WHY NOT FDs ?

WHY NOT FDS ? THIS IS THE EXACT QUESTION MY FRIEND ASKED ME WHEN I SUGGESTED HIM TO INVEST IN SHARES.
NOT JUST MY FRIEND , BUT ALMOST EVERYONE THINKS THAT HAVING FDs (FIXED DEPOSITS) IN BANKS IS THE BEST INVESTMENT FOR THEM. WHEN I SUGGESTED HIM TO INVEST IN SHARES HE WAS QUICK TO POINT OUT HOW RISKY THEY ARE AND HOW SAFE FDs ARE.

I HAVE ALREADY EXPLAINED HOW PROFITABLE SHARES CAN BE WITHOUT ANY MAJOR RISKS , AND SO THE POINT TO PROVE TODAY IS "HOW SHARES ARE BETTER THAN FDs"
AN EXAMPLE TO MAKE THINGS EASIER AS USUAL
1.CONSIDER THAT YOU ARE BLOWING A BALLOON NAMED 'SAVINGS' .

2.YOU ARE FILLING IT UP WITH AIR i:e YOUR HARD OWNED MONEY OR WE CALL IT 'INVESTMENT' .

3.NOW THE MORE YOU INVEST THE FATTER YOUR SAVINGS ARE GOING TO BE.

4.BUT THERES A MAJOR HITCH. EVEN IF YOU KEEP A BLOWN BALLOON SEALED TIGHT ( A PERFECT ANALOGY TO FDs) IT LOOSES AIR PERIODICALLY THROUGH SMALL PORES.
IN OUR CONTEXT THE PORES WHICH CAUSE THE LOSS ARE CALLED 'INFLATION'
SO IN OUR CASE EVEN IF YOU KEEP ON INVESTING IN FDs , INFLATION IS NOT GOING TO LET YOU GO FURTHER.

TAKE THE PRESENT SCENARIO. BANKS ARE OFFERING UPTO 10% ( MAX) PER ANNUM ON FDs OF 1 TO 3 YEARS, WHILE THE INFLATION IS HOVERING AROUND 5% MARK.
LETS SAY YOU INVEST Rs 100/- FOR A YEAR . AT THE YEAR END YOU WILL GET BACK Rs 110/-. BUT THE INFLATION IS ITSELF 5%, SO THE TRUE VALUE COMES OUT BE ONLY Rs 105/-,THUS YOUR NET PROFIT IS JUST 5% .
THUS TODAYS Rs 100/- ARE GOING TO BE WORTH ONLY Rs 95/- IN THE NEXT YEAR,OR IN OTHER WORDS FOR SOMETHING WORTH Rs 100/- THIS YEAR ,NEXT YEAR YOU WILL NEED TO SHELL OUT Rs 105/-.

AS AGAINST ALL THIS, SHARES OFFER YOU 15 -18% INTEREST PER ANNUM,AND THERES NO NEED TO EXPLAIN THAT YOU WILL END UP EARNING MORE.TO ADD TO IT YOU HAVE GREAT LIQUIDITY,WHICH HELPS YOU WITHDRAW OR REINVEST AS AND WHEN YOU NEED.

SOME IMPORTANT TERMS

THE LAST POST OF MINE MENTIONED FPO AND I LEFT IT WITHOUT EXPLANATION.THE ONLY REASON BEHIND IT WAS THAT I WISHED TO SEGREGATE ALL THESE ABBREVIATIONS SO THAT YOU DON'T MISS ANY.

SO HERE WE GO

1.FPO:
FPO STANDS FOR FOLLOW-ON PUBLIC OFFER.ITS THE NEXT STEP FROM IPO . WHEN A COMPANY WHOSE STOCKS ARE ALREADY LISTED ,MAKES A SECOND OFFER TO THE PUBLIC TO BUY THEIR SHARES DIRECTLY,THEN IT IS TERMED AS FOLLOW-ON PUBLIC OFFER.

SAY FOR EXAMPLE , BEML AND ICICI BOTH ARE LISTED ON THE SENSEX/NIFTY SO THE LATEST PUBLIC OFFERING OF THEIR SHARES IS THE SECOND IN LINE OF THEIR IPO, AND HENCE IS TERMED AS FPO. COMPANIES MAKE USE OF FPO TO RAISE HUGE FUNDS AT ONE GO ,BY OFFERING A PRICE LOWER THAN THE ONE AVAILABLE AT THE EXCHANGE,THUS IT IS BENEFICIAL BOTH FOR THE COMPANY AND THE BUYER.

2.FII:
FII OR FOREIGN INSTITUTIONAL INVESTORS ARE FOREIGN FINANCE COMPANIES WHO INVEST IN THE SHARE MARKET.THEY RULE THE ROOST BECAUSE OF THE HEAVY FUND INFLUX THEY BRING ALONG.

3.FDI:
FDI STANDS FOR FOREIGN DIRECT INVESTMENT.HERE THE FOREIGN INVESTORS ARE ACTIVE PARTNERS OF THE COMPANY WHOSE SHARES THEY HOLD.

4.JV:
ITS THE TERM IN FASHION NOW-A-DAYS.JV IS ABBREVIATION FOR JOINT VENTURE.
WHEN TWO COMPANIES (MAINLY RIVALS) ALLY TO MAKE A NEW COMBINED COMPANY,MOSTLY TO TAKE ON COMPETITION,THEN A JOINT VENTURE RESULTS.
Eg TATA-JOHNSON , TATA-FICOSA , BHARTI-WALMART , HUTCHISSON-ESSAR , etc.

5.PSUs:
THESE ARE PUBLIC SECTOR UNITS i:e COMPANIES OWNED BY THE GOVERNMENT.
Eg HPCL,BPCL,ONGC,SBI etc

THERE ARE MANY SUCH TERMS WHICH JUST KEEP ON CROPPING UP HERE AND THERE.MOSTLY ITS THE PRINT MEDIA WHICH MAKES THESE ABBREVIATION SO THAT ITS EASIER TO PRINT THEM.I WILL KEEP YOU UPDATED ON MANY SUCH ABBREVIATION PERIODICALLY.
YOU OBVIOUSLY CAN MAIL ME ANY QUERIES TO MY E-MAIL I.D
belose_sanket@yahoo.co.in

WATCH OUT

RECENTLY THERE HAVE BEEN SOME DULL DAYS IN THE MARKET,WITH BOTH SENSEX AND NIFTY COMING OUT FLAT.VOLATILITY , ESSENTIAL TO MAKE GOOD PROFITS (EVEN LOSSES) SEEMS TO BE ABSENT.IN SUCH CASES IT IS ALWAYS WISE TO WAIT FOR THE RIGHT OPPORTUNITY,AND INVEST IN LONG TERM STOCKS.

THE FOLLOWING ACTIVITIES IN THE PAST WEEK SHOULDN'T REALLY BE MISSED OUT:

1.IF YOU ALL HAVE BEEN READING THE NEWSPAPERS (ESPECIALLY BUSINESS SECTION) THEN YOU MIGHT HAVE HEARD OF THE FM's (FINANCE MINISTER) ANNOUNCEMENT OF INCREASING THE BUFFER STOCK OF SUGAR. NOW THAT SOUNDS TOO SWEET FOR THE SUGAR MANUFACTURERS AND FOR COMMON INVESTORS LIKE US ITS TIME TO HUNT FOR THEIR SHARES.

2.AS I SAID BEFORE , MONSOON ALWAYS CAUSES DESTRUCTION ALL OVER INDIA (ALREADY IT HAS AFFECTED ANDHRA PRADESH AND MAHARASHTRA) AND SO CEMENT SHARE PRICES ARE TO BE WATCHED KEENLY.HAVING SHARES OF CEMENTS AND SUGAR COMPANIES IN YOUR PROFILE WILL BE AN ADDED ADVANTAGE IN NEAR FUTURE..

3.BEML (BHARAT EARTH MOVING LIMITED) IS COMING UP WITH AN FPO* WHICH HAS SET THE BELLS RINGING.THE PRICE BAND BEING Rs 1020 TO 1100/- MAY APPEAR TOO HIGH BUT IF YOU SEE THE CURRENT PRICE OF THEIR SHARES (Rs 1185/- AS OF TODAY) YOU REALIZE THAT IT CERTAINLY IS A GOOD DEAL.

TO ADD TO IT THEY ARE EXPECTED TO GRAB AN ORDER FOR METRO RAIL CARRIAGES .THE METRO PROJECT BEING IMPLEMENTED IN MUMBAI , DELHI AND BANGALORE MAY RAKE UP HUGE ORDERS FOR METRO CARRIAGES .
JUST TO INFORM YOU,A SINGLE METRO RAIL CARRIAGE COSTS AROUND 1.6 TO 1.8 MILLION.

SO FRIENDS ITS ALL ABOUT KEEPING YOU EYES WIDE OPEN,BECAUSE OPPORTUNITIES ARE EVERYWHERE,JUST THE ESSENTIAL RISK NEEDS TO BE TAKEN.

*FPO ??????????? MORE SUCH TERMS AND THEIR EXPLANATION IN THE NEXT POST

INVESTMENT LOGIC - 2

KEEPING UP WITH MY SO CALLED INVESTMENT LOGIC CONCEPT,HERE ARE SOME MORE EASY EXAMPLES.

LAST TIME WE SAW HOW A FLOOD OR EVEN A MEGA EVENT PRESENTS YOU A GREAT INVESTMENT OPPORTUNITY.BUT LET ME MAKE IT CLEAR THAT OPPORTUNITIES AREN'T LIMITED TO CALAMITIES OR DEVELOPMENTS BUT THERE ARE OPPORTUNITIES GALORE WHICH WE JUST DON'T SEEM TO NOTICE. OUR EFFORT SHOULD BE TOWARDS SEIZING AS MANY OF THESE OPPORTUNITIES.

LETS TRY TO MAKE A DRAFT OF ALL SUCH SMALL OPPORTUNITIES:

1.WITH THE ARRIVAL OF DIWALI THERE IS A BUZZ IN THE COMMODITY MARKET.EVERYONE SEEMS TO BE ON A SHOPPING SPREE.RIGHT FROM NEW VEHICLES,HOUSES,CLOTHES,ELECTRONIC GOODS TO FOOD STUFFS EVERYTHING BOUGHT ,AND THAT TOO ON A LARGE SCALE .SO ITS OBVIOUS THAT COMPANIES MANUFACTURING THE ABOVE GOODS ARE GOING TO PERFORM WELL DURING THIS PERIOD.(THAT'S THE REASON WHY WE DON'T HAVE DISCOUNT OFFERS DURING THIS VERY PERIOD)

2.WITH ELECTIONS APPROACHING THE SHARE MARKET TOO EXPERIENCES WINDS OF CHANGE. A CHANGE IN GOVERNMENT IMPLIES A CHANGE IN POLICY.THE NEW POLICY MAY SUIT SOME SECTORS WHILE IT MAY ADVERSELY AFFECT OTHER SECTORS. THE PRICES OF COMPANY SHARES ARE BOUND TO VARY ACCORDINGLY.

3.ANNOUNCEMENT OF BUDGET IS THE MOST VOLATILE TIME FOR THE SHARE MARKET. INCREASED OR DECREASED TAXES HAVE A HUGE IMPACT ON SHARE PRICES.

4.EVEN MERGERS,ACQUISITIONS ,SPLITS OF VARIOUS COMPANIES PROVE TO BE A MAJOR FACTOR.

5.SOMETIMES EVEN A PUBLIC STATEMENT FROM THE FINANCE MINISTER TOO PROVES SUFFICIENT FOR HECTIC ACTIVITY IN THE MARKET.

YOU MIGHT REALIZE THAT THERE ARE MANY SUCH OPPORTUNITIES IF YOU HAVE THAT CHANNEL OF THINKING.SCRUTINIZE EVERY BIT OF IMPORTANT NEWS TO SEE HOW YOU CAN MAKE USE OF IT.

INVESTMENT LOGIC

"INVESTMENT LOGIC", LET THE TITLE NOT SCARE YOU,I CERTAINLY AM NOT GOING TO GIVE A MANAGEMENT LECTURE TODAY.INVESTMENT LOGIC IS MY TERM FOR THE THOUGHT TO BE PUT IN BEHIND INVESTMENT. YOU CERTAINLY MIGHT HAVE USED IT AT LEAST ONCE TILL NOW. SAY FOR EXAMPLE YOU BUY CLOTHES IN AN OFF-SEASON SALE,THAT SAVES YOU MONEY, SO THIS IS PLAIN LOGIC,THE ONLY THING IS THAT HERE YOU ARE SAVING RATHER THAN INVESTING .SO HOW TO APPLY THE SAME LOGIC TOWARDS STOCK MARKET.AS USUAL I HAVE AN EXAMPLE UP MY SLEEVE. LETS SAY THAT IT RAINS HEAVILY THIS YEAR AND IT FLOODS ALL OVER INDIA(I HOPE IT DOESN'T).NOW THIS IS A CALAMITY AND BRINGS ALONG HUGE AMOUNT OF HUMAN AS WELL AS INFRASTRUCTURAL LOSS.THE SHARE MARKET DWINDLES AS A RESULT(SINCE ALL KIND OF TRADE IS AFFECTED).BUT THERE IS ANOTHER SIDE TO THE COIN.THIS MASSIVE DESTRUCTION WILL GENERATE MASSIVE DEVELOPMENT OPPORTUNITY.BETTER INFRASTRUCTURE NEEDS TO BE CREATED TO AVOID THE RECURRENCE.THUS IF NEW ROADS,NEW COLONIES,NEW DAMS,DUCTS AND SEWAGE LINES ARE TO BE CONSTRUCTED THEN THE INFRASTRUCTURAL COMPANIES ARE GOING TO GET WHOLE LOT OF WORK,WHICH IMPLIES PROGRESS OR GROWTH FOR THESE COMPANIES.SO IF YOU INVEST IN INFRASTRUCTURE COMPANY DURING THE FLOODS AND IF IT GETS A HUGE DEVELOPMENT CONTRACT THEN YOU CERTAINLY ARE GOING TO PROFIT THE MOST.THE SAME CAN BE TRUE FOR CEMENT AND STEEL MANUFACTURERS AS WELL. I CAN GIVE YOU A LOT PLEASING EXAMPLE RATHER THAN THE FLOOD ONE. INDIA IS ORGANIZING THE 2010 COMMON WEALTH GAMES.THIS EVENT HAS GIVEN RISE TO VARIOUS NEEDS LIKE HUGE STADIUMS,ATHLETE'S VILLAGE,GOOD ROAD CONNECTIVITY,A GOOD TRANSPORT SYSTEM, URBAN DEVELOPMENT WORKS ,etc. NOW WHO ARE GOING TO BENEFIT FROM IT? OBVIOUSLY INFRASTRUCTURAL COMPANIES,STEEL MANUFACTURERS,CEMENT MANUFACTURERS ARE GOING TO BE THE PRIME BENEFICIARIES SO ISN'T IT WISE TO INVEST IN THEM DURING THAT PERIOD? SO EVEN THOUGH I CALL IT INVESTMENT LOGIC ITS PURE COMMON SENSE,YOU JUST NEED TO KEEP YOU EYES WIDE OPEN TO GRAB THE OPPORTUNITY .

WHAT NEXT?

WELL IF THATS THE QUESTION ARISING IN YOUR MIND THEN THIS POST OF MINE SHOULD ANSWER IT.

YOU HAVE OPENED THE DEMAT ACCOUNT,SOME OF YOU MIGHT HAVE APPLIED FOR IPOs AND WAITING FOR THEIR LISTING, AND SOME MIGHT BE JUST DRAWING A BLANK LOOK.ITS QUITE OBVIOUS THAT YOU FEEL LOST.WITH THE HEAVY INFLUX OF INFORMATION ON T.V YOU CERTAINLY GET CONFUSED.MY SIMPLE TECHNIQUE TOO GET THROUGH THIS IS,LISTENING TO YOUR MIND AND DEPENDING ON YOUR RESEARCH.

I WILL, AS USUAL, PROVIDE YOU A SMALL EXAMPLE AS TO WHAT YOU NEED TO DO.
IF YOU HAVE AN ONLINE ACCOUNT,THEN THIS WORKS THE BEST.
LIST DOWN TEN(EVEN MORE COULD DO) COMPANIES WHICH YOU FEEL ARE EVERGREEN OR WHICH ARE MAJOR PLAYERS IN THEIR RESPECTIVE FIELD.LIST THEM IN YOUR ONLINE ACCOUNT AND FOLLOW THEM CLOSELY DAY IN DAY OUT.BUY THEIR SHARES WHEN THE PRICE GOES DOWN CONSIDERABLY,VICE - VERSA SELL THEM WHEN THE PRICE RISES TO EARN PROFIT.

NOW WHY DID I TELL YOU TO SELECT SOME REALLY BIG COMPANIES? BECAUSE EVEN IF THERE IS SLIGHT UP AND DOWN IN THEIR PRICES,THEY DO SHOW A STEADY RISE OVER A PERIOD OF TIME.
COMPANIES LIKE RELIANCE INDUSTRIES,INFOSYS TECHNOLOGIES, TECH-MAHINDRA , BHARTI AIRTEL, LARSON AND TUBRO, HLL, ITC, TELCO,BAJAJ, ETC HAVE GARNERED GREAT TRUST OVER DECADES AND ARE EXPANDING WORLD OVER.BUYING THEIR SHARES WHEN AVAILABLE AT LOWER PRICES AND SELLING THEM OFF AT HIGHER PRICES IS THE SAFEST BET.
YOU WON'T BELIEVE IF I TELL YOU THAT INFOSYS'S SHARE WHICH IS CURRENTLY PRICED AT AROUND Rs 2000/- WAS INITIALLY PRICED BELOW Rs 100/- ONLY , THAT MEANS THE NET WORTH IS 20 TIMES MORE NOW.

HOW TO SELECT THESE COMPANIES?
ITS THE EASIEST ,BIG COMPANIES ARE THOSE WHICH HAVE GREAT DAY TO DAY PRESENCE IN YOUR LIFE.YOU SEE BAJAJ'S BIKES EVERYWHERE,MARUTI CARS ARE OMNIPRESENT,AIRTEL IS RULING THE MOBILE NETWORK,TATAS HAVE PRESENCE EVERYWHERE FROM CARS,BUSES,TEA AND WHAT NOT.
YOU KEEP ON HEARING ABOUT LARSON AND TUBRO BUILDING HUGE PROJECTS,AMBANI BROTHERS ACQUIRING NEW COMPANIES,etc.
THATS WHAT BIG COMPANIES HAVE ,WHAT I CALL AS,"A BIG PRESENCE"

ITS RAINING IPOs

WELL THE MONSOON MIGHT BE GIVING A DITCH TO EVERYONE BUT ITS RAINING IPOs LITERALLY.AS IF DLF AND VISHAL RETAIL IPOs OPENING ON THE SAME DAY WASN'T ENOUGH WE HAVE ICICI JOINING THE WAGON.THEY WOULD BE OUT WITH THEIR IPOs PRETTY SOON,AND THE MARKET IS ALREADY BUZZING WITH EXCITEMENT.
PART OF THE EXCITEMENT CAN BE REDEEMED BY THE FACT THAT THE NAME ICICI ITSELF HAS GAINED A LOT OF TRUST WHICH WILL REFLECT IN THE IPOs PERFORMANCE.

BUT LEAVING ASIDE THE BRAND VALUE OF ICICI ,THIS IPO FOR THE FIRST TIME OFFERS AN UNIQUE OPPORTUNITY FOR RETAIL INVESTORS ( i:e SMALL INVESTORS LIKE YOU AND ME).IT HAS SOME LUCRATIVE OFFERINGS WHICH JUST CAN'T BE OVERLOOKED , HERE ARE SOME OF THEM TO CHEW ON

1.THE PRICE OF THE SHARE CAN BE PAID IN INSTALLMENTS( THIS BANKING PEOPLE CAN SELL ANYTHING IN INSTALLMENTS).THUS WE THE VALUE OF EACH SHARE TURNS OUR TO BE Rs 800/- (JUST AN EXAMPLE) YOU CAN PAY FIRST INSTALLMENT OF Rs 250/- WHILE BIDDING, SECOND INSTALLMENT OF Rs 250/- ON RECEIVING THE SHARES,AND THE PENDING AMOUNT ANYTIME WITHIN THE NEXT SIX MONTHS.

ICICI WILL DECLARE THE PRICE BAND ON 18TH JUNE,WHICH WILL GIVE US A BETTER PICTURE.EVEN THOUGH THE NUMBERS MIGHT CHANGE THE BASIC TRANSACTION WOULD REMAIN SAME.

2.TO ADD TO THE EASY INSTALLMENTS OPTION,RETAIL INVESTORS AND OLD SHARE HOLDERS HAVE BEEN OFFERED 5% DISCOUNT.EVEN IF ITS JUST 5% IT TRANSPIRES TO QUITE A LOT LATER.

AS THE OFFER GOES PUBLIC FURTHER DETAILS WILL TRANSPIRE AND I SURELY WILL LET YOU KNOW.FOR NOW YOU COULDN'T HAVE ASKED FOR A BETTER START TO YOUR TRADING CAREER.

IN THE THICK OF THE THINGS

WELL THE DLF IPO HAS GOT A GOOD RESPONSE EVEN THOUGH EXPERTS ARE QUITE SKEPTIC ABOUT IT.ANOTHER IPO THAT OF VISHAL RETAIL TOO HAS OPENED ON THE SAME DAY AND IS GENERATING GOOD INTERST,YOU CAN APPLY FOR THE SAME USING THE SAME PROCEDURE AS USED FOR DLF.

NOW HOPEFULLY YOU MIGHT BE FOLLOWING THE MARKET PROCEEDINGS REGULARLY.INITIALLY I SUGGEST YOU TO OPT FOR IPOs , SHORT TERM DELIVERY,LONG TERM DELIVERY etc UNTIL YOU GET THE FEEL OF THE MARKET.
EVEN THOUGH MAXIMUM PROFIT IS THROUGH INTRA-DAY TRADING IT IS NOT ADVISABLE TO INDULGE IN IT RIGHT AT THE START.

SO HOW SHOULD YOU APPROACH SHARE MARKET AS OF NOW?

I SUGGEST YOU INVEST TIME IN LEARNING THE TREND OF THE MARKET,READ EXPERT OPINIONS,TECHNICAL REPORTS,etc( ALL THESE ARE FREELY AVAILABLE FOR THOSE OPTING FOR AN ONLINE TRADING ACCOUNT).
IF YOU WISH TO BUY SOME SHARES THEN WAIT FOR THE RIGHT OPPORTUNITY.REMEMBER BUYING WHEN THE MARKET DWINDLES ALLOWS YOU TO GET SHARES AT THE CHEAPEST,AND SELLING THE SAME SHARES WHEN MARKET SOARS EARNS YOU THE MAXIMUM PROFIT.

BULLS AND BEARS:

I STILL CAN'T BELIEVE THAT I MISSED THIS POINT.
BULLS AND BEARS ARE THE TERMS USED TO EXPLAIN THE TREND IN THE MARKET.WHEN THE MARKET RISES ABOVE PREVIOUS DAYS CLOSE THEN ,THE TREND IS SAID TO BE BULLISH,AND IF THE MARKET FALLS THEN THE TREND IS SAID TO BE BEARISH.THUS A BULL SIGNIFIES THE RISE WHILE BEAR IMPLIES FALL.

GREAT START

WELL TODAY WE BEGIN TO ACTUALLY WATCH THE MARKET AND WHAT A COINCIDENCE ,DLF'S IPO(INITIAL PUBLIC OFFER) TOO HAS OPENED RIGHT TODAY.
IPO PRESENTS US THE BEST OPPORTUNITY TO BUY SHARES OF A PARTICULAR COMPANY.IF YOU READ DLF'F ADVERTISEMENT IN THE NEWSPAPER TODAY THEN YOU GET A FAIR IDEA OF THE IPO.

LET ME SUMMARISE THE IPO FOR YOU(IT WOULD BE OF GREAT HELP IF YOU KEEP THE ADVERTISEMENT ASIDE YOU JUST NOW).SOME IMPORTANT POINTS ARE JOTTED BELOW
1.DLF LIMITED:
THE IPO HAS BEEN BROUGHT OUT BY A COMPANY NAMED DLF LIMITED.IT IS INVOLVED IN LARGE INFRASTRUCTURAL PROJECTS.
REMEMBER SHAHRUKH KHAN'S AD OR EVEN BETTER THE DLF CUP HELD BETWEEN INDIA,AUSTRALIA AND WEST INDIES RECENTLY.

2.PRICE BAND Rs 500 /-TO Rs 550/- PER SHARE OF FACE VALUE Rs2/-:
THIS MEANS THAT THE SHARE CAN BE BOUGHT AT THE LOWEST OF Rs 500/- AND NOT BEYOND Rs 550/-.THE FACE VALUE SIGNIFIES THE VALUE ON WHICH DIVIDEND WILL BE DECLARED.

3.BIDS CAN BE MADE FOR A MINIMUM OF 10 SHARES AND IN MULTIPLES OF 10 SHARES THEREAFTER:
THIS MEANS YOU CAN BUY 10,20,30,... SHARES AT A TIME.ODD NUMBERS LIKE 5,15,25 ETC AREN'T PERMITTED.

4.BID/ISSUE OPENS TODAY CLOSES ON JUNE 14,2007:
PRETTY STRAIGHT FORWARD,THIS MEANS THAT YOU CAN SUBMIT YOUR APPLICATION FROM TODAY UP TO 14TH OF JUNE (i:e WITHIN THESE FOUR DAYS).

5.HOW TO APPLY?
ITS EASY,GO TO ANY NEAREST SHARE BROKER AND PICK-UP THE FORM(ABSOLUTELY FREE).FILL THE FORM CONSULTING YOUR BROKER AND ATTACH WITH IT A CHEQUE FROM YOUR SAVINGS ACCOUNT AND YOUR PAN CARD'S XEROX COPY.

6.DOES EVERY ONE GETS THE SHARES?
NO,NOT EVERY WHO APPLIES GETS THE SHARES.IT DEPENDS UPON WHAT VALUE YOU APPLY FOR ,HOW MUCH QUANTITY YOU APPLY FOR AND HOW CORRECTLY YOU FILL THE FORM.
FOR INSTANCE HERE THE PRICE BAND IS Rs 500 TO Rs 550/-.THE SHARES WILL BE ULTIMATELY SOLD FOR SOME VALUE IN BETWEEN THE ABOVE TWO VALUES.

SO HOW ARE YOU SUPPOSED TO GUESS THE RIGHT VALUE?
THE EASIEST WAY IS TO LEAVE THE GUESSING TO THE COMPANY,BY SELECTING THE CUT-OFF OPTION.CUT-OFF MEANS THAT YOU ARE READY TO BUY THE SHARES AT WHATEVER VALUE THEY ARE AVAILABLE.

STILL NOT GETTING IT?
YOU CERTAINLY ARE BOUND TO GET CONFUSED BECAUSE OF THE HEAVY INFLUX OF INFORMATION,SO AS USUAL I WILL EXPLAIN WITH A EXAMPLE.

1.SAY I HAVE DECIDED TO APPLY FOR DLF'S IPO.
2.I WILL GO TO ANY NEAREST BROKER AND GET A APPLICATION FORM.
3.I WILL FILL THE FORM PROVIDING ALL NECESSARY DETAILS.
4.NOW I WANT TO BUY 20 SHARES,AT WHAT PRICE SHOULD I BID?
I WILL SELECT THE CUT-OFF OPTION,THAT MEANS I AM READY TO PAY WHATEVER THE FINAL VALUE IS.
5.WHEN I SELECT CUT-OFF OPTION I WILL HAVE TO PROVIDE THE FUND FOR THE SAME.
HERE THE MAXIMUM VALUE IS Rs 550/- AND I HAVE TO BUY 20 SHARES SO I WILL GIVE MY BROKER A CHEQUE OF Rs 11,000/-(550 * 20 = 11,000).
IF THE SHARES ARE FINALLY SOLD AT Rs 530/- ONLY , THEN I WILL GET A REFUND OF Rs 20/- FOR EACH SHARE i:e 20*20 = Rs 400/-.
THIS IS QUITE A SAFE OPTION AND I CAN ASSURE YOU THAT YOU DO GET YOUR MONEY BACK.
6.JUST IN CASE YOU DON'T GET ANY SHARES AT ALL ,THEN YOUR COMPLETE AMOUNT IS REFUNDED TO YOU (MOSTLY WITHIN A FORTNIGHT,BUT DEPENDS UPON WHERE YOU RESIDE).

BETTER ASK THE FOLLOWING QUESTION TO YOUR SELF?
a.DO I REALLY KNOW THE COMPANY (DLF IN THIS CASE) OR I AM JUST TRUSTING TITS AND BITS INFORMATION?
b.DO I HAVE THE LIQUIDITY OF FUNDS?
C.AM I CONFIDENT ENOUGH TO COMPLETE THE TRANSACTION ON MY OWN?
DO NOT BE ASHAMED OF ASKING YOUR BROKER THE SIMPLEST OF THE THINGS,HE IS THERE ONLY TO HELP YOU(RATHER YOU PAY HIM TO DO SO)

WELL YOU CAN CERTAINLY GIVE THIS IPO A TRY,BUT AS I SAID PREVIOUSLY DO NOT LISTEN TO ANY TIPS,DO THE RESEARCH ON YOUR OWN AND THEN DECIDE TO INVEST,BECAUSE THE MONEY INVOLVED IS ALL YOURS.

LETS PAD-UP

AS I MENTIONED IN THE PREVIOUS POST ITS TIME FOR ACTION.
ONLY THOSE WITH A DEMAT ACCOUNT CAN BE PART OF THE ACTION THOUGH,OTHERS NEED TO CATCH UP.

STARTING THIS MONDAY (11th JUNE 2007) WE WILL CLOSELY SCRUTINIZE THE MARKET AND SEARCH FOR OPPORTUNITIES.YOU VERY CERTAINLY WILL EARN MONEY,THE ONLY ISSUE IS WHEN AND HOW MUCH.THE ANSWER TO THIS QUESTION LIES IN YOUR CAPABILITY TO TAKE WELL CALCULATED RISKS.THE DEEPER YOU RESEARCH BEFORE INVESTING THE BETTER THE RESULTS ARE BOUND TO BE.

SO BEFORE BEGINNING TO ACTUALLY TRADE REMEMBER FOLLOWING THUMB RULES.
1.IN SHARES YOU DO NOT EARN UNTIL YOU SELL i:e IF YOU SIT ON THE SHARES JUST LIKE A HEN DOES ON HER EGGS,THEN YOU CERTAINLY AREN'T GOING TO MAKE A PENNY(THE HEN MIGHT AT LEAST GET CHICKS).THE MAJOR EARNING THROUGH SHARES IS THE DIFFERENCE IN THE SHARE PRICES FROM THE TIME YOU BOUGHT IT TO THE TIME YOU WILL SELL IT.

2.REMEMBER THAT INTRA-DAY EARNS YOU THE MAXIMUM PROFIT,AS IT INVOLVES THE MAXIMUM RISK.FIRST GET WELL ACQUAINTED WITH THE MARKET'S PROCEEDING BEFORE INDULGING INTO INTRA-DAY.

3.KEEP A CLOSE TABS OF YOUR TRANSACTIONS.REGULARLY UPDATE YOUR SAVINGS PASSBOOK TO RECORD THE AMOUNT DEDUCTED TIME TO TIME.

4.REMEMBER THAT TRANSACTION ISN'T VALID UNTIL AND UNLESS YOU GET THE CONTRACT NOTE IN YOUR HAND.ALWAYS INSIST FOR A CONTRACT NOTE FROM THE BROKER,IF YOU GET A SOFT COPY THEN GET A PRINT OUT DONE.

5.MAKE A NEW FILE (A PHYSICAL FILE,NOT THE ONE IN YOU COMPUTER) TO PRESERVE ALL RELATED DOCUMENTS.

6.BE IN CONSTANT TOUCH WITH YOUR BROKER.

7.AND THE MOST IMPORTANT ONE,DO NOT BELIEVE IN SO CALLED TIPS GIVEN BY ANYONE (NOT EVEN MINE) BECAUSE THE MONEY INVOLVED IS YOURS .
DO THROUGH RESEARCH WORK,LISTEN TO EXPERTS COMMENT ON T.V AND THEN ONLY INVEST.

REALITY CHECK

WELL THE HEADING ITSELF TELLS YOU A LOT ABOUT THIS POST OF MINE. JUST ASK YOURSELF THE FOLLOWING QUESTIONS

1.AM I READING THE BUSINESS SECTION OF THE NEWSPAPER DAILY?
2.AM I AT LEAST TRYING TO FIGURE OUT WHAT THE LISTINGS IMPLY?
3.AM I VIEWING BUSINESS CHANNELS REGULARLY?
4.HAVE I OPENED A DEMAT ACCOUNT OR AT LEAST GOT MY PAN CARD?
AND MOST IMPORTANTLY
5.AM I TALKING BUSINESS?

NOW UNFORTUNATELY IF ANSWERS TO ALL THE FIVE QUESTIONS ARE NEGATIVE,THEN YOU ARE WASTING YOU GOOD TIME.
IF SOME QUESTIONS ARE GENERATING A POSITIVE REPLY THEN YOU ARE ON THE WAY BUT NEED SOME CATCHING UP .
AND JUST IN CASE ALL THE ANSWERS ARE AFFIRMATIVE (QUITE A RARE INCIDENT) THEN MATE YOU ARE VERY SOON GOING TO TRADE ALONG ME AND START EARNING.

FOR THE REST OF THE GUYS ITS TIME TO DO THE SO CALLED REALITY CHECK,BECAUSE FROM HERE ON I AM TRYING TO TEACH YOU EVERYTHING DIRECTLY WITH REFERENCE TO THE MARKET HAPPENINGS.

SO ARE YOU READY FOR THE ACTION?

HANDS DOWN

WELL THIS POST TOO TOOK A WHILE TO COME,AND AS USUAL I HAVE COME UP WITH A CONCRETE JUSTIFICATION (I AM GETTING GOOD AT MAKING EXCUSES).

I HAD MENTIONED ABOUT PROVIDING YOU ALL SIMPLE SKETCHES TO ASSIST YOUR UNDERSTANDING.I HAVE MADE SOME BUT GETTING THEM POSTED ON MY BLOG IS PROVING A HELL OF A TASK FOR ME ,HOPE I GET OVER IT SWIFTLY.

CONTINUING WITH WHERE WE LEFT , NEWSPAPERS THUS PROVIDE YOU WITH ALL KINDS OF DETAILS OF THE PREVIOUS DAYS' TRANSACTION.THERE ARE STILL A FEW TERMS LEFT BUT YOU WILL GRASP THOSE ONLY WHEN YOU GET INVOLVED.

NOW HOW TO GET LIVE INFORMATION ABOUT THE PROCEEDINGS OF THE MARKET?

ITS EASY FOLKS,SWITCH ON YOUR TV OR INTERNET CONNECTION.
SUPPOSING THAT NOT MANY HAVE NET CONNECTIONS AT HOME (OR SOME HAVE BROADBAND CONNECTIONS WHICH WORK LIKE DIAL-UP) TV EMERGES AS THE BEST OPTION.

IF YOU ASK ME ,THEN THE IDIOT BOX IS A FAR BETTER MEDIUM THAN THE INTELLIGENT BOX.INTERNET PROVIDES YOU ALL THE NUMBERS ,CHARTS ,REPORTS,ETC BUT ALONG WITH THIS T.V PROVIDES YOU EXPERT'S COMMENTS,OTHER IMPORTANT HAPPENINGS WHICH MAY AFFECT THE MARKET TOO.

SO BETTER IF YOU SCROLL YOU T.V SETS AND GET ALL BUSINESS CHANNELS LIKE CNBC18,NDTV PROFIT,Z BUSINESS,ETC TUNED IN .INITIALLY IT MAY FEEL BORING,BUT A BIT OF PERSISTENCE WILL HELP GENERATE YOUR INTEREST.