Friday, 19 November 2010

How to make money in Stock markets...

Before we start assuming, let me make it clear that I have not made alot of money from the stock market, at least not as much as I would have liked. Fortunately ( just being modest ) I have not even lost money. However I have considered myself a player of the market from last 5 years and I have seen the entire sine wave of the market. As in I have seen the market rise from 15k to 21 k , then falling to 8k and then rising back to 21k. This exposure gives me enough knowledge to write on the matter. Here I share some common tips and trick to make money in stock markets. However please note that this tips are for Retail investors who have a proper salaried job and not for people who make a living out of stock markets.
  • The best thing ever told to you guys would be to invest in Mutual Funds. This allows professionals to take care of your money. However you are not directly involved which means less fun, less risk , less gains and less losses.It is good for people who just want to invest and not care about stock markets
  • One of the best tip is given by the man who made millions with stock markets, Warren Buffet. He says ' Be greedy when others are scared to buy and be scared when others are greedy'. Though it looks simple its the most difficult thing to follow. I can say that with personal experience.
  • Another golden rule says ' Buy on rumours and sell on news'. This rule can be called as a corollory and above rule as a theorem. Again a simple rule but difficult to follow.
  • One of the most important thing to remember when you trade in shares is that never do it on credit. In stock market terms, it is also called margin. Always buy shares with cash so that you can hold them as long as you want. Buying on margin increases your exposure to losses.
  • When you buy and sell shares for short term, technical analysis is more important than fundamental analysis. Most of the analyst coming on TV shows and recommending buy or sell of shares are technical analysts.
  • Before you start following tips for buy/sell from any technical analyst, make a thorough research on the person's calls. For at least 3 months, note down the person's recommendations and targets and find out how many times is he right. Some sites like rediff portfolios or moneycontrol can help you in this process. I, myself, go through this process and after a year of research, I follow a particular analyst blindly now. He is 80% times right.
  • Remember to respect the Stop Loss phenomenon. The analyst would always say to buy a particular share but to keep a stop loss on it. For example, he may say buy 'A' for 100 Rs with target of 110 and Stop Loss of 95. This means his call is valid for buy only till the share reaches 95 rs, Below that it is recommended to sell even if we are in a loss.
  • Averaging is a good scheme but is not always right. To keep buying more shares of a particular scrip (company) when it is going down will not always work. That money could have been used to buy shares going up and make money.
  • Always be ready for the fact that not all days are going to be profit days. Be ready for the loss days.
  • Never consider stock market as a fast and easy money making money phenomenon. It is a very analytical gambling. Set your expectations right.
  • Remember the real money is made by big players. We as retail small time investors are people who eat the left-overs. Accept this fact. Though the left overs are a considerable amount, it still will never be as big as what the major players earn.
These were a few thoughts I felt like sharing with you guys. Please do inform if you found these useful. Also feel free to ask questions on the topic if you have any or if there is any other area within the topic that you want me to write about.

Planning to write a few points on Tax saving/planning near the December-January period.


Thursday, 11 November 2010

Search for India's Obama

  No, its not a new TV reality hunt show as the trend has been in India. It's just a thought that came across my mind after i watched the video of Obama speaking in front on the Indian Parliament. I would strongly suggest before you go further in the post, Spend 30 minutes of your time to listen to one of the great orators of these times and arguably the strongest person on planet earth, the president of the USA.

  Now if you would have carefully observed, only then will you realize that though the speech looks like is spoken impromptu or mugged up, its not. He does actually have a book below, but he did not care to look below for more than 2 times in the entire 30 minute speech. Spoke with a passion, spoke like a true leader and spoke whatever he wanted to. He has a charm and great oratory skills apart from the power the position gives him. Anyway the post is not about how good Obama is but the search for an Indian Obama.

  Compare this speech to the speech our respected PM Mr Manmohan Singh gives. A guy who is reading from a bunch of papers and speaks with no vigor or enthusiasm. The voice is low with no tonal gradations. He is a great economist but the weakest PM we ever had. He speaks and looks all like the rubber stamp PM that he is. I would not blame the world if they do not take India seriously. The man representing us does not speak with the dynamism that the country beholds. But is it only him?? Let us talk about our future PM Mr Rahul Gandhi. ( I am convinced the country is again going to vote in favour of a Gandhi, And one of the reason they will do so is cause we are out of options). We all remember how Rahul goes to places and mingles with the young crowd. He would have done alot of things in the small political career he has. But all these are planned by the real brains of Congress. The brains who know how this country has to be ruled. Do we remember one great speech from this guy? He was almost dumb before Madam decided to groom his personality so that he can be the next PM. I am sure our next leader is also going to be as lame as the current one.

  The opposition BJP had one of the greatest orators of all time, Mr Vajpayee. A man whom the world respected for his oratory skills and persona. But there has been no replacement to this guy. The second string BJP leaders do have a few good orators like Modi and Sushma Swaraj, but until one of them evolves to be the leader at the country level, we are shooting in the dark if we hope they can end our search. The problem has been that the BJP second string leaders always behaved like crabs. As soon as one wished to go up, the others pulled him down. And this is one of the greatest reasons why we do not have a strong opposition. Speakers like Lalu can be said as good, but only in their style. You cannot expect them to represent the country at an international level specially if we are portraying our self as the next probable super power.

   Regionally we might have few good orators but the politics or agenda they have may not help them evolve to a national level. I know of a certain Raj Thackeray who can impress a few with his oratory skills but the agenda of his party is more in dividing the country. He will not come in power even in the state of Maharashtra, forget dreaming about national level. Same applies for other good orators at regional levels.

   So when a leader like Obama comes to my country and speaks, it makes me wonder, if we ever will be able to find the Indian Obama. Somebody who would have the charm and the skills to lead the country. Someone who can represent us globally and speak with the same passion and authority in which Mr Obama did. I have mentioned this before and i will repeat it. We do have the capability of being the next super power provided we change the attitude. Let us have at least one leader in the forties who can speak with the same skills like Obama does. As I sincerely do not expect people in the seventies and eighties capable to show the energy and agility that the global level demands. Its time for you to rest, and not lead the country to darkness.

 I had heard of a saying which said, your team is only as weak as your weakest link. I will modify and say, your country is only as powerful as your leader is. I hope this search ends soon. I hope we have someone whom the world listens, applauds and respects. Cause I still dream of making my country the best in the world.


Friday, 5 November 2010

The day I turned 25

I can understand the importance of 21 as you get the right to marry. I can understand 18 as you get the right to vote. I can understand 16 as its supposedly the sweetest age. I can understand 40 as its the onset of the decline of your youth. But i still do not understand what is so special about 25 apart from the fact that its the silver jubilee year. For those who failed to guess, I turned 25; completed my silver jubilee; on the 3rd of November. Ya fine, I will change my age in the profile in the blog.

The importance of my age was first shown by my mom. She asked me after wishing; "So how old are you now?" I was surprised to hear this, I thought how can my mom forget my age, then it struck me that she cannot, she is just trying to prove the importance of the year. And then one of my friend who is so scared of the number. She probably would remain 24 n half till she turns 30 kept reminding me that I am getting old.

Ok, I was talking about my day. With the time difference between India and here I was expecting some confusion among well wishers on the time to wish. Confusion prevailed. I did not have much expectations this year knowing the fact that this is my first birthday when I am away from home. I know for a fact that there are a few people on this world who would make me feel special on my day. Some of them did while some tried. But I am always thankful to God for giving me such people in my life. Got a fewer calls this time than normal and lil more mails. I, personally, do not take offence from my friends if they forget my birthday as I know myself.I am so bad with dates that some day I might even forget mine. So the day was pretty much normal with a few of them calling , few who I know might have remembered but couldn't reach me, few who were just unaware of the day and few who might have known but still did not call for some reasons. Thanks to all of them except the third and fourth kinds of people in the list ;-)

I tried to gamble on my birthday. I decided to take the driving test to get a license in USA. Now for those who are unaware, its not easy. I did clear my written earlier but then I gambled to take the actual driving test without training from a school. Thanks to the kind hearted American couple (Mary and Tim) who taught me driving by letting me drive for lunch for a week. I would not have expected an Indian here to help me learn to drive with their cars. This couple did dared. On my birthday, Tim took me to the DMV and we took the test. Ohh common, do I need to mention I passed. :-). It was a gamble, I risked failing at something on my special day but with some luck I did not. I am really grateful to Tim and Mary and we have agreed to go out to an Indian Restaurant as my birthday and passing treat.

Among the people I know here, none were aware of the day. We did have a few cake cuttings here in the past in which , the typical me, created a hype about my birthday. I assured them a treat if i get some real expensive gift. But on the day and the week, I was all quiet about it. Only during dinner, did I mention it to my flat mate that it's my birthday today. I know some of you might be thinking what sadistic pleasure it gives to keep it hidden when people were talking about it and wanted to know. I can understand your thoughts but still I get a kick out of

All in all, a day like any other birthdays I will not forget. (Please do not take it seriously, I do not remember anything of my birthday except the past 2 years. That is how much my memory span is). So I celebrated my silver jubilee, in peace and in a calm way. God! I am getting old. Help!!!!