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What is the use of data like fund PE or Market Capitalisation?

Investment is a simple activity and it's possible to succeed without having to learn complex concepts

The famous investor Warren Buffett once said, "If calculus or algebra were required to be a great investor, I'd have to go back to delivering newspapers." What Buffett is saying here is that investment is basically a simple activity and it's possible to succeed -- and succeed very well -- without having to learn complex concepts.

By this standard, we plead guilty to making fund investment appear more complex than it needs to be. It's entirely possible to be a competent and successful mutual fund investor without understanding the more complex things that we put up on ValueResearchOnline. Even if you understand them, there's no pressing need to pay attention to them. That's not the usual thing you would expect to hear from any publisher but it's the honest truth.

If that is the case, it begs a question as to why do we publish these data then? To put it simply, we have readers with a wide variety of information and analysis needs and such data is useful to a significant number of readers. There are people who need to analyse funds professionally and they need to go to a greater depth to make an investment decision. They find it useful to compare how the average market capitalisation or the average PE of one fund compares to another, or how two funds of the same category and even the same fund house may have different average market capitalisation and PE.

This may give such readers some additional clues they need for whatever study they are doing. But if your need is to just select a set of good funds invest in, then these are not needed.

Of course, if you understand these concepts and find them interesting then it will help you know about the workings of mutual funds.

We appreciate that many of our readers are people who are fascinated by mutual funds and like to learn as much about them as possible. In other words, they are 'mutual fund geeks'.

After all, most of us at Value Research belong to this category also, which is the real reason why we have managed to create this resource, like many others that we have for you!