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Can investors flirt with a quality stocks bubble? A diversified portfolio can pay off on D Street

Scores of quality stocks have been multibaggers for value investors over the past few years, but many now find them expensive, trading at high PE multiples. Is there a bubble in the making? Perhaps not, though many of these stocks appear overvalued. Smart investing – buying the cheaper growth stories and selling those trading at high prices – and a diversified portfolio can help investors profit from the market.
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pravin
14 Nov 2019 8 Mins Read 0 comment
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By mid-October 2019, the price-to-earnings (PE) multiple of Asian Paints touched a high of 77x. While the company has solid fundamentals and one of the best managements, some investors thought the PE was very high — even for Asian Paints. It’s a classic quality stock. Quality stocks have high return on equity, low debt-equity ratio, and stable growth in earnings.
foam, froth, and bubble be there on the top. You will enjoy your drink along with the bubbles and the froth. And a little bit of flirting with the quality bubble might just be healthy. Like Ravi Dharamshi, a fund manager on Twitter said, “it is bubblish in calling a bubble in quality”. ( Graphics by Sadhana Saxena)
By mid-October 2019, the price-to-earnings (PE) multiple of Asian Paints touched a high of 77x. While the company has solid fundamentals and one of the best managements, some investors thought the PE was very high — even for Asian Paints. It’s a classic quality stock. Quality stocks have high return on equity, low debt-equity ratio, and stable growth in earnings. foam, froth, and bubble be there on the top. You will enjoy your drink along with the bubbles and the froth. And a little bit of flirting with the quality bubble might just be healthy. Like Ravi Dharamshi, a fund manager on Twitter said, “it is bubblish in calling a bubble in quality”. ( Graphics by Sadhana Saxena)

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