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Why you should read Annual Reports ?

                           Do you call yourself an investor when you’ve never read an annual report? Annual reports are sent to shareholders at the end of every financial year and published on the company website.It summarizes the performance of the sector and the company.It is a ready reckoner   of products, market share, and financial situation of a company.Charlie Munger says," You must value the business in order to value the stock".Annual reports help us to obtain clarity and insight about the business and it's competitors.            Each annual report can be dismantled into four pieces- the director’s report, the auditor’s report, financial results and account notes. The director’s report describes the current economy and the sector, spreading light on the firm’s activities, challenges faced, opportunities to be tapped and future plans. Checking the information for flaws and comparing with other firms in the sector is the job of the investor. Here,
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Market Outlook- short term

        Market index NIFTY failed to touch the all time high even after the recovery from March 2018 bottom.We have seen a consolidation phase between 10500 and 10800 in last two months and volume spurt   was not happened.Means,buyers are not active above 10800 level.Instead,profit booking is still going on.Foreign institutions are continuing net selling this year,though domestic institutions accumulate at discount situations.         Like any previous election year,2018 is also uncertain for general index, although IT secor made a strong recovery recently.A High PE of 26.5 is a big concern for foreign institutional investors,as they search undervalued opportunities across the globe.US Market also trades at an over bought phase;but their dividend yield looks better than India.Rising non performing assets in banking sector affected the market sentiment badly.Major Public sector companies corrected more than 30% and still the bottom fishing not started.             We have seen

Why we should examine Values of a corporate ?

Image coutesy:         Now a days, values are not prominent in life and business- people have forgotten it and same is the case of companies too. but, the real value creators will leave a legacy in the world.  Great business men lead companies with ethical values and standards. Such businesses become steadily growing and financially strong in the long term.      Few historical examples are: Infosys,  the Tata group, Maruti . In 1990, N.R.Narayanamurthy came up with the IPO of his company Infosys and many people were reluctant to invest due to  the nascent stage  IT sector in India.  Infosys became one of the giants in IT industry, employing more than two lakh people, raising the promoters to billionaires.An investment worth INR 10,000 in the 1990s would have become INR 4 crores by now.T ata have faced many difficulties like huge debt accumulation in Tata Steel and Tata Motors, but managed to rise over all of them. Tata Motors acquired top automobile brands su

Market Pulse -December 2017

                        The year 2017 was   bullish for the Indian stock markets, though economy was in a bumpy road.Market has survived hard times of   impetuous demonetization and initial errors of goods and services tax.Continuous economic reforms have taken its toll on the economy all throughout the year. Nonetheless, experts have the strong conviction that in the long term, this hard ride will pay off. These reforms, aimed at curbing the menace of black money and better taxation, are expected to meet those goals by FY19.          The GDP growth rate in Q1FY18 and Q2FY18 are 5.7% and 6.3% respectively. Clearly we see recovery from the temporary uncertainties throughout the year, although this has also been attributed to unclear tax regulations and other GST glitches. The companies increased production and replenished stocks after the GST rollout, starting July 1st. Most of them also felt the need to empty out their inventories before the bill came to force, resulting in lo

A simple technique of Intraday trading

           Photo: Tyler Easton ( Unsplash)           D o you know what a coin, our lives and the stock market has in common?  They all have two sides. Like life with all the ups and downs, there are rallies and pitfalls in the market. How we face both is what makes all the difference. Long term investors use fall in stock prices as an opportunity to buy more. On the other hand, these are the days when traders hit the jackpot. Prices rise slowly and fall fast. During such commotion, things are comparatively easy for the traders. Although there are many techniques used in such situations, I would like to share this one method with you.           How the indices begin when the market opens on that particular day, is very important. Traders should compare the open price of index like NIfty to previous day close price.Higher the open price,there will be a positive outlook for intraday.Lower the open price means negative market sentiment. Next step is to look at the movement of

Open Mind and Success in market.

           I t was about nine years back that I met Manmohan Desai. Bald headed with a white beard, the man had a smile that I will never forget. Starting at nine in the morning, Desai is at the trading terminal until half past three in the evening. I saw him all amped up during rising stock prices and all tensed and gloomy amidst falling prices. He never took a trading day off and each day, just about five minutes was what he spent to have his lunch. He never took advice from anyone, neither did I see him making preparations for trades. Desai lost money almost every single day. “Why don’t you stop trading?” Everybody including his wife and son would ask him. “Nothing’s right about this. I mean it’s a force of tamas. I would say, nobody should get into this. I am just one of those who got trapped in this mess. Looking at the terminal terrifies me now!” He repeatedly told;but never stopped trading.  In real life, I would call Desai a good businessman. But he did not look at the

Which approach is ideal for stock picking?

                              How to study stocks is an age old question in the market. Some people advocate in favor of fundamental analysis, while others support the use of technical analysis. It’s more like how guys always think their car is better than their friends’- it’s just that you have driven your car for a long time now and you have learned more about it. People who have used any of the above methods long enough, know how to reap maximum benefits from it.            Studying annual and quarterly reports of companies, is considered the best way to analyze a stock by many people. Well, my experience has shown that being aware of the stock’s price range, is also key.Companies with strong financials have found to be stagnant in the market time and again. At the same time, we see them falling in price, whenever the market goes down. Knowing the direction of prices for potentially good or even great companies seems to help. This is in relation to the perceptions of market

Common Sense in Stock Market

            When Arun felt stressed out and overwhelmed about all the stocks he had bought, he decided to take a break. He expressed his concerns to his father, who advised him to go meet his friend Mr. Murali. By afternoon, Arun had reached and saw Murali in front of the online terminal. “Are you busy trading Mr. Murali?” I asked. “Hey, you are here. Take a seat Arun. Did you have your meals?” “Yeah, I did.” Arun sat on a nearby chair. “What is it? Your dad called me. Said you were worried. What’s wrong?” Murali was still attending to the terminal. “The market is down and I am not making any money. The losses I am accumulating are over the roof. Nothing is getting better.” Arun shrugged. “OK, tell me which all do you own?” “Suzlon Energy, Unitech Ltd., JP Associates, Gujarat NRE Coke, Visagar Polytex, and so on.There are a few more. I don’t remember the rest of the names as such.” Arun stared down. Murali shifted his gaze from the screen to Arun. “No wonder you a

How can you make profits consistently?

                Ranveer reached his brother Rishi’s flat at four o'clock in the evening. There, along with his brother and wife Meera, was a third person waiting for him. It was Madhuri,Meera’s sister. “She’s here with a ton of questions to ask you”, Rishi smiled. “Are your studies over?” Ranveer asked Madhuri. “I had first class in B.Com. I also passed the stock exchange’s exam and am now working at a brokerage firm here in Fort,Mumbai.” She beamed. “That’s nice. How long have you been working now?” Ranveer leaned to get his cup of coffee. “I joined about 3 months ago. I am currently in charge of a trading terminal.” Madhuri,who was standing across the room, took a seat. “And how’s your job now?” Ranveer asked. “She says it’s very stressful” Meera walked in from the kitchen with some snacks for them. She sat beside Rishi. “Stress? Stress at an age of day dreaming?” Ranveer laughed. “There are high targets we have to meet. Daily we have to make sure that the b

Market Sentiment : A Life Lesson from 2008 crisis

                  I still remember the day Tech Mahindra was listed in the Indian stock market. It was back in 2006, and I was with my colleague in front of the terminal. Offered to the public at INR 365, the stock price rose to INR 560 the same day.Value appreciation of 53% by the way, in the day of listing! Image Courtesy:Business Today We left the stock broking office that day in utter disbelief. My God, how  it is happened ? Amazingly, what followed was a three-fold increase in stock price in the next six months. I remember my manager saying, “The fundamentals are fantastic! This stock is gonna to become a multibagger, buddy!” “Wow! Seems like this fundamental thing is the real deal! I have to wrap my head around this thing !” I thought.  Those were the days when I spend a bigger chunk of my salary for buying financial magazines and books. I attended all kinds of financial market trainings that I could afford. “Why isn’t this lad going abroad to search for a job?”,

The Nature of Stocks

          Some times I feel,Stocks act like human beings. Few are restless with huge volatility and others are lazy to move. An intelligent investor should understand the nature of the stock before his investment.This is not something that can be picked  from the news or the trading terminal.The nature of a stock can be understood by looking it’s historical price movement.          The stock that rapidly rise during a rally, sometimes even faster,is like an angry young man. Technically, this type of stocks have a high beta value. Beta gives us an idea as to how much the stock price would fluctuate with the indices. A beta more than 1 implies higher volatility for the stock. For instance, a stock with beta 1.2, means that it moves 20% more than the index in the same direction. When the market falls, we can expect bigger crash in this type of stocks. Most of the real estate stocks are having high beta value and ,at the same time,many public sector stocks are having low beta v

Dalal street Techniques of Day Trading

       Image Courtesy: TV18        People looking for quick bucks often turn to day trading in stocks or derivatives. With a lesser amount of margin money, you can do big trades worth ten to fifteen times of capital. Brokerage firms give you the edge of leveraging if you are in day trading. The chance for failure is high as the chance for success.So,day trading is like a double edged sword. However, there are a lot of players who trade tactically, with clearly defined trading plan and strategies. Among these, most successful traders are from the Gujarat and Maharashtra.Market participants of Dalal Street have formulated many methods, two of which is given below.     The 15 Minute Rule     This technique involves observing price fluctuations in the first fifteen minutes after the market opens, ie., 9:15 to 9:30 am. Active traders search for a trading range develops at this point of time, which is the difference between the highest and lowest price levels.  If a stock o

Why we need a Portfolio?

  “Why I need a portfolio while I make enough money from trading?” Shahul asked me.  A regular day trader with consistent results, he knew what he was doing. So making profits or doubling investments wasn’t a concern. Scalping, the method in which traders make small profits using slight but sudden move in stock prices, was Shahul’s main technique. He focuses mainly on stocks that have reached their highest price in a year. “What do you do with your profits”, I asked, knowing that his question came from a place of ignorance and that I cannot send my answer to same place. “I spend! Shopping, vacations, you name it!” He was having fun, I could say. But being a Financial coach, I have to set him for goal based investing. “Have you planned out anything for your retirement and children’s college education?” I asked with concern. “I have Rs. 10 Lakhs in Fixed Deposits. I guess that’s enough.” Now, I can say that he was expressing more of a genuine doubt, as he looked at me