bank. This is the time when you have to put on your Value Investor’s shoes, stretch a bit and get ready to make some intelligent stock picks or decide to sell some stocks!
But to do all this, the thing that you require the most is to know the MRP of a stock! All of you must be aware of our concept of MRP of a stock (if you aren’t, don’t worry! Read this article to know what MRP exactly is) MRP is the right value of a stock arrived at based on value investing principles. You must also be aware that at MoneyWorks4me.com, we have calculated the MRP for 1500+ stocks. But what you might not be aware of is that now you can get the MRP of your stock – ABSOLUTELY FREE!!
Yes! You heard (rather read) it right! MoneyWorks4me.com is offering a 30-day free trial which can help you make great stock investments. And when we say FREE, we mean it!
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So, if you haven’t subscribed to our site, here’s a chance to see what it is all about. But hurry up, the free trial offer closes on 28th of February. Make sure you register before this date to make the most of the opportunities that the budget may throw up!