WORK IN PROGRESS

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

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 ?

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 !!!!!!!!!!!!

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

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

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 !!!!!!!!!

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

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?

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

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

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

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 ?

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.