SOME MORE EXAMPLES

THE LAST POST CARRIED AN EXAMPLE WHICH MIGHT HAVE CLEARED SOME DOUBTS AND EVEN CREATED A FEW MORE.
LETS TRY OUR HAND AT ONE MORE EXAMPLE THOUGH

THE PAPER IS AGAIN TIMES OF INDIA,EDITION DATED 25/04/2007,PAGE NO 20

LETS TAKE BAJAJ AUTO'S EXAMPLE TODAY.

THE LIST GIVES FOLLOWING DETAILS

BAJAJ AUTO 2419.95,2475,2375,2444.35[32162] .............. 19.4 3325/2085
2404,2475,2375,2442.70[143631]................. 19.4 3375/2074

THE LINE IN RED GIVES INFORMATION ABOUT BAJAJ AUTO'S SHARE IN BSE,WHILE THAT IN GREEN COLOR GIVES THE SAME INFORMATION IN NSE
(BY THE WAY I HAVE TYPED IT IN DIFFERENT COLORS ,ALL PAPERS PRINT IT IN BLACK ONLY.THE ONLY THING TO REMEMBER IS THAT THE FIRST LINE BELONGS TO BSE AND THE LATER TO NSE,SIMPLE ENOUGH)

NOW THE ABOVE LINE MEANS THAT
IN BSE
1.BAJAJ AUTO'S SHARE OPENED AT Rs 2419.95
2.IT REACHED A HIGH OF Rs 2475/- IN THE WHOLE DAY
3.IT REACHED A LOW OF Rs 2375/- IN THE WHOLE DAY
4.ITS CLOSING PRICE WAS Rs 2444.35
5.TOTAL 32,162 SHARES WERE SOLD IN THE DAY
6.P/E WAS 19.4 (WE WILL COME TO IT LATER AS PROMISED)
7.FOR THE PAST 52 WEEKS THIS PARTICULAR SHARE HAS REACHED THE MAXIMUM VALUE OF Rs 3325/- AND A MINIMUM OF Rs 2085/-

**AS I MENTIONED YESTERDAY EVEN THOUGH THE VALUES HAVE BEEN PRINTED ON 25TH THEY PROVIDE DETAILS OF THE PREVIOUS DAY i:e 24TH.

**THE SECOND LINE GIVES THE SAME DETAILS FOR NSE.
YOU MAY OBSERVE THAT THERE IS SLIGHT DIFFERENCE IN THE CORRESPONDING VALUE,WHICH IN QUITE INEVITABLE BECAUSE THEY BELONG TO TWO SEPARATE MARKETS.

**IF YOU SEE THE REMAINING LIST YOU MAY FIND SOME COMPANIES LISTED IN BOLD TYPES.THIS IS DONE TO INDICATE THAT THE PARTICULAR SHARE HAS ATTAINED A 52 WEEK HIGH OR LOW PRICE.
THUS IF A PARTICULAR SHARE ATTAINS ITS HIGHEST VALUE FOR THE PAST 52 WEEKS THEN ITS VALUE IS SUFFIXED BY THE LETTER H,SIMILARLY LETTER L SUFFIXES THE LOWEST VALUE.

FROM THE SAME LIST PUBLISHED ON 25TH APRIL 2007 YOU MAY FIND THAT COMPANIES LIKE BHART ARTL,HINDUJA TMT,INDIAN BANK,J& K BANK etc HAVE BEEN TYPED IN BOLD LETTERS.

LETS TAKE THE EXAMPLE OF BHARTI ARTL

BHARTI ARTL 836,882,836,873.30[233543].......50.9 882H/310
JUST SEE THE PORTION I HAVE TYPED IN LARGER FONT.
882H/310 MEANS TODAY THE SHARES OF BHARTI AIRTEL HAVE REACHED A 52 WEEK HIGH VALUE OF Rs 882/- AS AGAINST ITS LOWEST VALUE OF Rs 310/-

WELL LETS HOPE I HAVEN'T GIVE YOU AN OVERDOSE,MANY SUCH SMALL BUT IMPORTANT TIPS IN THE NEXT POST.

how and what to read in the news paper

AS MENTIONED IN THE PRIOR POSTS ,I AM GOING TO EXPLAIN ALL I MENTIONED WITH EXAMPLE FROM HERE ONWARDS.
STARTING FROM HOW TO READ THE NEWSPAPER.

YOU MIGHT HAVE MANY A TIMES JUST OVERLOOKED THE BUSINESS SECTION OF THE NEWSPAPER,NORMALLY IT CARRIES NEWS REGARDING VARIOUS BUSINESS RELATED DEVELOPMENTS.BUT FOR US THE MOST IMPORTANT THING IS THE STOCKS LISTING CARRIED IN THE NEWSPAPER IN RATHER SMALL PRINT.THEY ARE MERELY NUMBERS UNTIL YOU KNOW WHAT TO MAKE OUT FROM THEM.

HERES AN EXAMPLE TO MAKE THINGS CLEARER.NUMBERS HAVE BEEN ACTUALLY PICKED FROM TIMES OF INDIAS 30TH MARCH 2007 EDITION, PAGE 20 (ACTUALLY ANY DAY'S EDITION EXCEPT SUNDAY AND MONDAY WILL CARRY THIS LIST,JUST THE NUMBERS WILL CHANGE.
IT MUST BE NOTED THAT EVEN THOUGH THE LIST IS PRINTED ON 30TH MARCH IT CARRIES ALL THE NUMBERS OF THE PREVIOUS DAY (29TH MARCH)

UNDER THE HEADING STOCKS THE FOLLOWING LIST IS CARRIED.

BSE A GROUP/NSE

CO,PRICES,[VOL]; PE 52-WK H/L
ABB 3550,3589,3475,3507.20[10932] 43.7 4000/1920
3645,3645,3485.05,3505[118471] 43.6 3999/1900

NOW LETS TRY AND MAKE OUT WHAT THE ABOVE LIST TELLS US.

BSE A GROUP/NSE:
THIS MEANS THAT THE BELOW LISTED SHARES BELONG TO THE A-LIST (REPUTED,TRUSTED,GOOD PERFORMING) OF COMPANIES IN INDIA.
THE FIRST LINE INDICTES THE PRICE OF THE SHARE ; IN BSE WHILE THE SECOND LINE INDIACTES THE PRICE OF THE SAME SHARE IN NSE.

CO,PRICES,[VOL]:
THE ABOVE LINE CARRIES COMPANY'S NAME ,PRICE OF THE SHARE AT VARIOUS POINTS IN THE MARKET,AND VOLUME OR QUANTITY OF SHARES SOLD .

PE 52Wk H/L:
P/E HERE MEANS THE RATIO OF CLOSING SHARE PRICE TO THE EARNING PER SHARE(EPS),I WILL EXPLAIN YOU THIS TERM IN DETAIL A BIT LATER.
52Wk H/L MEANS THE HIGHEST AND LOWEST PRICE OF THE SHARE IN THE PAST 52 WEEKS.

SO
CO,PRICES,[VOL] PE 52-WK H/L
ABB 3550,3589,3475,3507.20[10932] 43.7 4000/1920

MEANS
1.THE COMPANIES NAME IS ABB
2.ITS OPENING PRICE FOR YESTERDAY (29TH MARCH) IS Rs 3550/- (IT IS SAME AS CLOSING PRICE OF THE LAST DAY 28TH MARCH) AT BSE.
3.ITS HIGHEST VALUE FOR THE DAY WAS Rs 3589/- AT BSE.
4.ITS LOWEST VALUE FOR THE DAY WAS Rs 3475/- AT BSE.
5.ITS CLOSING PRICE FOR THE DAY WAS Rs 3507.20 AT BSE.
6.THE PE FOR THIS PARTICULAR SHARE WAS 43.7
7.ITS HIGHEST AND LOWEST PRICE FOR THE PAST 52 WEEKS (1 YEAR) HAS BEEN
Rs 4000/- AND Rs 1920/- RESPECTIVELY.
SIMILARLY THE SECOND LINE GIVES YOU THE SAME INFORMATION OF THE SHARES FOR NSE RATHER THAN BSE.

NOW IT SEEMS PRETTY SIMPLER TO GRASP.YOU MIGHT HAVE NOTICED THE VARIATION IN SHARE'S PRICE THROUGHOUT THE DAY AND THEN THROUGH THE YEAR AS WELL.WE WILL SLOWLY LEARN TO MAKE USE OF THIS VARIATION FOR OUR PROFIT.

BEING STREET SMART: PART- 3

LAST TIME WE SAW HOW NEWSPAPER CAN BE USED TO FOLLOW THE MARKET,AND IN THE VERY NEXT BLOG I WILL EXPLAIN YOU (WITH EXAMPLE) WHAT TO READ AND HOW TO INTERPRETE THE SAME.

IN THE MEANWHILE I WOULD LIKE TO INFORM YOU ABOUT ANOTHER POWERFUL MEDIUM TO FOLLOW THE MARKET, OWN VERY OWN 'IDIOT BOX' YES THE TELEVISION ITSELF.SHARE MARKET CAN BE FOLLOWED PRETTY EASILY BY WATCHING BUSSINESS CHANNELS LIKE CNBC18,NDTV PROFIT,etc.SOME ARE EVEN AVAILABLE IN HINDI SO THAT MAKES THINGS THAT MORE EASIER.

BUT AGAIN WHO HAS THE TIME TO BE GLUED TO THE T.V FOR HOURS.THEN LET ME MAKE IT SIMPLER FOR YOU.SAY YOU WORK 9 TO 6,THEN WHAT TO SEE ON THE T.V?
THE ANSWER IS WATCH T.V INTERMEDIATELY.JUST KEEP A CHECK OF HOW THE MARKET FARES,HOW THE PRICE OF YOUR SHARES FARES,etc.THE REST OF THE NEWS THAT IS MERGERS,EXPANSIONS,COLLABORATIONS,STRIKES,etc CAN BE VIEWED LATER IN THE DAY.

SO BRIEFING YOU ABOUT THE TWO MEDIUMS IS OVER AND FROM THE NEXT POST ONWARD WE WILL GET DOWN TO PRACTICAL USE OF THE TWO.

BEING STREET SMART: PART -2

CONTINUING WITH WHAT WE DISCUSSED IN THE PRIOR POST, YOU MAY NOTICE THAT READING A BUSINESS PARER (OR AT LEAST THE BUSINESS SECTION OF YOUR DAILY NEWSPAPER) IS QUITE ESSENTIAL.

IT PROVIDES YOU WITH ALL THE STATS OF THE PREVIOUS DAY'S MARKET,TELLS YOU ABOUT MAJOR ACTIVITIES OF ANY COMPANY(LIKE SAY EXPANSION,MERGER,ACQUISITION,BANKRUPTCY,etc.

BUT FOR MANY OF US A BUSINESS NEWSPAPER SEEMS NOTHING ELSE BUT GREEK.WHAT MIGHT BE THE REASON BEHIND IT?
THE TWO REASON I FIND ARE
1.THE INTRICATE TERMS INVOLVED
2.OUR RELUCTANCE TO KNOW ABOUT THIS TERMS .
I HAVE EXPLAINED MANY A SO CALLED COMPLICATED TERMS IN MY EARLIER BLOGS AND WILL KEEPING ON ADDING SOME MORE AS AND WHEN REQUIRED.

SO FIRST OF ALL HOW TO GO ABOUT THE NEWSPAPER READING?

FOR STARTERS PICK UP YOUR DAILY NEWSPAPER AND GO TO THE BUSINESS PAGE.
80% OF THE NEWSPAPER PROVIDE YOU AT LEAST THE LISTINGS OF THE PRIOR DAY.
IT IS THE RECORD OF HOW THE SHARES OF VARIOUS COMPANIES PERFORMED THROUGHOUT THE DAY.

IT PROVIDES THE DETAIL ABOUT
1.THE OPENING PRICE OF THE PARTICULAR SHARE

2.ITS HIGHEST AND LOWEST PRICE FOR THE DAY

3.ITS CLOSING PRICE

4.VOLUME (QUANTITY) OF SHARES SOLD, AND FEW OTHER DETAILS TOO
DETAILS ARE PROVIDED FOR BOTH THE EXCHANGES - BSE AND NSE

ALL THIS DOES SOUND A BIT TEDIOUS BUT ITS ONLY TILL YOU TRY IT.
I WILL EXPLAIN THE ABOVE MENTIONED LIST WITH AN EXAMPLE VERY SHORTLY,TILL THEN GIVE IT A TRY.

BEING STREET SMART- PART 1

TILL NOW I HAVE PROVIDED YOU ALL THE BASICS,THESE WILL EQUIP YOU IN THIS FIELD,BUT JUST THE THEORETICAL KNOWLEDGE IS NOT GOING TO HELP.

YOU NEED TO KNOW HOW TO PUT ALL THIS KNOWLEDGE TO WORK AND HOW TO ENHANCE IT DAY IN DAY OUT.FROM HEREON I WILL TRY TO DO THE SAME AND HOPE YOU TOO.

I WOULD LIKE TO SPECIALLY MENTION THAT THERE ARE TWO MORE IMPORTANT TRANSACTIONS NAMED 'FUTURES AND OPTIONS' STILL LEFT.BUT THE COMPLEXITY INVOLVED REQUIRES YOUR BASICS TO BE PERFECT.SO FIRST WE WILL TRY AND APPLY ALL THE THINGS WE LEARNED SO FAR AND THEN ONLY MOVE TO 'FUTURES AND OPTIONS'.

SO WHAT DOES BEING STREET SMART IMPLY WITH SHARE MARKET? BEING STREET SMART MEANS DOING THE RIGHT THING AT THE RIGHT TIME. LETS JOT DOWN A FEW STEPS FOR THE SAME

FOLLOWING THE MARKET:
NOW WHEREVER YOUR MONEY IS INVOLVED ALL THE CARE SHOULD BE TAKEN.YOU NEED TO FOLLOW THE MARKET AND KEEP A WATCH ON ALL ITS OPERATIONS. DOES THAT MEAN SPENDING THE WHOLE DAY AT MY BROKER? DEFINITELY NO. THE MARKET CAN BE FOLLOWED PRETTY EASILY ALONG WITH YOUR DAILY WORK. SAY YOU WORK 9 TO 6 THEN WHAT ALL DO YOU NEED TO DO?
THE MINIMUM YOU SHOULD DO IS

* READ A BUSINESS NEWSPAPER

* WATCH BUSINESS NEWS AT LEAST ONCE A DAY

* BE AWARE OF MAJOR HAPPENINGS IN THE COUNTRY,BY READING AT LEAST FRONT PAGE NEWS.

LONG TERM DELIVERY

AS DISCUSSED IN THE EARLIER POST WE ARE GOING TO DISCUSS LONG TERM DELIVERY.UP TILL NOW NOW MIGHT HAVE HAD A FAIR IDEA ABOUT SHORT TERM DELIVERY,THEN LONG TERM DELIVERY IS AS EASY AS IT GETS.

AS THE NAME ITSELF SUGGESTS IT INVOLVES BUYING SHARES AND OWNING THEM FOR A LONG PERIOD.THE ONLY THING IS HOW LONG A DURATION? THEN THE ANSWER IS ONE YEAR FROM THE DATE OF BUYING.
SO IN SHORT IF YOU SELL YOUR SHARES ANYTIME AFTER A YEAR FROM BUYING THEN THE TRANSACTION IS TERMED AS LONG TERM DELIVERY.

LETS JUST JOT DOWN ITS IMPORTANT ASPECTS

1.AS YOU ARE GOING TO SELL THE SHARES AFTER AN YEAR THE INCOME SO GENERATED WILL BE 100% TAX FREE.

2.SIMILARLY HOLDING THE SHARES ALL YEAR ALONG INCREASES YOUR CHANCES OF GETTING A DIVIDEND OR EVEN A BONUS FROM THE COMPANY.

3.IF YOU ANALYZE THE PERFORMANCE OF THE INDIAN SHARE MARKET YOU REALIZE THAT THERE HAS BEEN A STEADY UPWARD TREND .SO THE MOOD IS UPBEAT.PRICES OF SHARES HAVE SHOW A RISE IN RECENT YEARS AND A CALCULATED AND RESEARCHED INVESTMENT CAN YIELD YOU SURPRISINGLY GOOD RESULTS.

JUST A PICK FROM A RECENT NEWSPAPER SURVEY:
TYPE OF INVESTMENT PER ANNUM INTEREST YIELDED
FIX DEPOSIT IN BANKS 8-9 %
GOLD & OTHER PRECIOUS METALS 6-7%
SHARES 15-17%

WELL SOMEONE HAS SAID STATISTICS ARE LIKE BIKINIS WHAT THEY REVEAL IS INTERESTING BUT WHAT THEY HIDE IS IMPORTANT.
BUT STILL THE NUMBERS ARE FOR YOU TO AT.

NOW I THINK ITS TIME THAT ALL OF YOU BECOME MORE ACTIVE ,MORE OF IT NEXT TIME.

SHORT TERM TRADING

LAST TIME I HAD JUST GIVEN YOU A HINT OF THE SECOND TYPE OF TRANSACTION i:e SHORT TERM TRADING.IT GIVES YOU AN OPTION OF GETTING OUT OF A STICKY SITUATION IN INTRA-DAY TRADING.

SHORT TERM TRADING INVOLVES BUYING SHARES AND SELLING THEM WITHIN A SHORT TERM.THIS SO CALLED SHORT TERM CAN BE FROM 24 HOURS TO A WHOLE YEAR FROM THE TIME YOU BUY SHARES.FOR AN EXAMPLE SAY I BUY SHARES TODAY AND SELL IT TOMMOROW OR ON ANY DAY BEFORE THIS VERY DAY OF YEAR 2008 THEN IT IS TERMED AS A SHORT TERM TRADING OR SHORT TERM DELIVERY.(DELIVERY BECAUSE YOU ACTUALLY ACCEPT THE SHARES ,UNLIKE IN INTRA-DAY).

LETS JUST TRY TO GO A BIT DEEPER AND FIND OUT WHAT SHORT TERM DELIVERY REALLY IMPLIES FOR A SMALL INVESTOR LIKE YOU AND ME.
CONTINUING WITH OUR PRIOR EXAMPLE,LETS SAY YOU BUY 100 SHARES OF ANY COMPANY AT Rs 50.00 EACH.YOU DON'T FIND SELLING THEM PROFITABLE ENOUGH FOR SELLING ON THAT VERY DAY AND SO YOU ACCEPT TO BUY THEM.
NOW WHAT DOES THAT IMPLY?

1.FIRST AND FOREMOST,YOU NEED TO PAY FOR YOUR SHARES(Rs 100*50 = 5000/- + BROKERAGE , IN THIS CASE) WITHIN T+ 2.

2.YOU CAN SELL THESE SHARES ANYTIME THE NEXT DAY SEEKING FAVOURABLE MARKET CONDITIONS.

3.JUST 24 HOURS DEDUCT THE INCOME TAX ON THIS TYPE OF EARNING TO MERELY 10%, AS AGAINST 30% ON INTRA-DAY.

4.SAY JUST IN CASE YOU KEEP THESE SHARES FOR A LONGER PERIOD THEN YOU MIGHT EARN DIVIDEND AND BONUS FROM THE COMPANY.

WHAT ARE DIVIDEND AND BONUS?

I)DIVIDEND : IT IS THE PERCENTAGE OF PROFIT WHICH THE COMPANY SHARES WITH ITS INVESTORS.
IT IS SOME PERCENTAGE OF THE VALUE OF SHARES YOU HOLD.HOLDING THE SHARE WHEN THE COMPANY DECLARES DIVIDEND MAKES YOU LIABLE TO BE PAID THE DIVIDEND,SO YOU MAY NOT HOLD THE SHARES FOR THE WHOLE YEAR AND STILL EARN DIVIDEND IF YOU HAVE THE SHARES AT THE RIGHT TIME.THIS EVEN RESULTS IN INCREASE IN SHARE PRICES AS THE DIVIDEND DECLARATION DATE GETS NEAR.

II) BONUS : SOMETIMES THE COMPANY PAYS THE INVESTOR FOR HIS LOYALTY BY GIVE FREE SHARES PROPORTIONATE TO HIS INVESTMENT.
THUS YOU MIGHT GET ONE SHARE AS BONUS FOR EVERY SHARE YOU HOLD.THIS ENDS UP EARNING YOU DOUBLE THE NUMBER OF YOUR SHARES,THUS GIVING YOU CENT PERCENT PROFIT.

BONUS AND DIVIDEND ARE AT THE SOLE DISCRETION OF THE COMPANY, AND INVESTOR CANNOT CLAIM IT IF THE COMPANY DENIES THE SAME.
IT MUST BE REMEMBERED THAT BONUS AND DIVIDEND AREN'T ALL THAT IMPORTANT SOURCES OF INCOME IN SHARES.
YOU DON'T EARN MONEY UNTIL YOU SELL SHARES.

NEXT TIME WE WILL SEE THE MOST CONSERVATIVE WAY OF EARNING MONEY CALLED LONG TERM DELIVERY.