sharemarket made easy

WORK IN PROGRESS

2007-09-01T05:22:00.000-07:00

HI THERE,ITS BEEN A MONTH SINCE I LAST POSTED AND THERES A GREAT REASON BEHIND IT TOO.

VERY SOON (WITHIN A MONTH OR TWO) I WOULD BE STARTING MY VERY OWN WEBSITE DEDICATED TO THE SAME TOPIC.IT WILL HAVE LOADS OF NEW FEATURES AND WILL CARRY LOT MORE INFORMATION.

HOPE TO BE BACK AT YOUR SERVICE WITH A BIGGER PLATFORM TO BOOT

REVERSING SWING

2007-08-04T22:14:00.000-07:00

THE ONGOING INDIA-ENGLAND TEST SERIES MIGHT SEEM TO INFLUENCE THE MARKETS TOO. SIMILAR TO THE TEST MATCHES FORTUNES ARE SWINGING BY THE MINUTE.

THE SENSEX SEEMED TO BE IN PITS BY SHEDDING ALMOST OVER 600 POINTS IN A DAY,RESULTING IN FRANTIC ACTIVITY.MANY NEWBIES OR GREEN HORNS MAY HAVE ALREADY TAKEN A SHOCK OF THEIR LIFE ,BUT THE BULL IS AGAIN BACK IN THE RING WHICH MAY EASE MANY TENSE NERVES. AS MENTIONED EARLIER THE DWINDLING MARKET SHOULD BE SEEN AS AN EXCELLENT BUYING OPPORTUNITY AND THOSE WHO
EN CASHED IT WILL SEE THE PROFITS SOON.

A PERFECT EXAMPLE OF THIS CAN BE THE SHARE PRICES OF KOTHARI PRODUCTS (THE MAKERS OF PAN PARAG).IN JULY THE SHARE WAS HANDSOMELY PRICED AT ABOVE Rs 1100/- WHILE THE DELUGE HAS LEFT IT WITH A VALUE OF Rs 780/- ONLY.NOW THE JULY BULL RUN HAS GIVEN A FAIR IDEA ABOUT THE POTENTIAL OF THE SHARE AND IT WON'T BE ALL THAT A BAD IDEA TO TAKE THE PLUNGE RIGHT NOW .

I STILL INSIST THAT YOU USE THE INVEST LOGIC WE DISCUSSED BEFORE TO PICK YOUR SHARES.ONE MORE THING YOU SHOULD CONSIDER IS THE DURATION OF YOUR INVESTMENT . WHETHER YOU WISH TO HAVE A LONG TERM OR SHORT TERM INVESTMENT DOES AFFECT THE SHARES YOU BUY.

A COME-BACK ?

2007-07-30T21:34:00.001-07:00

AFTER TWO DAYS OF DELUGE (LAST THURSDAY AND FRIDAY) THE MARKET WAS FINALLY IN THE GREEN YESTERDAY ,THOUGH BY JUST A FEW. MANY FEEL THAT THE CORRECTION WAS DUE AND WE MIGHT HAVE JUST SEEN OFF THE WORST.

THE MARKET WAS PULLED BACK BY MOSTLY TWO BIG EVENTS YESTERDAY
(30TH OF JUNE)

1.RELIANCE ENERGY BAGGED THE SASAN POWER PROJECT .
THE SASAN PROJECT WAS IN THE CENTRE OF CONTROVERSY THIS WEEK DUE TO THE DISQUALIFICATION OF LANCO WHO WAS THE LOWEST BIDDER FOR PER KILO WATT OF POWER.THE COMPANY WAS LEFT RED IN THE FACE AND SO SPLASHED THEIR BID FOR THE SAME ALL OVER THE NATIONAL NEWS-PAPERS.
RELIANCE ENERGY BEING FROM THE RELIANCE PACK IS PERFORMING QUITE WELL AND MAY BE THE STOCK TO LOOK OUT FOR.

2.THE SECOND MAJOR EVENT WAS HINDUSTAN UNILEVER LTD i:e HUL (FORMERLY HINDUSTAN LEVER LTD) DECLARING A BUY BACK OF ABOUT ONE CRORE SHARES.
THE BUY BACK PRICE WAS FIXED AT Rs 230/- PER SHARE,WHILE THE SHARE WAS AT AROUND Rs 198/- ON THE WEEKEND.
THE PROCEEDINGS GENERATED A HECTIC BUYING SCHEDULE FROM INVESTORS WHICH MADE THE STOCK GO UP BY ALMOST 6%

EVEN THOUGH YOUR SHARES MAY NOT GO FOR Rs 230/- THERES A FAIR CHANCE OF THEM TOUCHING RS 220/- THUS GENERATING YOU PROFITS.
SHORT SELLING HULs SHARES CAN PROVIDE YOU SOME QUICK BUCKS IN THE COMING WEEK OR SO.

HEAVY DISCOUNTS !!!!!!!!!!!!

2007-07-26T23:44:00.000-07:00

WELL , WELL, WELL AFTER DAYS AND DAYS OF THE BULL RUN WILL ARE FINALLY SEEING THE BEAR BACK IN ACTION.AND FOLKS IF YOUR HEART BEAT IS SKIPPING DUE TO THE DWINDLING PRICE OF YOUR SHARES THEN JUST LEAVE CAUTION TO THE WIND.

THE MARKET HAD SOARED QUITE HIGH AND WAS CERTAINLY EXPECTING A CORRECTION.THE WESTERN MARKETS TOO INFLUENCED HEAVILY AND SO WE ARE SEEING THE DECLINE.

BUT IF YOU HAVE THE INSTINCTS THEN YOU MAY REALIZE THAT THIS IS A GREAT OPPORTUNITY TO BUY MANY SHARES AND THAT TOO AT A DISCOUNTED PRICE .THE MARKET CERTAINLY WILL BOUNCE BACK VERY SOON. AS I HAVE MENTIONED PREVIOUSLY ALWAYS BUY AT LOWER PRICES , IT EARNS YOU GOOD MARGINS.

THE SENSEX IS EXPECTED TO TOUCH ATLEAST16500 BY THE FIRST QUARTER OF 2008 AND YOU CAN EASILY CASH ON . THE POINT LIES IN BUYING SHARES EVERY TIME THE MARKET DECLINES AND THEN SELL THEM WHENEVER IT SOARS.

*** A WORD OF CAUTION THOUGH, BUY THE SHARES WHEN THEY START SHOWING SIGNS OF BOUNCING BACK AGAIN,THIS REDUCES THE RISK INVOLVED ***

BLUE CHIP

2007-07-25T02:45:00.000-07:00

TODAYS QUESTION IS "DO YOU HAVE A BLUE CHIP IN YOUR PROFILE ?"
BY BLUE CHIP I DON'T MEAN THE SHARE OF BLUE CHIP COMPANY , BUT A TRUMP CARD IN YOUR SLEEVE.DO YOU HAVE A SHARE WHICH IS AN ACE AND DELIVERS MOST OF THE TIMES GIVING YOU GREAT RETURNS.
IF THE ANSWER IS 'NO' THEN ITS TIME YOU TRACK DOWN ONE SUCH SHARE AND BUY IT AT THE EARLIEST.

WHAT QUALITIES SHOULD YOU LOOK IN TO GRAB YOUR OWN BLUE CHIP ?
1.THE SAFEST WAY WOULD BE TO SHORT-LIST THE BEST PERFORMERS IN VARIOUS SECTORS.
2.JOT DOWN THERE CURRENT PRICE RANGE , SEE HOW WELL THEY FIT YOUR BUDGET.
3.TRACK DOWN THEIR PERFORMANCE FOR AT LEAST THE PAST ONE YEAR.
4.RESEARCH ITS AREA OF OPERATIONS AND READ EVERY POSSIBLE DEVELOPMENT NEWS RELATED TO THEM.
5.JUST IN CASE ANY OF YOUR FRIEND/RELATIVE HAS INVESTED IN THESE SHARES,ASK THEM FOR THEIR FRANK OPINION.
6.CONSULT YOUR BROKER FOR THE SAME.

IN FACT I WOULD SUGGEST THAT ONE SHOULD TRY TO HAVE MORE THAN ONE BLUE CHIP SO THAT YOUR MAJOR INVESTMENT KEEPS ON GETTING YOU GREAT PROFITS.

FOR STARTERS I HAVE A LIST OF VARIOUS SECTORS AND THE RESPECTIVE BEST PERFORMERS.
1.INFORMATION TECHNOLOGY: INFOSYS , MINDTREE
2.INFRASTRUCTURE : DLF ,UNITECH, PARSHVANATH DEVELOPERS
3.ENGINEERING : L&T, PUNJJ LLYOD
4.AUTOMOBILE : MAHINDRA & MAHINDRA, BAJAJ, TELCO
5.ENTERTAINMENT : ADLABS, BALAJI TELEFILMS
6.BANKING : ICICI , SBI
7.TELECOMMUNICATION : BHARTI AIRTEL, RELIANCE TELECOM
8.FMGC : BRITANNIA , KOTHARI PRODUCTS
9.METALS : TATA STEEL, JINDAL GROUP
10. PHARMA : RANBAXY , ELDER

THE ABOVE LIST IS JUST THE TIP OF THE MOUNTAIN,AND ACCORDING TO YOUR RESEARCH THERE MAY BE MANY MORE SECTORS AND MANY DIFFERENT LEADERS FOR THE SAME.

THE BASIC IDEA IS TO HAVE A BEST PERFORMING SHARE IN OUR PROFILE.

SOME QUERIES

2007-07-21T04:08:00.000-07:00

SOME ONE HAS POSTED A QUERY ON MY BLOG AND I AM NOT ABLE TO REACH HIM BY ANY MEANS SO I AM TRYING TO ANSWER HIM IN THIS POST,OBVIOUSLY IT WILL PROVE HELPFUL FOR OTHERS TOO.

THE QUESTION HE/SHE ASKED WAS " WHAT IS A CMP ? ".
HE HASN'T GIVEN THE EXACT REFERENCE BUT IN GENERAL CMP MEANS CURRENT MARKET PRICE, IN OTHER WORDS IT THE PRICE OF THE SHARE AT THAT PARTICULAR INSTANT. NORMALLY THE TERM LTP (LAST TRADING PRICE) IS USED IN THE SAME CONTEXT.

I AM USING THIS OPPORTUNITY TO ANSWER SOME QUERIES MY FRIENDS HAVE RAISED DURING OUR CONVERSATIONS.

1. ONE OF MY FRIEND ASKED WHETHER MONEY PAID WHILE APPLYING FOR AN IPO IS DULY RETURNED IN CASE OF NON-ALLOTMENT OF SHARES

THE ANSWER IS A DEFINITE 'YES'.
YOUR MONEY IS RETURNED CENT PERCENT,THE TRANSACTION BEING CARRIED OUT BY CHEQUE OR ECS IS A REGISTERED TRANSACTION AND SO NO ONE CAN DUPE YOU IN THE SAME.

2.IF I HAVE AN ONLINE ACCOUNT WILL I GET PHYSICAL COPIES OF THE CONTRACT NOTES ?
NO,YOU ARE MAILED THE CONTRACT NOTE NAD THERE ARE AVAILABLE LIFE LONG ON YOUR PORTAL FOR YOU TO COPY AND PRINT THEM ANYTIME.
THE BSE ANS NSE DOES POST YOU THE MONTHLY STATEMENT OF YOUR ACCOUNT.

3.DO I NEED TO PAY TAX ?
YOU SURELY COME UNDER TAX AND YOU CAN'T INVADE IT AS ALL TRANSACTIONS ARE THROUGH CHEQUE OR CASH ONLY.
INTRA-DAY ATTRACTS 30% TAX ON PROFIT , SHORT TERM DELIVERY 10% WHILE LONG TERM DELIVERY IS TAX FREE.
EVEN THE DIVIDENDS ARE TAX FREE.

BUT I WOULD LIKE TO SUGGEST YOU ALL TO KEEP THE THOUGHT OF INVADING TAX OUT OF MIND,BECAUSE IT IS CRIME.

4.WHICH ARE THE HOTTEST SECTORS CURRENTLY ?
CURRENTLY INFRASTRUCTURE,METAL,CEMENT,ENTERTAINMENT AND MEDIA SECTORS AS GOING VERY WELL.

FEEL FREE TO SEND YOUR QUERIES ON belose_sanket@yahoo.co.in

CHECK THIS OUT !!!!!!!!!

2007-07-18T20:42:00.000-07:00

THE FOLLOWING MAKES A GREAT CASE STUDY TO PROVE MY POINT OF HOW GOOD AN INVESTMENT SHARES CAN BE

1.DLF IPO OPENED ON 11TH OF JUNE 2007 AND CLOSED ON 14TH JUNE.

2.THE PRICE BAND WAS Rs 500/- TO Rs 550/- PER SHARE.

3.THE SHARES WERE ALLOTED FINALLY AT Rs 525/- EACH.

4.SO 20 SHARES WOULD HAVE COST YOU Rs 10,500/-

5.THE ISSUE GOT LISTED ON THE BSE AND NSE ON 5TH OF JULY

6.AFTER SOME INITIAL VOLATILITY IT IS RISING BY THE DAY.

7.ITS PRICE ON 18TH OF JULY WAS Rs 645/- PER SHARE.

8.SO AVERAGE PROFIT PER SHARE HAS BEEN Rs 645 - 525 = Rs 120/-

9. THEREFORE YOUR TOTAL PROFIT WOULD BE 120 * 20 = Rs. 2400/-

10.SO JUST AN INVESTMENT FOR 40-45 DAYS HAS EARNED YOU ALMOST
20 -22% PROFIT.

NOTHING DRIVES THE POINT BETTER THAN THIS.

LAGE RAHO MUTUAL FUNDS

2007-07-11T22:32:00.000-07:00

QUITE A FUNNY HEADING TO TODAYS POST,BUT I COULDN'T THINK OF ANYTHING ELSE FOR THIS SECOND POST ON MUTUAL FUNDS.

LAST TIME WE SAW WHAT THE GENERAL CONCEPT OF MUTUAL FUNDS IS ALL ABOUT.TO SUMMARIZE IT IN A SINGLE SENTENCE "MUTUAL FUND IS AN INDIRECT WAY OF INVESTING IN THE EQUITY MARKET,THROUGH THE MEDIUM OF A FINANCIAL INSTITUTION" .

MUTUAL FUNDS CAN EARN YOU MONEY IN TWO WAYS - DIVIDEND AND GROWTH.

1.DIVIDEND :
THIS IS THE AMOUNT YOUR INVESTMENT GENERATES YOU AS AN INTEREST OR IN OTHER WORDS ITS YOUR LOYALTY BONUS FOR STICKING WITH THE FINANCIAL INVESTOR.

SAY YOU INVEST Rs 50,000/- IN A MUTUAL FUND AND IT PAYS 20% DIVIDEND THE YOU ARE BOUND TO EARN Rs 10,000/- WITH YOUR INITIAL INVESTMENT REMAINING INTACT. DIVIDENDS ARE NORMALLY GIVEN ANNUALLY WHILE SOME SCHEMES OCCASIONALLY GIVE MORE THAN ONE DIVIDEND PER YEAR.
SO ITS AS GOOD AS HAVING A FIXED DEPOSIT WHICH GIVES 20% INTEREST PER ANNUM ( A RATE YOU CAN'T EVEN DREAM OF).

2.GROWTH :
IF YOU SELECT THE GROWTH OPTION THEN INSTEAD OF GETTING THE DIVIDEND YOU GET EXTRA NUMBER OF SHARE UNITS,WHICH YOU CAN EN CASH LATER.

VARIETY OF SCHEMES ARE OFFERED BY VARIOUS FINANCIAL INSTITUTIONS.MANY SCHEMES TARGET A PARTICULAR SECTOR LIKE SBI INFRASTRUCTURE FUND WAS TARGETED AT INFRASTRUCTURAL COMPANIES,SO SBI ON YOUR BEHALF WILL BE INVESTING IN INFRASTRUCTURAL COMPANY'S SHARES AND SO ON.
THERE ARE GENERALLY TWO SCHEMES OFFERED :

1.OPEN -ENDED :
AN OPEN ENDED MUTUAL FUND SCHEME ALLOWS YOU TO INVEST OR DISINVEST AS AND WHEN YOU WANT TOO.SO THERE IS 100% LIQUIDITY FOR YOUR FUNDS.

2.CLOSE-ENDED :
CLOSE ENDED MUTUAL FUNDS ON THE OTHER HAND LOCK YOUR FUNDS FOR A CERTAIN PERIOD OF TIME (CAN VARY FROM 1 YEAR TO AS LONG AS 15 YEARS) .THUS THESE SCHEMES OFFER LESS LIQUIDITY.

A SCHEME IS TO BE SELECTED KEEPING IN MIND YOUR FINANCIAL NECESSITIES IN NEAR FUTURE.THUS MUTUAL FUND OFFER YOU A SAFER OPTION TO INVEST IN STOCKS.
BUT AGAIN "MORE THE RISK MORE THE GAINS" .

MUTUAL FUNDS ANYONE?

2007-07-10T02:07:00.000-07:00

AS PROMISED IN THE LAST POST WE ARE GOING TO TAKE UP THE MUTUAL FUND ISSUE TODAY.

SO WHAT EXACTLY ARE MUTUAL FUNDS ?

LETS FIRST UNDERSTAND WHAT THE TERM ITSELF STANDS FOR.
MUTUAL FUND IS AN AGREEMENT OR PACT BETWEEN YOU AND A FINANCIAL INSTITUTION.YOU MUTUALLY AGREE TO DEVELOP A FUND IN ORDER TO INVEST IN SHARES AND REAP BENEFITS.

IF ALL THIS IS GOING WAY ABOVE YOUR HEAD THEN LETS MAKE IT EASIER WITH A PERFECT ANALOGY .

SUPPOSE YOU HAVE A CAR OF YOUR OWN.

1.YOU CAN EITHER DRIVE IT YOURSELF OR APPOINT A DRIVER FOR THE SAME.

2.WHEN YOU DRIVE YOURSELF YOU HAVE THE LIBERTY OF DRIVING AT YOUR PACE BUT YOU EVEN NEED TO BE OVER-CAUTIOUS BECAUSE YOU ARE AT MAXIMUM RISK.

3.ON THE OTHER HAND IF A DRIVER IS AT THE WHEEL YOU ARE AT A LESSER RISK,AND YOU EVEN ENJOY THE BENEFIT OF HIS EXPERTISE AT DRIVING.

4.HIS EXPERTISE i:e HIS DRIVING SKILLS COME AT SOME COST AND YOU HAVE TO BARE THE EXPENSE.

IN OUR CASE

1.CAR STANDS FOR YOUR INVESTMENT,YOU CAN EITHER INVEST IT AS YOU LIKE OR APPOINT A FINANCIAL ADVISER FOR THE SAME.

2.YOU DRIVING THE CAR IS SYNONYMOUS TO YOU INVESTING IN STOCKS DIRECTLY.

3.APPOINTING A DRIVING IS AS GOOD AS APPOINTING A FINANCIAL ADVISER TO HANDLE YOU INVESTMENT.

4.THE DRIVER'S SALARY IS SAME AS THE EXPERTISE FEE YOU NEED TO PAY YOUR FINANCIAL ADVISER.

SO IN CASE OF MUTUAL FUNDS YOU INVEST WITH A FINANCIAL INSTITUTION,WHICH IN TURN INVESTS IN STOCKS AND AT THE END YOU BOTH TRY AND EARN PROFITS.

VARIOUS INSTITUTIONS LIKE UTI, DSP, SUNDARAM , FRANLIN TEMPLETON, SBI , RELIANCE , etc HAVE VARIOUS SCHEMES OF MUTUAL FUNDS LINED UP FOR VARIOUS TYPES OF INVESTOR.WE WILL TRY GOING DEEPER IN THIS MUTUAL FUND IN COMING POSTS.

HAPPY 15,000

2007-07-07T02:15:00.000-07:00

THE SENSEX SCALED THE 15000 MARK THUS ACHIEVING A MAJOR LANDMARK . THESE ARE JUST THE SIGNS OF WHATS IN STORE,AND IF EXPERTS ARE TO BE BELIEVED THE SENSEX MAY SOAR TO 18000 MARK WITHIN THE FIRST QUARTER OF 2008.

WHAT DO THESE NUMBERS SIGNIFY FOR THE COMMON INVESTORS?

WELL MANY INTERESTING STATISTICS HAVE CROPPED UP IN ALL THE
NEWSPAPERS ,THE ONE IN TIMES OF INDIA GIVES FOLLOWING DETAILS:

ANYONE WHO MIGHT HAVE INVESTED Rs ONE LACS FIVE YEARS AGO IS WORTH Rs FIVE LACS SEVEN THOUSAND AS OF TODAY. WITH A WHOPPING PROFIT OF Rs FOUR LACS IN JUST FIVE YEARS, THE INVESTOR MIGHT BE SMILING ALL HIS WAY TO THE BANK.

LET BYGONES BE BYGONES ,WHAT SHOULD BE THE ACTION PLAN FOR THE PRESENT SCENARIO ?
IT WOULD BE HIGHLY ADVISABLE TO BUY A GOOD AMOUNT OF STOCKS AS A LONG TERM INVESTMENT,BECAUSE THEY WILL BE APPRECIATED SOONER OR LATER.
ACCUMULATING THE SHARES OF COMPANIES YOU HAVE SHORT-LISTED AS AND WHEN THEY SHOWN SLIGHTEST OF DECLINE WOULD BE HIGHLY PROFITABLE.
REMEMBER TO DIVERSIFY YOUR FUND THOUGH.

THIS CAN VERY WELL BE A GOOD TIME TO INVEST IN MUTUAL FUNDS TOO.
NOW IF YOU WISH TO KNOWN WHAT MUTUAL FUNDS MEAN,THEN DO NOT MISS THE NEXT POST.

CRACKER OF A SEASON FOR IPO INVESTORS

2007-07-05T22:16:00.000-07:00

I STILL CAN'T REALLY BELIEVE IT,VISHAL RETAIL'S SHARE GOT LISTED AT A WHOPPING PRICE OF Rs 700/- ODD AS AGAINST ITS PRICE BAND OF Rs 250 TO 270/- GIVING A SPLENDID RETURN.
IMAGINE THE MOOLAH RAKED IN BY INVESTOR WHO PAID AT AROUND Rs270/- PER SHARE AND WITHIN A FORTNIGHT ITS VALUE HAS TOUCHED THERs 700/- MARK.EVEN IF EACH SHARE GIVES AROUND Rs 400/- THENTOO THE INVESTOR IN BOUND TO HAVE THUMPING PROFITS.JUST RECENTLY I HAD MENTIONED THE OPPORTUNITY IPOs PROVIDE AND VISHAL RETAIL'S IPO PROVES THE POINT PERFECTLY.

THE OTHER IPO WHICH GOT LISTED WAS THAT OF DLF WHICH REACHED AHIGH OF Rs 714/- ON BSE AS AGAINST THE SELLING PRICE OF Rs 525/-. THOUGH THE PRICE RAPIDLY DECLINED AFTER THE LISTING,IT STILL REMAINS IN THE CORRIDOR OF Rs 570/- TO Rs 580/-, STILL GIVING CLEAR 10% PROFIT.
WHICH FIXED DEPOSIT OR INSURANCE OR PPF ACCOUNT IS GOING TO GIVE YOU AN INTEREST RATE OF 10% FOR JUST 15 DAYS ? NONE !!!!!!!!

PEOPLE WHO INVESTED IN THESE IPOs HAVE PROFITED MASSIVELY,AND JUST RE-CONFIRMED THAT STOCKS ARE THE BEST INVESTMENT AROUND.

SWINGING HIGH

2007-07-02T22:32:00.000-07:00

ITS LITERALLY SWINGING HIGHER AND HIGHER ,THE SENSEX TOUCHED AN ALL TIME HIGH ON MONDAY ITSELF AND THE END OF THE WEEK MIGHT EVEN SEE IT NEARING THE ELUSIVE 15,000 MARK .

WHAT DOES A COMMON INVESTOR DO IN SUCH CIRCUMSTANCES?

BASICALLY IT IS A GOOD SIGN FOR LONG TIME INVESTOR.BUT I WOULD PREFER NOT BUYING ANYTHING DURING THIS PERIOD,WHILE SELLING CAN BE QUITE PROFITABLE.YOU OBVIOUSLY DON'T WISH TO PAY MORE FOR SOMETHING AND THEN SEE ITS VALUE DWINDLING IN A FEW DAYS.SO I THINK ITS THE PERFECT TIME TO SELL SOME SHARES YOU HAVE PREVIOUSLY BOUGHT OR SIMPLY WAIT FOR A CORRECTION.A CORRECTION WILL HELP YOU BUY THE SAME SHARES AT A FAR CHEAPER RATE.

AS FAR AS INTRA DAY IS CONCERNED,THIS VOLATILITY PROVIDES GREAT PROFIT,BUT EVEN BRINGS ALONG GREATER RISKS.WITH THE SENSEX BEING SO BULLISH,THERE IS ALWAYS A FEELING THAT I MAY EARN MORE TOMORROW THAT ENTICES YOU .BUT PREDICTING THE TREND OF THE MARKET IS FAR FROM EASY, AND EVEN MANY EXPERTS GO WRONG IN THE SAME.SO ITS BETTER TO SQUARE-OFF AS SOON AS YOU GET A GOOD DEAL .USING THE LIMIT OPTION IS THE BEST THING TO DO.

IF YOU CONSIDER THE GREATER PICTURE,THE VALUE OF YOUR SHARES IS INCREASING WHICH IS QUITE A HEARTENING THING.FOR PEOPLE WHO HAVE PERSISTED WITH THEIR SHARES FOR A LONG TIME,ITS TIME TO EN CASH PROFIT.
ITS A SIGN OF COMING TIMES,AND THE SENSEX TOUCHING 15,000 WILL BE A GREAT BOOST.HOPE YOU INVEST WISELY TO REAP MAXIMUM BENEFIT OUT OF THIS BULLISH TREND.

**** PEOPLE ASK ME TO SUGGEST A PARTICULAR SHARE WHICH I THINK IS QUITE STUPID THING TO DO.SOMETHING THAT SEEMS PROFITABLE TO ME , MAY BE A LOSS FOR YOU AND VICE-VERSA.ITS UP TO YOU TO DO SUFFICIENT RESEARCH BEFORE
INVESTING EVEN A PENNY.

WHAT I SUGGEST IS DO NOT CONCENTRATE ON A SINGLE SECTOR, DIVERSIFY YOUR INVESTMENT IN VARIOUS SECTORS LIKE IT, INFRASTRUCTURE, AUTOMOBILES, PHARMA , PETROLEUM,RETAIL, etc SO THAT YOU ARE NOT OVER DEPENDENT ON A PARTICULAR SECTOR. *****

WHY NOT FDs ?

2007-06-30T22:14:00.000-07:00

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

2007-06-30T02:51:00.000-07:00

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

2007-06-29T03:34:00.000-07:00

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

2007-06-22T22:00:00.000-07:00

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

2007-06-22T04:54:00.000-07:00

"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?

2007-06-19T23:17:00.000-07:00

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

2007-06-17T21:12:00.000-07:00

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

2007-06-13T01:48:00.000-07:00

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

2007-06-11T04:07:00.000-07:00

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

2007-06-09T03:43:00.001-07:00

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

2007-06-05T23:35:00.000-07:00

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

2007-06-02T05:31:00.000-07:00

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.

KEEP GOING

2007-05-18T02:53:00.001-07:00

LAST TIME WE SAW WHAT BSE TOP GAINERS/LOSERS AND NSE TOP GAINERS / LOSERS MEAN,NOW ITS TIME FOR SOME MORE TERMS.

ADVANCES DECLINES:
THIS CHART GIVES YOU THE NUMBER OF SHARES WHOSE PRICES HAVE INCREASED (i:e ADVANCED) AND DECREASED (i:e DECLINED).THESE ARE JUST NUMBERS AND PROVIDE YOU AN IDEA OF THE MARKET TREND FOR THE DAY.

YOU MAY THINK THAT IF THE NUMBER OF DECLINES IS MORE THAN THE ADVANCES THEN THE SENSEX/NIFTY IS GOING TO FALL AND VICE-VERSA.
WELL IT IS TRUE BUT NOT ALWAYS THOUGH.ITS NOT JUST 'HOW MANY' BUT ALSO 'WHICH' SHARES ADVANCE OR DECLINE DECIDE THE FATE OF THE SENSEX/NIFTY FOR THE DAY.

SOME SHARES NEITHER ADVANCE OR DECLINE THESE ARE LISTED UNDER UNCHANGED.A SMART INVESTOR MUST ALWAYS BE FAR OFF FROM SHARES WHICH CONSISTENTLY APPEAR IN THE UNCHANGED LIST.

TURNOVER (Rs Cr)
THIS ONE IS QUITE SIMPLE,IT GIVES YOU THE VALUE OF THE VARIOUS TRANSACTIONS TAKEN PLACE THROUGHOUT THE DAY.
THE FIGURES IN CRORES CERTAINLY MAKE US WOBBLE.

BACK TO WORK

2007-05-14T08:05:00.001-07:00

WELL I JUST HAD FEW DAYS OF SUMMER VACATION YOU CAN SAY,THOUGH I HAD TO DEDICATE TIME TO MAKE CHARTS OR SKETCHES AS I CALL THEM FOR MY FURTHER POSTS AND SOME EVEN FOR PRIOR POSTS.THEY WILL BE REACHING YOU SOON,BUT TILL THEN LETS JUST TROD THE BEATEN PATH.

IN THE LAST POST I HAD EXPLAINED YOU HOW AND WHAT TO READ IN THE NEWSPAPER LIST.NOW LETS GET SOME MORE DETAILS UNDER OUR BELT(OR BELLY SHOULD I CALL IT)

IF YOU OBSERVE THE SMALL BLOCKS LINED UP ALONG THE LIST THEN YOU MAY FIND TERMS LIKE BSE TOP GAINERS, BSE TOP LOSERS, NSE TOP GAINERS,NSE TOP LOSERS,ADVANCES AND DECLINES,TURNOVER, MARKET CAP ETC.
LETS SORT THEM OUT ONE BY ONE

BSE TOP GAINERS:

THIS IS NOTHING BUT THE LIST OF THOSE SHARES WHOSE PRICES HAVE ROSE THE MOST.IN OTHER WORDS THE SHARES WHOSE PRICES HAVE SHOT UP FROM THEIR YESTERDAYS PRICE ARE LISTED IN DECREASING ORDER OF THE PERCENTAGE CHANGE.THUS SHARE SHOWING HIGHEST PERCENTAGE INCREASE IS LISTED FIRST AND SO ON.
NORMALLY THE CLOSING PRICE OF THE SHARE AND PERCENTAGE CHANGE IN PRICE ARE GIVEN ALONG WITH THE COMPANY NAME.

BSE TOP LOSERS:

EXACTLY OPPOSITE TO BSE TOP GAINERS THIS LIST PROVIDES THE INFORMATION OF SHARES WHICH HAVE RECORDED THE MAXIMUM SLUMP IN PRICE FROM THE PREVIOUS DAY.

THUS THE ABOVE TWO LISTS PROVIDE YOU INFORMATION REGARDING THE BEST AND WORST PERFORMING SHARES OF THE DAY AT BSE.

NSE TOP GAINERS AND LOSERS LIST PROVIDES THE SAME INFORMATION FOR NSE TRANSACTIONS.

AS USUAL TRUST ME TO COME UP WITH AN EXAMPLE TO HELP YOU UNDERSTAND THE ABOVE TERMS BETTER.

work in progress

2007-05-05T00:24:00.000-07:00

hi there,this post of mine did take a bit longer to come.but as usual i have a pretty good reason to defend myself.

while reading the last few blogs which contain a lot of technical aspects i realized that some visuals will make understanding the terms and examples a bit easier and less boring too.
well i have been working on it for some days and you will certainly see the difference in the posts to come

till then just bare with me.

SOME MORE EXAMPLES

2007-04-25T01:41:00.000-07:00

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

2007-04-22T23:26:00.000-07:00

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

2007-04-21T00:37:00.000-07:00

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

2007-04-18T01:54:00.000-07:00

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

2007-04-14T00:03:00.000-07:00

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

2007-04-11T04:18:00.000-07:00

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

2007-04-07T04:46:00.000-07:00

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.

TYPES OF TRANSACTION -PART II

2007-03-31T22:38:00.000-07:00

WELL LAST TIME WE SAW HOW INTRA-DAY TRADING CAN BE DONE AND HOW MONEY CAN BE EARNED FROM IT.BUT IT LEFT US WITH ONE BIG DOUBT.WHAT HAPPENS WHEN THE SHARE PRICE FALLS?AM I AT A LOSS?CAN I GET OUT OF THIS?
WELL ANSWER TO ABOVE QUESTIONS WILL HELP US UNDERSTAND ANOTHER TYPE OF TRANSACTION TERMED AS SHORT TERM DELIVERY.WE WILL GET TO IT LATER ,BUT FIRST THE DOUBTS.

TO MAKE IT EASIER LETS CONTINUE WITH THE SAME EXAMPLE BUT WITH A SLIGHTLY DIFFERENT END TO THE STORY. HERE LETS ASSUME THAT PRICE OF THE SHARE STARTS DWINDLING , SO YOU HAVE A LOSS AT HAND. SAY YOU BOUGHT 1000 SHARES AT Rs 50.80 AND THE MARKET IS GOING DOWNWARDS. WITH EVERY 10 PAISE FALL IN PRICE YOU ARE LOOSING 0.1 * 1000 = Rs 100/-. HOW TO PREVENT THIS LOSS?
JUST HAS ALL DEVICES HAVE A SAFETY SWITCH, SHARE TRADING TO HAS A SAFETY SWITCH OR AN EMERGENCY EXIT.THERE IS A PROVISION OF SETTING UP A CUT-OFF VALUE WHILE SELLING YOUR SHARES. SAY I PUT A CUT-OFF OF Rs 50.70 THEN IT IMPLIES THAT MY SHARES WILL BE AUTOMATICALLY SOLD OFF WHENEVER PRICE TOUCHES Rs 50.70 LIMIT AND NOT A PENNY LESS.THUS I CAN LIMIT MY LOSS TO (50.80-50.70) * 1000 = Rs 100/- ONLY.

IF NOW YOU HAVE UNDERSTOOD THE CUT-OFF CONCEPT WELL THEN YOU MIGHT HAVE REALIZED THAT IT CAN BE USED WHEN IN PROFIT TOO. THUS IF I SET A LIMIT OF Rs 51.80 THEN IT IMPLIES THAT MY SHARES WILL BE SOLD OFF AS SOON AS THEY REACH A VALUE OF Rs 51.80,THUS YIELDING ME A PROFIT.
HERE I NEED NOT KEEP AN EYE ON THE PROCEEDINGS FOR THE WHOLE DAY AND MERELY SETTING THE LIMITS WHILE KEEPING MY SHARES FOR SALE INSURES THAT MY TRANSACTION WILL BE THE SAFEST FOR ME.

NOW THERE CAN BE AN INTERESTING SITUATION IN WHICH THE SHARE PRICES MAY NOT TOUCH EITHER OF THE CUT-OFF LIMITS SET BY ME (LIKE RS 50.70 AND RS51.80 IN OUR EXAMPLE).
WHAT TO DO IN SUCH A SITUATION? THE ANSWER TO IT IS SHORT TERM DELIVERY WHICH WILL BE THE NEXT IN LINE OF OUR TYPES OF TRANSACTION.

YOU MIGHT SAY THAT ALL WE ARE TAKING ABOUT IS SELLING AND NOT MUCH ABOUT BUYING.THEN TO MAKE THE PICTURE CLEAR I WOULD LIKE TO MENTION THAT YOU CAN SET A CUT-OFF FOR BUYING TOO .THE OTHER OPTION CAN BE BUYING AT LAST TRADING PRICE(LTP) OR MARKET PRICE.SETTING CUT-OFF WHILE BUYING HELPS YOU MAKE USE OF THE SWINGING SHARE PRICES AND HELP YOU BUY SHARES AT A LOWER PRICE (SO YOU GET MORE SHARES IN SAME AMOUNT).

WHAT ARE THE TYPES OF TRANSACTIONS?

2007-03-30T03:11:00.000-07:00

EVEN THOUGH EVERYTHING HERE IS ABOUT BUYING AND SELLING IT TOO INVOLVES SOME DEFINITE RULES AND REGULATIONS

1.INTRA-DAY:
JUST IN CASE YOU BUY A SHARE AND SELL IT ON THAT VERY DAY THEN IT BECOMES AN INTRA-DAY TRANSACTION.
LETS CONSIDER AN EASY EXAMPLE.SAY YOU BUY 1000 SHARES OF A COMPANY BY THE NAME XYZ LTD AT A VALUE OF Rs 50.40 EACH.AS THE DAY PROGRESSES THE VALUE SWINGS UPWARDS ,DOWNWARDS AND FINALLY SETTLES ON A FIXED PRICE AT THE END OF THE DAY.IF THE VALUE OF THE SHARE CLIMBS TO Rs 51.80 AND YOU SELL IT THEN YOU WILL EARN (51.80-50.40) * 1000 = Rs 1,400/-.
ITS INTERESTING TO NOTE THAT HERE YOU DON'T ACTUALLY PAY FOR BUYING THE SHARES (REMEMBER T+2) AND END UP EARNING Rs 1400/-.
THERE'S A BIT OF DAMPER THOUGH,YOU NEED TO SHELL OUT 30% INCOME TAX AND THE BROKERAGE (SAY 2%) FROM THIS AMOUNT.STILL YOU EARN
(1400 - 32%) = Rs 952/-.
ABOVE TRANSACTION SOUNDS GREAT ISN'T IT?ZERO INVESTMENT,NO PHYSICAL EFFORT AND QUICK MONEY TO BOOT.BUT THINGS AREN'T THAT EASY.
FIRST AND FOREMOST FOR CARRYING OUT AN INTRA-DAY TRANSACTION YOU NEED TO KEEP SOME AMOUNT AS DEPOSIT WITH YOUR BROKER.
SECONDLY YOU NEED TO HAVE AN INSTINCT ABOUT HOW THE PRICES ARE GOING TO FARE AND SOME RESEARCH SHOULD GO INTO IT.
MOST IMPORTANTLY WHAT IF THE PRICES SLIDE DOWN RATHER THAN MOVING UP?
AM I AT A LOSS?
WELL THINK OVER IT ,I WILL SOLVE THIS QUERY OF YOURS SOON.

LETS CONTINUE

2007-03-27T03:11:00.000-07:00

WELL HI THERE.THERES BEEN A GAP OF ALMOST A FORNIGHT BETWEEN TWO POSTS AND HOPE U MIGHT HAVE APPLIED FOR PAN-CARD TILL NOW.
WELL LETS ASSUME U HAVE GOT A PAN CARD AND EVEN OPENED A DEMAT ACCOUNT AT YOUR BROKER (CONFIRMED WHETHER HE IS SEBI REGISTERED?).

NOW THERE ARE SOME OPTIONS WHEN IT COMES TO YOUR DEMAT ACCOUNT, A DIAL-IN ACCOUNT,ONLINE ACCOUNT ETC.YOUR BROKER WILL PROVIDE YOU THE OPTIONS AND SELECT THE ONE YOU ARE COMFORTABLE WITH.

LETS TRY AND UNDERSTAND WHAT TRANSACTIONS TAKE PLACE IN THE STOCK EXCHANGE.
BASICALLY ITS ALL ABOUT BUYING WHEN CHEAPER AND SELLING WHEN DEARER.

LETS BEGIN WITH THE PREREQUISITES

1. PAYMENTS ARE TO BE DONE ONLY THROUGH CHEQUES,AND THAT TOO FROM YOUR SAVING ACCOUNT ONLY.
2.T+2:
HERE T STANDS FOR TRANSACTION DAY ,THAT MEANS T+2 STANDS FOR TWO DAYS AFTER TRANSACTION.ALL YOUR PAYMENTS NEED TO BE DONE WITHIN T+2.
FOR EG IF YOU BUY SHARES ON MONDAY THEN YOU SHOULD PAY FOR THE SAME WITHIN TWO WORKING DAYS (SAY WEDNESDAY IN CASE OF NO HOLIDAYS IN BETWEEN).SIMILARLY THE SHARES WILL APPEAR IN YOUR DEMAT ACCOUNT WITHIN T+2.
CONVERSELY IF YOU SELL YOUR SHARES YOU ARE PAID WITHIN T+2 AND SHARES DEDUCTED IN THE SAME PERIOD.IT IS ESSENTIAL TO NOTE THAT WHEN I SAY "YOU ARE PAID" IT MEANS THAT MONEY IS DEPOSITED IN YOUR DEMAT ACCOUNT BALANCE.
#### ASK YOU BROKER ABOUT HIS INSTITUTION'S TIE-UP WITH VARIOUS BANKS FOR ECS(ELECTRONIC CLEARING) .HOLDING A SAVING ACCOUNT IN SUCH BANKS HELP YOU MAINTAIN YOUR ACCOUNT FROM HOME.####

3.CONTRACT NOTE:
I MIGHT HAVE TOLD YOU ABOUT THIS BEFORE BUT NO HARM REPEATING.
IT IS A LEGAL DOCUMENT WHICH KEEPS A RECORD OF ALL THE TRANSACTIONS BETWEEN YOU AND YOUR BROKER.ANY TRANSACTION IS INCOMPLETE (EVEN INVALID) WITHOUT THE CONTRACT NOTE.
IT IS IMPORTANT TO NOTE THAT SEBI RECOGNIZES THE CONTRACT NOTES AND IN CASE OF ANY FORGERY IT IS A VITAL DOCUMENT TO GET YOU INVESTMENT BACK SAFELY.

HOW TO GET A PANCARD AND START A DEMAT ACCOUNT

2007-03-09T03:19:00.000-08:00

AS WE DISCUSSED EARLIER IT IS QUITE ESSENTIAL TO HOLD A PAN-CARD NOW-A-DAYS. THE ISSUE IS HOW TO GET ONE?
ITS ONE OF THE EASIEST THING TO DO.

GO TO ANY FINANCIAL INSTITUTION (UTI, KARVY,ETC ARE PERMITTED BY THE GOVERNMENT FOR THIS PURPOSE).ASK FOR A PAN APPLICATION FORM(Rs 5/- ONLY).FILL THE FORM AND ATTACH PROOFS OF RESIDENTIAL ADDRESS AND OF YOUR BIRTH DATE.PAY THE FEES (Rs 67/- ONLY) AND SUBMIT THE APPLICATION.YOUR PAN-CARD IS SENT TO YOUR ADDRESS WITHIN 15-20 DAYS.
(THE ABOVE FEES ARE THE ONES APPLICABLE IN MAHARASHTRA,THEY MAY VARY A BIT AT OTHER PLACES).

ONCE YOU HAVE A PAN-CARD YOU ARE ALL SET TO OPEN A DEMAT ACCOUNT.
DEMAT ACCOUNT CAN BE OPENED AT ANY BROKER JUST MAKE SURE THAT HE IS A SEBI REGISTERED BROKER.

SEBI STANDS FOR SECURITIES & EXCHANGE BOARD OF INDIA AND IS THE MARKET WATCHDOG.IT KEEPS A STRICT VIGIL OVER THE MARKET ACTIVITIES AND SAFEGUARDS THE INVESTORS.

INDIA BULLS,SHAREKHAN,KARVY,RELIANCE,LKP,ANAND RATHI ARE SOME OF INDIA'S LEADING BROKERS.

DEMAT ACCOUNT CAN BE OPENED BY PAYING THE BROKER HIS ANNUAL FEES,PROVIDING HIM YOU SAVING ACCOUNT PASSBOOK'S LATEST UPDATE AND YOUR IDENTITY PROOFS.WE WILL DU ELY SEE HOW THE DEMAT ACCOUNT WORKS & VERY SOON WE WILL PERFORM OUR FIRST TRANSACTION TOO.

LETS KEEP CHUGGING

2007-03-04T00:29:00.000-08:00

WELL THE BUDGET HAS BEEN DECLARED AND THERE HAVE BEEN MANY ADVERSE AND SUPPORTIVE REACTIONS TOWARDS IT.UNFORTUNATELY WE HAVEN'T LEARNT ENOUGH TO MAKE USE OF THE BUDGET IN SHARE TRADING.
BUT STILL IF YOU HAVE KEPT SOME PAPER CUTTINGS OF THE POST BUDGET PERIOD THEN WE WILL CERTAINLY MAKE USE OF IT IN NEAR FUTURE.

TILL THEN LETS CONTINUE TO UNDERSTAND SOME MORE TERMS.I THINK TILL NOW WE HAVE COVERED SHARE MARKET,BROKERS,BSE,NSE,SENSEX AND NIFTY ISN'T IT?
NOW SOME MORE OF THEM

1.BROKERAGE:
THIS IS THE AMOUNT YOU PAY THE BROKER FOR PERFORMING THE TRANSACTION ON YOUR BEHALF.IN OTHER WORDS ITS THE BROKER'S COMMISSION.
IT VARIES FROM BROKER TO BROKER AND ALSO WITH THE TYPE OF TRANSACTION.NORMALLY IT IS SOME PERCENTAGE(APPROX 0.1 TO 2%) OF THE TRANSACTION AMOUNT

2.DEMAT:
DEMAT IS JUST THE SHORT FORM FOR DE MATERIALISATION.JUST TO MAKE THINGS SIMPLE IT IS A VIRTUAL RECORD OF A PHYSICAL ENTITY.
EARLIER SHARE CERTIFICATES WERE PHYSICALLY HANDED OUT,THEY WERE PRONE TO THEFT,LOSS OR DAMAGE. SO NOW A DAYS THEY JUST APPEAR IN YOUR RECORDS (i:e IN YOUR DEMAT PASS BOOK OR ON COMPUTER), JUST LIKE YOUR BANK PASS-BOOK SHOWS YOUR SAVINGS EVEN THOUGH YOU DON'T SEE THEM PHYSICALLY.
DEMAT ACCOUNT CAN BE OPENED AT ANY BROKER,SOME BANKS TOO OFFER THE FACILITY.

3.PANCARD:
PAN STANDS FOR PERMANENT ACCOUNT NUMBER,AN IMPORTANT DOCUMENT AFTER THE PASSWORD TO PROVE THAT YOU ARE AN INDIAN.
PAN IS REQUIRED FOR EVERY MAJOR FINANCIAL TRANSACTION NOWADAYS.
PAN CAN BE OBTAINED FROM MANY FINANCIAL INSTITUTES (UTI,KARVY,etc) ON JUST FILLING UP A FORM AND PROVIDING ADDRESS AND IDENTITY PROOFS.
PAN CAN BE OBTAINED BY ANY INDIAN CITIZEN ABOVE 18 YEARS WITH OR WITHOUT AN INCOME SOURCE.

#### IT IS MANDATORY TO HAVE A PANCARD TO OPEN A DEMAT ACCOUNT####

A BIT OF FUN WHILE YOU LEARN

2007-02-26T07:25:00.000-08:00

TILL NOW (ONLY IF YOU HAVE READ THE PREVIOUS POSTS) YOU MIGHT HAVE STARTED FEELING A BIT COMFORTABLE WITH ALL THESE TERMS.BUT JUST READING WON'T HELP. YOU NEED TO ASSIST IT WITH A BIT OF ACTIVITY AT YOUR END.

LETS TRY ONE OF THE SIMPLEST ACTIVITY.

1.PULL OUT LAST WEEKS NEWSPAPERS,FROM TUESDAY TO SATURDAY (SHARE MARKETS HAVE SATURDAY & SUNDAY OFF ,SO NO LISTINGS THE NEXT DAY)

2.GO TO THE BUSSINESS PAGE AND JUST BROWSE THE SHARE LISTINGS.

3. CHOOSE TEN COMPANIES OF YOUR CHOICE. (SAY TATA MOTORS,INFOSYS,RELIANCE INDS,HLL,ETC)

4.JUST LIST THEM ONE UNDER THE OTHER.

5.TRY TO REMEMBER WHAT THIS COMPANIES ARE INTO i:e WHETHER THEY ARE AUTOMOBILE MANUFACTURERS,SOFTWARE GIANTS,etc.

6.SEE AND JOT DOWN HOW THEIR SHARES PERFORM OVER THE WEEK.NOTE DOWN THE PRICES FOR ALL THE WEEKDAYS.

7.TRY ALL STEPS 1 TO 6 AND YOU WILL BE LEFT WITH MANY QUERIES.NOTE THEM DOWN WE WILL TRY TO FIND THE ANSWER FOR ALL YOUR QUERIES PRETTY SOON.

TAIL PIECE:
THE BUDGET IS FAST APPROACHING JUST SAVE ALL THE PAPER CUTTINGS FROM POST BUDGET PERIOD.TRY AND WATCH THE POST-MORTEM REPORTS OF THE BUDGET EVEN IF YOU DON'T UNDERSTAND A DAMN.DO NOTE ITEMS WHOSE PRICES INCREASE AND WHOSE PRICES DECREASE.

SOME MORE IMPORTANT TERMS

2007-02-23T22:35:00.000-08:00

WELL I THINK YOU MIGHT HAVE DIGESTED THE TWO PREVIOUS TERMS SHARE MARKET AND BROKERS,SO LETS CHUG ALONG AND TRY TO UNDERSTAND SOME MORE .

1.BSE(BOMBAY STOCK EXCHANGE)
THIS IS THE BIGGEST STOCK EXCHANGE IN INDIA AND BEING NAMED BOMBAY STOCK EXCHANGE IS DUELY LOCATED IN BOMBAY(MUMBAI) ONLY.IT WAS FORMED BY SOME TRADERS LONG BACK,BUT NOW IS CLOSELY INSPECTED BY THE GOVERNMENT.

2.NSE(NATIONAL STOCK EXCHANGE)
NSE WAS FORMED BY THE GOVERNMENT 50 YEARS BACK AS A COMPETITOR FOR BSE.IT IS LOCATED IN DELHI.

A COMMON INVESTOR LIKE US CAN INVEST IN ANY OF THE TWO.WE CAN EVEN MAKE USE OF THE DIFFERENCE IN RATE OF A PARTICULAR SHARES IN THE TWO MARKETS AND DECIDE WHERE TO BUY OR SELL.
ITS JUST LIKE TWO SHOPS SELLING/BUYING THE SAME GOOD.WE OBVIOUSLY WILL BUY AT THE ONE WITH A LOWER PRICE AND SELL AT THE ONE WITH HIGHER PRICE.

3.SENSEX:
SENSEX IS THE PERFORMANCE INDEX OF THE BSE. A LIST OF INDIA'S TOP 30 COMPANIES(RELIANCE,TATA,BAJAJ,ETC) IS MADE.PRICES OF THEIR SHARES IS CLOSELY FOLLOWED AND RATED.IF MAJORITY OF THESE SHARES SHOW A RISE IN PRICE THAT DAY THEN THE SENSEX RISES AND VICE-VERSA.

4.NIFTY:
INDIA'S TOP 50 COMPANIES DECIDE THE FATE AS AGAINST 30 AT NIFTY IS THE PERFORMANCE INDEX OF NSE.THE ONLY DIFFERENCE IS THAT AT NSEBSE.

NOW IF YOU HAVE READ NEWSPAPERS OR HEARD BUSINESS NEWS EVEN WITH LEAST ATTENTION THEN YOU MIGHT HAVE REALISED THAT SENSEX IS WAY AHEAD OF NIFTY.(FOR EXAMPLE ON 23/02/2007 SENSEX CLOSED AT 13363 WHILE NIFTY AT 3939).
THIS DIFFERENCE IS BECAUSE BSE WAS FORMED ALMOST A CENTURY BACK SO IT HAS GOT THE LEAD .IF YOU SEE THE RELATIVE PERFORMANCE THEN THEY ARE FAIRLY SIMILAR.

OK ,AS FOR NOW THIS SHOULD MAKE YOU STUDY A BIT.HAVE A LOOK AT THE BUSINESS NEWSPAPERS AND KEEP SOME QUESTIONS READY.
SEND THEM TO ME AT belose_sanket@yahoo.co.in ,I WILL TRY ANSWERING THEM IN THE FOLLOWING POSTS.

CONCEPTS AND TERMS INVOLVED

2007-02-18T21:58:00.000-08:00

THE INDIAN SHARE MARKET IS RELENTLESSLY SWINGING UPWARDS IN RECENT YEARS,WHAT WILL THE SENSEX BREACHING THE 14K MARK THIS YEAR.
NOW WHENEVER YOU READ LINES AS THE ONE ABOVE,YOU GRASP ONLY SAY HALF OF IT.MANY OF US DO NOT UNDERSTAND WHAT SENSEX,NIFTY,DEMAT,etc IS ALL ABOUT.
SO LETS TRY AND FIGURE OUT ALL THESE TERMS ONE BY ONE.
THOUGH THE TERMS SEEM QUITE INTRICATE THEY ARE PRETTY EASY TO UNDERSTAND,THE FACT IS THAT YOU JUST NEVER TRIED.

OK SO LETS GO ONE BY ONE

1.SHARE MARKET OR STOCK EXCHANGE:
THIS IS THE PLACE WHERE ALL TRANSACTIONS RELATED TO SHARES (LIKE BUYING OR SELLING) ACTUALLY TAKE PLACE.IN OTHER WORDS SHARE MARKET IS A SHOP WHICH DEALS IN SHARES.
THERE ARE TWO BIGGEST SHARE MARKETS IN INDIA viz NSE (NATIONAL STOCK EXCHANGE ,DELHI) AND BSE(BOMBAY STOCK EXCHANGE, MUMBAI)

2.BROKERS:
THE TRANSACTIONS IN THE SHARE MARKET INVOLVE A TURNOVER OF HUNDRED,THOUSANDS OF CR ORES.COMMONERS LIKE US CAN'T REALLY BE A PART OF THESE HUGE TRANSACTIONS.SO THERE ARE MEDIATORS WHO BUY/SELL SHARES IN A HUGE AMOUNT FROM THE EXCHANGE AND IN TURN BUY/SELL SMALLER QUANTITIES TO PEOPLE LIKE US.
SO IF WE TERM THE STOCK EXCHANGE AS A WHOLESALE DISTRIBUTOR,THEN THE BROKER IS A RETAILER.
IN SHORT BROKER IS THE LINK BETWEEN COMMON INVESTORS AND THE STOCK EXCHANGE.

WELL TH ATS IT AS OF NOW,BUT THERE IS A SMALL ACTIVITY FOR YOU GUYS.PICK UP ANY NEWSPAPER AND GO TO ITS BUSSINESS PAGE,SEE IF YOU FIND SOME TERMS LIKE DEMAT,EQUITY,IPO,PAN,ETC.WE WILL TAKE THEM UP SOON,JUST IN CASE YOU FIND OUT WHAT THEY ARE THEN YOU MAY JUST RECTIFY ANY MISTAKE OF MINE.

HOW ARE SHARES A BETTER INVESTMENT?

2007-02-16T22:42:00.000-08:00

AN INVESTMENT IS FRUITFUL IF AND ONLY IF IT YIELDS YOU SUBSTANTIAL INTEREST.IT WILL BE HIGHLY USEFUL JUST TO TAKE A LOOK AT THE FOLLOWING STATISTICS. THE NUMBERS ARE THOSE RELATED TO THE INDIAN (OR ASIAN ) MARKET BUT THE IMPLICATIONS ARE ARTHER SAME WORLD OVER

1.BANKS IN DEVELOPING NATIONS OFFER 8-9% INTEREST PER ANNUM ON FIXED DEPOSITS WHILE IN DEVELOPED COUNTRIES THE RATE CAN BE AS LOW AS 4-6%.

2. PRECIOUS METAL LIKE GOLD CAN EARN YOU AROUND 5-7% .

3.INSURANCE AND POST CERTIFICATES DO PROVIDE YOU FINANCIAL SECURITY BUT THEY EARN YOU PRETTY MEASLY INTERESTS,AND INVESTMENT BEING FOR A LONG PERIOD ISN'T ALL THAT PROFITABLE.

4. REAL ESTATE IS ONE FIELD WHICH CAN GIVE YOU WHOPPING RETURNS BUT THE INITIAL INVESTMENT IS HIGH AND PAPER WORK INVOLVED ALWAYS LEAVES SCOPE FOR CON MEN.

ON THE OTHER END SHARES CAN PROVIDE YOU UP TO 15-17% INTEREST,THERE IS ALWAYS THE OPTION OF OPTING OUT AND INVESTMENT BEING MONITORED BY THE GOVERNMENT IS ALWAYS SAFE.

WHY DO YOU NEED TO INVEST? 2

2007-02-14T07:04:00.000-08:00

ASSUMING THAT YOU DIGESTED THE PREVIOUS DOSE OF ECONOMICAL TERMS (COMMON THEY WEREN'T ALL THAT TOUGH) LETS TRY AND UNDERSTAND SOME MORE OF THEM.

NOW TO THE 4TH POINT (HEY PASSIVE MONEY WAS NO. 3 ISN'T IT?)

4. ACTIVE MONEY: IF YOU UNDERSTOOD MY CONCEPT OF PASSIVE MONEY THEN THIS IS A CAKEWALK. IF YOUR MONEY EARNS YOU MORE MONEY ON ITS OWN THEN ITS ACTIVE MONEY.SOUNDS WEIRD? THEN TRY THIS INVEST YOUR MONEY IN SAY BANK FIXED DEPOSITS,INSURANCES,GOLD,REAL ESTATE, etc.AFTER A CERTAIN AMOUNT OF TIME YOU MONEY GENERATES YOU INTEREST,AND IT INCREASES ON ITS OWN,SIMPLE ENOUGH. NOW YOUR MONEY IS ACTING AS A EARNER,i:e ITS TURNED ACTIVE.(NOW YOU CAN'T BOAST TO BE THE SOLE BREAD WINNER).

SLOWLY WE WILL TRY TO EVALUATE HOW PROFITABLE THESE MODES OF INVESTMENTS ARE,AND WHAT ARE THEIR DRAWBACKS.AND FINALLY I WILL TRY TO PROVE YOU HOW SHARES ARE A BETTER OPTION.

YOU MIGHT FEEL THAT WE ARE A TAD TOO SLOW BUT MATE LETS TAKE THESE BABY STEPS SO THAT YOU CAN MERRILY HOP LATER.

WHY DO YOU NEED TO INVEST ? 1

2007-02-13T02:50:00.000-08:00

BEFORE ANSWERING THE ABOVE QUESTION WE NEED TO UNDERSTAND SOME BASIC TERMS.

INFLATION: JUST TRY TO REMEMBER WHAT THE PRICE OF PETROL, CLOTHES,FOODSTUFFS,HOMES,etc WERE 5 YEARS BACK.ARE THEY THE SAME STILL? CERTAINLY NOT,THEY HAVE ALL BECOME DEARER ISN'T IT? THATS WHAT INFLATION IS,INCREASE IN PRICES OF ENTITIES WITH TIME.(AND MANY THINK WHAT BIG FUSS INFLATION IS )
INCREMENTS: HAS YOUR SALARY INCREASED IN PROPORTION WITH THE INFLATION.HERE YOU NEED TO REALIZE THAT YOU SHOULD APART FROM MEETING YOUR EXPENSES YOU SHOULD BE SAVING ENOUGH.
PASSIVE MONEY: LETS ASSUME YOU SAVE Rs5000/- PER MONTH (WHATEVER BE THE CURRENCY). SO ANNUALLY YOU SHOULD SAVE AROUND Rs.120,000/-.THAT MEANS YOUR MONEY JUST ROTTED IN YOUR CUPBOARD WHILE YOU KEPT SLOGGING TO SAVE MORE OF IT. I TERM THIS MONEY AS PASSIVE,BECAUSE IT ISN'T WORKING FOR YOU. SOME KIND OF INVESTMENT IS GOING TO MAKE IT WORK FOR YOU.

WHAT ARE SHARES ALL ABOUT?

2007-02-13T01:42:00.000-08:00

'SHARE' THE WORD ITSELF MEANS A PART OR A FRACTION OF A WHOLE ENTITY. LETS TRY TO UNDERSTAND WHAT SHARES ARE WITH A SMALL EXAMPLE. LETS SAY A CHOCOLATE MANUFACTURING COMPANY BY THE NAME DINGDONG (JUST AN EXAMPLE) WANTS TO START A NEW MANUFACTURING UNIT AND EXPAND ITS BUSSINNESS.THE MOST IMPORTANT FACTOR FOR THIS NEW VENTURE WILL BE GENERATING THE FINANCE NEEDED.

NOW ONE OF THE METHODS TO RAISE THIS FUND IS BY OFFERING MINOR PARTNERSHIPS IN THE COMPANY TO MULTIPLE PARTNERS. IN SHORT MANY PEOPLE WILL PROVIDE SMALL AMOUNTS TO BUILD THE NEW COMPANY,IN TURN THEY WILL BE GIVEN PARTNERSHIPS IN THE COMPANY PROPORTIONATE TO THE FUND THEY PROVIDE. IN ECONOMICAL TERMS THESE PEOPLE ARE CALLED SHARE HOLDERS OF THE COMPANY.NOW COMPANY'S PROFIT WILL BE SHARE HOLDERS PROFIT AND SAME ABOUT THE LOSS.