Sunday 28 December 2008
Optimists and opportunists
There are two types of people in this world. The first are the ones who are always pessimistic about each and everything. They hate life and always think the worst is going to happen. No matter what you want to do, they will tell you “That can’t be done.” and “That is impossible.” I’m sure you must have encountered a lot of such people.Especially in times like now, these people start speaking even more. They keep talking about how bad the world economy is and how millions of people will lose their jobs. They keep talking about how the world is headed for doom and how everything will collapse. Lehman Brothers went bankrupt, Bear Stearns went bust, Real estate is in trouble – so most probably you are going to be in big trouble too according to these ‘pessimists.’Unfortunately most people are this way, and even if they aren’t they let pessimists tell them what is possible and what is impossible. These are challenging times, but every challenge also brings in an opportunity in disguise.On the other hands is a very small minority who are optimists and opportunists. These people look at the global economic crash, economic slowdown and recession as one of the greatest opportunities in history. Very few people actually know that 1929 was in fact one of the best years for a small minority. The crash of 2008 and 2009 present such people another great opportunity. This opportunity isn’t only about buying cheap stocks and cheap assets, but also about new ideas.I see the US dollar crashing as it is the most oversupplied commodity on the planet, and we can certainly see many more problems in America. The old world has collapsed, but this also means that there is a great opportunity for a new world order to be established. It means that we need new entrepreneurs, investors and businesses to take the place of the old. We in India have this opportunity in front of us.People who are ignorant and pessimistic always miss out on opportunities. Simply watching the index isn’t what a smart investor does. For instance a stock like HPCL, was at around Rs. 180 when the Sensex was at 14,000 levels. However after the market fell by over 40% to 9,300 the stock was at Rs. 280.This means even though the Sensex fell by over 40%, the stock went up by over 50%. Just a few years ago there was a time when Bank of India could be bought for barely Rs. 11, even now after the correction it is priced at Rs. 280. Most people forget that immense amount of wealth has been created by a small minority, who invested in the previous bear market. What I am saying isn’t just something out of thin air, but something I have personally experienced and benefited from. There are many such instances on how, times like now offer lots of potential and opportunities.People who create wealth are people who look for solutions every time there is a problem. Sunil Mittal, of Bharti Airtel provided the solution of being able to use a mobile for Rs. 0.50 paise a minute. Before that it cost Rs. 32 a minute. He brought about a revolution which empowered millions of Indians and at the same time created tremendous amount of wealth for him.Dhirubhai Ambani, Ratan Tata, Bill Gates all have been people who have provided a solution or an improved way of doing things.You can’t be a successful at anything if you aren’t optimistic and opportunistic! This is something I have always believed and experienced throughout my life. In fact some of my best successes have been a result of crisis, problems and challenges.It is hard at first, but it is also brings out the best in us. Don’t let temporary losses, hardships, failure and challenges break your spirit, ambition and desire!
Friday 12 December 2008
Governer of india belives in a significant crisis situation
D Subbarao, Governor of the Reserve bank
of India, believes we are in a significant crisis situation and said the situation in the distant future is uncertain.
Subbarao expects banks to cut lending rates soon. He believes all measures taken by the RBI to ease liquidity were adequate and feels they have yielded some positive impact. He said that it is too early to comment on further rate cuts.
Here is a transcript of D Subbarao's comments in a press conference
On RBI monetary policy
I think the monetary policy measures that we have taken have resulted in some positive outcome. As we had said in the policy statement on Saturday, all the measures of liquidity are appropriate. We reduced repo rate and the reverse repo rate on Saturday and we expect banks to respond to that and cut their lending rates and keep credit flowing for productive sectors.
On Inflation
We make our next review of the policy variables, our projections of core inflation when we make quarterly policy view which is slated for January 27. Certainly the developments will reflect in our assessment.
The Governor after the RBI's central board meet also announced a Rs 9000 crore line of credit to the National Housing Bank or NHB and the Exim bank to revive the housing and export sectors.
He said that a refinance facility of Rs 4000 crore for NHB and Rs 5000 crore facility for Exim bank will be extended at the repo rate of 6.5%.
of India, believes we are in a significant crisis situation and said the situation in the distant future is uncertain.
Subbarao expects banks to cut lending rates soon. He believes all measures taken by the RBI to ease liquidity were adequate and feels they have yielded some positive impact. He said that it is too early to comment on further rate cuts.
Here is a transcript of D Subbarao's comments in a press conference
On RBI monetary policy
I think the monetary policy measures that we have taken have resulted in some positive outcome. As we had said in the policy statement on Saturday, all the measures of liquidity are appropriate. We reduced repo rate and the reverse repo rate on Saturday and we expect banks to respond to that and cut their lending rates and keep credit flowing for productive sectors.
On Inflation
We make our next review of the policy variables, our projections of core inflation when we make quarterly policy view which is slated for January 27. Certainly the developments will reflect in our assessment.
The Governor after the RBI's central board meet also announced a Rs 9000 crore line of credit to the National Housing Bank or NHB and the Exim bank to revive the housing and export sectors.
He said that a refinance facility of Rs 4000 crore for NHB and Rs 5000 crore facility for Exim bank will be extended at the repo rate of 6.5%.
Friday 28 November 2008
WHY WE NEED WAR ON TERROR
Here is what our security forces, government and PM should immediately do. However before you read further please promise me that you will share this with at least five people you know. Those five people will in turn share with another five and that way we can let everyone know about what we truly believe in. I believe that all of us together can have a very strong impact and this is a time for us to be united. We need to let everybody know that security is a major concern for all of us. We need our government and politicians to know that we won’t tolerate such weak security and it is high time they listened to us. A strong message needs to be sent by us that it is high time this injustice stops. I assume if you are reading further you will fulfill your promise of sharing this with at least five people.
Declare A War On Terror
We are targets of global terror and still our leadership has no proper strategy or declaration on our war on terror. Why have we not prepared ourselves still to fight this evil? Our politicians have linked terror with politics and votes – instead of fighting it. Today the voter will decide based on security. If my government can’t fight terror – I as a voter will not give my vote to them. We as Indians demand security and immediately want out government to have a strong anti-terror strategy. The terrorists have declared a war and have waged and invasion. It is time to follow the path of Arjuna who went to war with the blessing of Lord Krishna. It isn’t time for discussions – but time to wage war on this evil. What are we waiting for still?
Allocate More Funds
The first thing that needs to be done is allocate more funds towards internal security. India has around $300 billion of foreign reserve. Instead of just keeping the money and earning barely any interest, at least $30 billion should be used to beef up internal security. All this money should be invested bullet proof security–vests, more advanced automatic weapons, surveillance cameras, superior air and navy support, helicopters, advanced drone technologies, etc. To fight terror we need to invest in security and technology. This is much more important than anything else – because without security no investment or no money means anything. Our country doesn’t have a shortage of money and I hope our government seriously acts. There is no time to think – but just to act.
Tougher Terror Laws
We should stop letting terrorists go free and should give them the harshest possible punishment. It is high time we start ignoring so called Human Rights groups who disappear when terrorists slaughter innocent men and women, but tell all of us we should be soft on terror. These terrorists are not humans and deserve no Human Right. More power has to be given to our security forces to not fear and take action against terror. I have been told that we don’t even have a terror law now. Our government can not continue this way – because terror is a major challenge. There should be no mercy shown to terrorists.
Learn From Countries Like America
America after 9/11 invested heavily into internal security and hasn’t had any terrorist attack. We need to learn from them and work with their forces. They are using extremely advanced technology and equipment to make their country a more secure place. No matter what they have done with the economy- we should learn from them in the area of anti-terror security.
Technology
Today the terrorists have automatic weapons, while a large part of our police force is under-equipped only with pistols and lathis. We need to invest in advanced technologies which can be used in situation of urban areas. Today robotic drones that can be controlled by remote control are all available. If we had such technology we could have sent these drones inside hotels to take out terrorists while making sure hostages are safe. We have a brave police force and army – we need to make sure we respect their bravery and give him what they deserve.
Surveillance camera, tapping of phones and e-mail, helicopters, armoured vehicles, navy ships patrolling the coast, bomb detection equipment should all be used. Every major hotel, mall and office needs to have better technology and equipment to fight terror. A hotel like Taj or Oberoi need to have armed security guards who can immediately take out a threat.
Communications Monitoring
Complete monitoring of communications channels is needed. That way we can detect terror attacks before they actually happen. Places like America , UK and Israel all are doing this. We need to do this too. Our freedom is more important than what a few people might think. Every phone and e-mail should be monitored. Major cities should all be captured by surveillance cameras to detect any suspicious movements. Cities like London have invested billions to make sure there are CCTV camera all over the city – from streets to busses to trains. We need stronger intelligence.
Costal Safety
These terrorists came from sea and landed on the coast near the Gateway of India. It is very sad that anyone can enter our country this way. We need a stronger costal guard force which can detect such threats and take them out even before they enter. The entire Western and Eastern coast needs a much larger and stronger force.
Media Awareness and Education
There is a strong need that the media is educated about how they deal and report terror. Unfortunately a large part of the media isn’t trained in dealing with such situations and should not hamper investigation and police action. With the media and civilians around, it becomes difficult for security forces to detect terror and take them out. People need to understand that they should stay of the streets and not surround the area. There is a real threat and it isn’t some sort of tamasha. With civilians surrounding the area things become even more difficult. Education in the areas of evacuation, first aid and group action needs to be given to all of us to cope with terror with better.
Global Elite Force
Terror is a major problem facing all countries in the world. A global elite anti-terror force needs to be formed that will be able to fight terror anywhere in the world. Today we all have a common enemy – we need a common force that will fight this enemy. This force should be able to take out terror targets and suspects anywhere in the world and archaic laws should not slow them down. Anyone who tries to promote feeling of hate or terror – should be eliminated immediately by this force. We can see that the terrorists are all young mis-guided people who have been brainwashed. The people behind this brainwashing need to be eliminated.
This Isn’t About Religion
These people claim to be fighting for Islam and for Muslims – but we all know that this isn’t true. They kill anyone and everyone. This isn’t a time to label terror with religion. It isn’t a time for politicians to fight amongst each other – but unite and fight together as Indians.
Terrorists want to spread hate and divide this world and nation on the basis of religion. We shouldn’t let them succeed at doing this. Today we are all one – and when terror attacks they don’t just kill people of one religion. They kill everybody - Muslims, Hindus, Christians, Jews, Atheists. This is a war of good vs. evil and not about religion. This is a war where we need to fight evil which kills children and destroys families.
We need to pray for everyone who has been affected by terror and hope there is peace. We need to pray that these terrorists are blessed with intelligence that makes them not do such vicious crimes on humanity. We need to pray and hope there is a lot more love on this planet. Irrespective of how much money we have(or don’t have) – we should realize that at the end of the day we are all human beings who want peace, love and a safe and happy life.
I’m sure together we will be able to make this world a better and safer place where there is more happiness and love.
Declare A War On Terror
We are targets of global terror and still our leadership has no proper strategy or declaration on our war on terror. Why have we not prepared ourselves still to fight this evil? Our politicians have linked terror with politics and votes – instead of fighting it. Today the voter will decide based on security. If my government can’t fight terror – I as a voter will not give my vote to them. We as Indians demand security and immediately want out government to have a strong anti-terror strategy. The terrorists have declared a war and have waged and invasion. It is time to follow the path of Arjuna who went to war with the blessing of Lord Krishna. It isn’t time for discussions – but time to wage war on this evil. What are we waiting for still?
Allocate More Funds
The first thing that needs to be done is allocate more funds towards internal security. India has around $300 billion of foreign reserve. Instead of just keeping the money and earning barely any interest, at least $30 billion should be used to beef up internal security. All this money should be invested bullet proof security–vests, more advanced automatic weapons, surveillance cameras, superior air and navy support, helicopters, advanced drone technologies, etc. To fight terror we need to invest in security and technology. This is much more important than anything else – because without security no investment or no money means anything. Our country doesn’t have a shortage of money and I hope our government seriously acts. There is no time to think – but just to act.
Tougher Terror Laws
We should stop letting terrorists go free and should give them the harshest possible punishment. It is high time we start ignoring so called Human Rights groups who disappear when terrorists slaughter innocent men and women, but tell all of us we should be soft on terror. These terrorists are not humans and deserve no Human Right. More power has to be given to our security forces to not fear and take action against terror. I have been told that we don’t even have a terror law now. Our government can not continue this way – because terror is a major challenge. There should be no mercy shown to terrorists.
Learn From Countries Like America
America after 9/11 invested heavily into internal security and hasn’t had any terrorist attack. We need to learn from them and work with their forces. They are using extremely advanced technology and equipment to make their country a more secure place. No matter what they have done with the economy- we should learn from them in the area of anti-terror security.
Technology
Today the terrorists have automatic weapons, while a large part of our police force is under-equipped only with pistols and lathis. We need to invest in advanced technologies which can be used in situation of urban areas. Today robotic drones that can be controlled by remote control are all available. If we had such technology we could have sent these drones inside hotels to take out terrorists while making sure hostages are safe. We have a brave police force and army – we need to make sure we respect their bravery and give him what they deserve.
Surveillance camera, tapping of phones and e-mail, helicopters, armoured vehicles, navy ships patrolling the coast, bomb detection equipment should all be used. Every major hotel, mall and office needs to have better technology and equipment to fight terror. A hotel like Taj or Oberoi need to have armed security guards who can immediately take out a threat.
Communications Monitoring
Complete monitoring of communications channels is needed. That way we can detect terror attacks before they actually happen. Places like America , UK and Israel all are doing this. We need to do this too. Our freedom is more important than what a few people might think. Every phone and e-mail should be monitored. Major cities should all be captured by surveillance cameras to detect any suspicious movements. Cities like London have invested billions to make sure there are CCTV camera all over the city – from streets to busses to trains. We need stronger intelligence.
Costal Safety
These terrorists came from sea and landed on the coast near the Gateway of India. It is very sad that anyone can enter our country this way. We need a stronger costal guard force which can detect such threats and take them out even before they enter. The entire Western and Eastern coast needs a much larger and stronger force.
Media Awareness and Education
There is a strong need that the media is educated about how they deal and report terror. Unfortunately a large part of the media isn’t trained in dealing with such situations and should not hamper investigation and police action. With the media and civilians around, it becomes difficult for security forces to detect terror and take them out. People need to understand that they should stay of the streets and not surround the area. There is a real threat and it isn’t some sort of tamasha. With civilians surrounding the area things become even more difficult. Education in the areas of evacuation, first aid and group action needs to be given to all of us to cope with terror with better.
Global Elite Force
Terror is a major problem facing all countries in the world. A global elite anti-terror force needs to be formed that will be able to fight terror anywhere in the world. Today we all have a common enemy – we need a common force that will fight this enemy. This force should be able to take out terror targets and suspects anywhere in the world and archaic laws should not slow them down. Anyone who tries to promote feeling of hate or terror – should be eliminated immediately by this force. We can see that the terrorists are all young mis-guided people who have been brainwashed. The people behind this brainwashing need to be eliminated.
This Isn’t About Religion
These people claim to be fighting for Islam and for Muslims – but we all know that this isn’t true. They kill anyone and everyone. This isn’t a time to label terror with religion. It isn’t a time for politicians to fight amongst each other – but unite and fight together as Indians.
Terrorists want to spread hate and divide this world and nation on the basis of religion. We shouldn’t let them succeed at doing this. Today we are all one – and when terror attacks they don’t just kill people of one religion. They kill everybody - Muslims, Hindus, Christians, Jews, Atheists. This is a war of good vs. evil and not about religion. This is a war where we need to fight evil which kills children and destroys families.
We need to pray for everyone who has been affected by terror and hope there is peace. We need to pray that these terrorists are blessed with intelligence that makes them not do such vicious crimes on humanity. We need to pray and hope there is a lot more love on this planet. Irrespective of how much money we have(or don’t have) – we should realize that at the end of the day we are all human beings who want peace, love and a safe and happy life.
I’m sure together we will be able to make this world a better and safer place where there is more happiness and love.
Monday 27 October 2008
MARKET EXAM
Every day and in every trade, the market gives us an examination. The results are unforgiving. Get the examination question correct and the market gives you money. Get the examination question incorrect and the market takes money from you. Every trading decision to buy, or sell, or just observe is a test of all the skills and knowledge and experience you have accumulated. Unlike on-the-job training, the market gives you no latitude for error, for past successes, or experience. Every test is for real, and every test pass or fail carries the same consequences. It is a demanding task. Over ten weeks we give you a less demanding test – at least in terms of consequences. These questions are designed to help you to evaluate your knowledge about trading and help to identify areas where you may needs to do some more homework.
Friday 24 October 2008
Cash is king
Sometimes finding a great investment starts with going through several balance sheets and discovering something. Such type of research is usually very time consuming and intensive, and to be honest not meant for everybody.
Someone who is a doctor or an engineer, might not have so much time to browse through the financial statements of companies. But the rewards that one gets when such companies are found are truly incredible. It is almost like someone mining for gold and striking gold. I spend much more time researching every time markets correct as this is the best time to strike gold. I have discovered a handful of great companies which can do wonders to my portfolio in the coming few years. I’ll share one here with you, in which I have started buying.Let us say there is a candy shop and it has Rs. 4 lying in it’s cash box. Now let us say this entire candy shop has zero debt and the entire business is being sold for Rs. 4.
Would you buy it?
Still thinking what you would do?
Well if I was in your place, I wouldn’t think for a second and would immediately buy it for Rs. 4 before anybody else gets it. Because all I need to do is put Rs. 4 to buy the business and take my Rs. 4 from the cash box back, and the entire business is mine for free.
I’m sure most of you might be thinking which fool would sell their business for just Rs. 4 even though they have Rs. 4 cash with them. Well in the real world nobody would do it, but stock markets are irrational and no wonder we can actually find people doing such things. In fact we have a candy shop that has reserves more than Rs. 11,000 crores being sold for just around Rs. 4,000 crores . This isn’t even considering other fixed assets or net current assets.
Especially with the recent correction and global sentiment of doom and depression, people seem to forget that things change very fast. The very people who were buying the same companies 7-8 times the price until six months ago, today aren’t even looking at them. This is great news for all those who want to buy and create wealth.
Now this company which I have started buying into not only assets and cash much more than its market cap, and not only does it have a book value which is almost three times its current share price. It also has zero debt – which means it doesn’t have any interest burden. In times like now cash is king, queen, prince, everything!
Whenever I discover such companies and look at their balance sheets, it brings a big smile on my face and gets me extremely excited. I know most normal people don’t get excited looking at balance sheets and seeing the cash and book value. But then as I always say people who create wealth do things that others don’t. Being friendly with financial statements and understanding business is very important to succeed as an investor.
A part of me wants to jump in and buy as much as I can with whatever money I have, as such opportunities don’t come everyday. But of course experience (losses in the past due to over exposure) have taught me to never do that and to always buy gradually and never ever allocate all your funds to a single stock, because most probably than not after you buy it, there are chances of it going down.
However I feel that every investor should study this company and see how assets truly get mis-priced. A regular investor can buy these assets at much cheaper prices than even what big Mutual Funds and FIIs have bought it at. Anybody who calls himself an investor and hasn’t noticed or studied this company yet, will probably read about it three to four years down the line and how it was a great investment picked up by a few during the stock market crash of 2008.
Study history and it has always been this way. At the moment the stock might be ignored and down in the dumps, but one of these days it is going to have every Tarun, Dinesh and Harjeet running after it. That day will be the time for me to start thinking about selling it and making a nice hefty profit.As in the past I’m going to share this company with you. However I feel more than from just an investment angle please look at it from an educational angle.
Happy Wealth Creation!
Someone who is a doctor or an engineer, might not have so much time to browse through the financial statements of companies. But the rewards that one gets when such companies are found are truly incredible. It is almost like someone mining for gold and striking gold. I spend much more time researching every time markets correct as this is the best time to strike gold. I have discovered a handful of great companies which can do wonders to my portfolio in the coming few years. I’ll share one here with you, in which I have started buying.Let us say there is a candy shop and it has Rs. 4 lying in it’s cash box. Now let us say this entire candy shop has zero debt and the entire business is being sold for Rs. 4.
Would you buy it?
Still thinking what you would do?
Well if I was in your place, I wouldn’t think for a second and would immediately buy it for Rs. 4 before anybody else gets it. Because all I need to do is put Rs. 4 to buy the business and take my Rs. 4 from the cash box back, and the entire business is mine for free.
I’m sure most of you might be thinking which fool would sell their business for just Rs. 4 even though they have Rs. 4 cash with them. Well in the real world nobody would do it, but stock markets are irrational and no wonder we can actually find people doing such things. In fact we have a candy shop that has reserves more than Rs. 11,000 crores being sold for just around Rs. 4,000 crores . This isn’t even considering other fixed assets or net current assets.
Especially with the recent correction and global sentiment of doom and depression, people seem to forget that things change very fast. The very people who were buying the same companies 7-8 times the price until six months ago, today aren’t even looking at them. This is great news for all those who want to buy and create wealth.
Now this company which I have started buying into not only assets and cash much more than its market cap, and not only does it have a book value which is almost three times its current share price. It also has zero debt – which means it doesn’t have any interest burden. In times like now cash is king, queen, prince, everything!
Whenever I discover such companies and look at their balance sheets, it brings a big smile on my face and gets me extremely excited. I know most normal people don’t get excited looking at balance sheets and seeing the cash and book value. But then as I always say people who create wealth do things that others don’t. Being friendly with financial statements and understanding business is very important to succeed as an investor.
A part of me wants to jump in and buy as much as I can with whatever money I have, as such opportunities don’t come everyday. But of course experience (losses in the past due to over exposure) have taught me to never do that and to always buy gradually and never ever allocate all your funds to a single stock, because most probably than not after you buy it, there are chances of it going down.
However I feel that every investor should study this company and see how assets truly get mis-priced. A regular investor can buy these assets at much cheaper prices than even what big Mutual Funds and FIIs have bought it at. Anybody who calls himself an investor and hasn’t noticed or studied this company yet, will probably read about it three to four years down the line and how it was a great investment picked up by a few during the stock market crash of 2008.
Study history and it has always been this way. At the moment the stock might be ignored and down in the dumps, but one of these days it is going to have every Tarun, Dinesh and Harjeet running after it. That day will be the time for me to start thinking about selling it and making a nice hefty profit.As in the past I’m going to share this company with you. However I feel more than from just an investment angle please look at it from an educational angle.
Happy Wealth Creation!
Saturday 18 October 2008
Sensex breaches 10K, no bottom in sight
It was an absolutely dismal close to this week. The worse nightmare is in, we are in four digits now for the Sensex, the psychological level of 10,000 has been broken for the first time since July 2006 marking a new low for 2008, a multi year low actually and even the Nifty has plunged below its leaning support level of 3,100. So whichever way you look at it, the lows are not holding, fresh lows have happened this week and psychologically important levels have got broken up. 10,000 may just be a level but it makes a lot of difference to see the Sensex at four digits after seeing it at 21,000 just a few months back. So, this bear market is in full flow right now. There are no signs of a bottom yet and we are crumbling with every passing day.
We had a big sell off on Friday and that was led by the power sector with stocks like NTPC, Reliance Infra, Suzlon, Siemens, BHEL, L&T all of them are breaking down. ICICI Bank took a huge knock, Unitech and DLF continue their bottom less fall and other largecap names like Reliance have got hammered up with not too many places to hide, the breadth on Friday has also been quite bad as well.
We had a big sell off on Friday and that was led by the power sector with stocks like NTPC, Reliance Infra, Suzlon, Siemens, BHEL, L&T all of them are breaking down. ICICI Bank took a huge knock, Unitech and DLF continue their bottom less fall and other largecap names like Reliance have got hammered up with not too many places to hide, the breadth on Friday has also been quite bad as well.
How to Win Friends and Influence People- Dale Carnegie
Part one
Fundamental Techniques in Handling People
1)Don't criticize, condemn or complain.
2)Give honest and sincere appreciation.
3)Arouse in the other person an eager want.
Part Two
Six ways to make people like you
1)Become genuinely interested in other people.
Smile.
2)Remember that a person's name is to that person the sweetest and most important sound in any language.
3)Be a good listener. Encourage others to talk about themselves.
Talk in terms of the other person's interests.
4)Make the other person feel important - and do it sincerely.
Part Three
Win people to your way of thinking
1)The only way to get the best of an argument is to avoid it.
2)Show respect for the other person's opinions. Never say, "You're wrong."
3)If you are wrong, admit it quickly and emphatically.
4)Begin in a friendly way.
5)Get the other person saying "yes, yes" immediately.
6)Let the other person do a great deal of the talking.
7)Let the other person feel that the idea is his or hers.
8)Try honestly to see things from the other person's point of view.
9)Be sympathetic with the other person's ideas and desires.
10)Appeal to the nobler motives.
11)Dramatize your ideas.
12)Throw down a challenge.
Part Four
Be a Leader: How to Change People Without Giving Offense or Arousing Resentment
A leader's job often includes changing your people's attitudes and behavior. Some suggestions to accomplish this:
1)Begin with praise and honest appreciation.
2)Call attention to people's mistakes indirectly.
3)Talk about your own mistakes before criticizing the other person.
4)Ask questions instead of giving direct orders.
5)Let the other person save face.
6)Praise the slightest improvement and praise every improvement. Be "hearty in your
7)approbation and lavish in your praise."
8)Give the other person a fine reputation to live up to.
9)Use encouragement. Make the fault seem easy to correct.
10)Make the other person happy about doing the thing you suggest.
Fundamental Techniques in Handling People
1)Don't criticize, condemn or complain.
2)Give honest and sincere appreciation.
3)Arouse in the other person an eager want.
Part Two
Six ways to make people like you
1)Become genuinely interested in other people.
Smile.
2)Remember that a person's name is to that person the sweetest and most important sound in any language.
3)Be a good listener. Encourage others to talk about themselves.
Talk in terms of the other person's interests.
4)Make the other person feel important - and do it sincerely.
Part Three
Win people to your way of thinking
1)The only way to get the best of an argument is to avoid it.
2)Show respect for the other person's opinions. Never say, "You're wrong."
3)If you are wrong, admit it quickly and emphatically.
4)Begin in a friendly way.
5)Get the other person saying "yes, yes" immediately.
6)Let the other person do a great deal of the talking.
7)Let the other person feel that the idea is his or hers.
8)Try honestly to see things from the other person's point of view.
9)Be sympathetic with the other person's ideas and desires.
10)Appeal to the nobler motives.
11)Dramatize your ideas.
12)Throw down a challenge.
Part Four
Be a Leader: How to Change People Without Giving Offense or Arousing Resentment
A leader's job often includes changing your people's attitudes and behavior. Some suggestions to accomplish this:
1)Begin with praise and honest appreciation.
2)Call attention to people's mistakes indirectly.
3)Talk about your own mistakes before criticizing the other person.
4)Ask questions instead of giving direct orders.
5)Let the other person save face.
6)Praise the slightest improvement and praise every improvement. Be "hearty in your
7)approbation and lavish in your praise."
8)Give the other person a fine reputation to live up to.
9)Use encouragement. Make the fault seem easy to correct.
10)Make the other person happy about doing the thing you suggest.
Sunday 17 August 2008
India Needs A New Independence!
Sixty one years ago we got Independence from the British. Since that time a lot has changed. From being a British colony we have gone to buy British company's such as Jaguar-Land Rover, Tetley and Corus. This is not only good for us, but also for the British who are getting the opportunity to benefit from global management skills and finance. It ensures employment for thousands of employees and increases their efficiency. From being a nation afraid of foreign competition, today we are ready for competition of every sort and thrive in it.From a time when we had to wait for a year to get a phone, today we can get a cell phone within minutes and have amongst the cheapest phone rates in the world. I am proud to be an Indian and very lucky to be born in a time when India is getting ready to become a major global economic power. But at the same time we as a nation and as people have always believed in respecting other civilizations and not infringing on their rights and freedoms. Respect, equality, peace and dignity should be something that the entire world should have and something which we should share with the rest of the world.I hope every Indian is proud of our nation and proud of our culture and heritage which is several thousand years old.But today we are desperately in need of a New Independence movement.We need Independence from poverty, unemployment, illiteracy, hate, corruption, bureaucracy and inefficiency. We need Independence from pollution and environmental degradation. We need Independence from having the attitude and willingness to accept what is wrong. We need Independence from being afraid to learn new things, being afraid to fail and being afraid of change. We need Independence from fear.India needs this New Independence and it is in our hands to make our nation truly free. We can all do this by doing our dharma. We all need to do our duty with love, dedication, passion and commitment. If we all start doing our dharma as well as we can, things will start changing. If everybody in our nation does their duty, it wouldn't take too long for things to change.Today there isn't a shortage of money in our country. Just that the money isn’t being tapped correctly. In fact today India's balance sheet is much more favourable than America's. Imagine how much more wealth can be created by everybody if millions of people got access to basic necessities such as electricity, water and education. It would spiral of a positive cycle of productivity and increase demand.The Government today has billions of dollars with it. Instead of keeping a currency which is going to lose value over time, these funds should be invested. This can bring New Independence to millions of people and this also means a great economic opportunity.As individuals we have the power to not only do what we are doing with complete love and dedication, but also spread the message of change. We can spread and share ideas which will go into building a nation and help build India into an economic and cultural super power. We can share thoughts which motivate and inspire people around us. Everything great first starts out in our minds. Our minds need to think about what is possible and how we can achieve it. That is what I have always believed and also experienced personally as a Happionaire. We Indians are hard working and I know that if our brothers and sisters across the vast nation are given opportunities, they too can do wonders. I'm sure we will be able to find hundreds of more Dhirubhai Ambanis, Ratan TATAs and Kishore Biyanis.I have a feeling that it will happen. Something inside me tells me that in the next 10 years we are going to see radical changes in India and more and more entrepreneurs are going to go out looking for opportunities across our great nation. We all have an inner voice and that voice somehow is always true. Isn’t it?I wish all of you have a very Happy Independence Day and I hope that with the grace of God we shall all be wishing each other a very Happy New Independence Day in the coming future.Feel free to share this article with every other Indian and spread the joy.Keep smiling!
Wednesday 6 August 2008
Crude, monsoon hold key to mkts rally now
I feels that the markets have seen some momentum despite the weakness in the US. There is a large build up in stock futures, which is positive for sentiment.I thinks that the monsoon remains a worry but crude is the biggest risk. One can see further rally if crude falls and monsoon improves.
Suzlon energy-Long term pick
IIFL has recommended buy rating on Suzlon Energy, with 12-month price target of Rs 280, in its report dated 1 August, 2008.
“Suzlon reported consolidated sales of Rs 27.6 billion, up 42% YoY, and PAT of Rs 1.65 billion (excluding MTM losses of Rs 1.64 billion) for 1QFY09. Both were significantly higher than our estimates, mainly due to better than expected growth and higher profitability in the wind business.
With ramp-up in Hansen’s gearbox production capacity, revenue from the gearbox business rose 58% YoY in 1QFY09 and accounted for 28% of Suzlon’s total revenue in the quarter. OPM on gearboxes expanded to 14% from 7% a year ago; consequently, contribution of this business to operating profit rose to 26% from 19% a year ago (details inside). Although WTG sales volumes rose only 7% YoY to 338MW, average per-MW realisation rose 16% YoY to Rs 54.3m/MW. Gross margin also rose to Rs 21m/MW from Rs 15.3m/MW a year ago. Management attributed the increase to: 1) improvement in the product mix; 2) favourable currency impact (INR depreciated against USD, EUR and AUD); and 3) project work. Almost 70% of the YoY increase in the quarter’s operating profit came from the wind business”.
“Suzlon has an order book of 3,039MW, formed mostly of international deliveries. Its order book has stagnated over the last few quarters as it has been unable to increase share of international deliveries. We maintain our FY09ii and FY10ii estimates as we believe that: 1) the current order book is sufficient to secure FY09 revenues; 2) the company has more than 6-8 months to grow its international order book for FY10; and 3) the rupee remains weak against USD and euro”.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
“Suzlon reported consolidated sales of Rs 27.6 billion, up 42% YoY, and PAT of Rs 1.65 billion (excluding MTM losses of Rs 1.64 billion) for 1QFY09. Both were significantly higher than our estimates, mainly due to better than expected growth and higher profitability in the wind business.
With ramp-up in Hansen’s gearbox production capacity, revenue from the gearbox business rose 58% YoY in 1QFY09 and accounted for 28% of Suzlon’s total revenue in the quarter. OPM on gearboxes expanded to 14% from 7% a year ago; consequently, contribution of this business to operating profit rose to 26% from 19% a year ago (details inside). Although WTG sales volumes rose only 7% YoY to 338MW, average per-MW realisation rose 16% YoY to Rs 54.3m/MW. Gross margin also rose to Rs 21m/MW from Rs 15.3m/MW a year ago. Management attributed the increase to: 1) improvement in the product mix; 2) favourable currency impact (INR depreciated against USD, EUR and AUD); and 3) project work. Almost 70% of the YoY increase in the quarter’s operating profit came from the wind business”.
“Suzlon has an order book of 3,039MW, formed mostly of international deliveries. Its order book has stagnated over the last few quarters as it has been unable to increase share of international deliveries. We maintain our FY09ii and FY10ii estimates as we believe that: 1) the current order book is sufficient to secure FY09 revenues; 2) the company has more than 6-8 months to grow its international order book for FY10; and 3) the rupee remains weak against USD and euro”.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Monday 30 June 2008
Have Politicians Forgotten The Theory Of Karma?
Politically things are not that good in India. I have always believed that whatever good has happened in our country has been because of people like you and me and never because of politicians. During the time of independence we had great people giving up their lives for the freedom of our nation, but after that we had politicians who were not afraid to take away lives for their own benefit. Not letting the economy and the common man prosper is the worst form of mass murder according to me.To be honest I feel that politicians all over the world are the same irrespective of which political party they belong too. However they unfortunately have forgotten the theory of Karma. They have forgotten that as we sow, so shall we reap.For example today our country has extremely high inflation and this is affecting all of us. But does it affect the ministers who are living in castles and have everything paid for with our taxes? Inflation can be reduced significantly if we increased efficiency and supply. We could cut down our consumption of fossil fuels by having a world class mass transit systems in major cities running on nuclear power. Imagine how much nicer it would be if we had a mass transit system like major cities in China. We would all reduce the use of cars and make sure we used the public transport.Instead of doing what is needed, our politicians are busy hurling chairs at each other in the parliament and constantly arguing on petty issues. I find it disgusting when politicians come on TV and take credit for whatever economic growth we have. The sectors which have had growth have had it because of entrepreneurs who in spite of politicians were able to succeed. It has been because of intelligent and hard working people who have made sure their organisations and business grows. All that politicians would have done is eaten money and filled their own Swiss bank accounts.Wrong policies and decisions by the government bodies affect all of us. They affect our investments and our lives. For instance if the nuclear deal doesn’t go through, it would certainly affect our investment grading abroad. A nation whose Prime Minister can’t decide on his own is never an encouraging sign for investors. It might lead to capital rushing out of the country in the short term.I agree that the need for politicians has reduced compared to what it was say twenty years ago and that is been one good thing. But still we have parties like the Left trying to take our country back to the Stone Age. Not that other political parties are great. Personally I am of the view that inflation in India is not just around 11%, but much higher. Figures can be manipulated, and they always are. Just look at the prices of things we use in our daily lives, they have gone up by more than 40% in a matter of a few months.Inflation, political problems, energy crisis, credit crunch, higher interest rates, sub-prime problem are all going to affect the markets. Investors are usually extremely jumpy and do not take rational decisions. Simply on hearing all this there is a flight of capital which has been bringing the markets down. Markets can go down further- I don’t know if they will or they won’t. Most retail investors who do not believe in value and do not bother too much about fundamentals are constantly grumbling and cursing everything now. Many of them have gone bankrupt due to taking leverage in the form of trading in futures. I understand their problem, however I wish that all of them learn from their mistakes and try to use this time as an opportunity to learn more. I too have made such mistakes in the past, but luckily I have learnt from them.For value investors the markets going down is a great opportunity to buy, however the sad part is that most retail investors do not think this way and now even if they do, they might not have sufficient funds to benefit from this. Many will panic and sell and again after a few years will curse their luck for selling so low. My advice to them would be that use this opportunity has a time to start afresh. Every day is a new day and every day gives us the chance to start a new life. Once Edison had his whole lab burnt. Lots of his work and research was there in the lab, but he still was very happy. People were surprised and wondered why is he smiling even though his lab is burnt. He told them that all his mistakes have been burnt and he has the opportunity to start afresh. If you have made mistakes, do not worry and use this time to learn.Less than around 4% of India’s savings goes into the stock markets. As more and more people are educated about investing, this figure is bound to rise. As this figures rises, unethical operators and dirty money belonging to politicians will be less likely to control the stock markets. As more and more people have a stake in our country’s growth politicians will be more responsible to make sure that their decisions are beneficial to investors and the capital markets. This correction has been one of the best things that could have happened for any value investor. It is giving us a chance to buy assets into an economy which still has a long way to go.I am a strong believer in the theory of Karma. If we work hard today, learn more and invest in knowledge we will be rewarded. I was at the BSE building the other day and a good friend there who has been a part of the markets as well as the BSE for several decades very beautifully told me something from the Gita, which he has used in the markets. He told me that the Gita tells us to do our duty and not worry about the fruits and rewards. If we do our duty we will get the fruits either sooner or later. The same applies to the markets. We need to do our work and not worry about the returns in the short term. If a business is good, it shall be discovered by the masses sooner or later. These ideas are not very popular, but these are the very ideas which have stood the test of time. This simple idea runs into every area of our life. Let us all sow seeds of good in every area of our life. Do you agree with this way of thinking?
Keep smiling and feel free to share whatever you read here with friends, family and loved ones!
Politically things are not that good in India. I have always believed that whatever good has happened in our country has been because of people like you and me and never because of politicians. During the time of independence we had great people giving up their lives for the freedom of our nation, but after that we had politicians who were not afraid to take away lives for their own benefit. Not letting the economy and the common man prosper is the worst form of mass murder according to me.To be honest I feel that politicians all over the world are the same irrespective of which political party they belong too. However they unfortunately have forgotten the theory of Karma. They have forgotten that as we sow, so shall we reap.For example today our country has extremely high inflation and this is affecting all of us. But does it affect the ministers who are living in castles and have everything paid for with our taxes? Inflation can be reduced significantly if we increased efficiency and supply. We could cut down our consumption of fossil fuels by having a world class mass transit systems in major cities running on nuclear power. Imagine how much nicer it would be if we had a mass transit system like major cities in China. We would all reduce the use of cars and make sure we used the public transport.Instead of doing what is needed, our politicians are busy hurling chairs at each other in the parliament and constantly arguing on petty issues. I find it disgusting when politicians come on TV and take credit for whatever economic growth we have. The sectors which have had growth have had it because of entrepreneurs who in spite of politicians were able to succeed. It has been because of intelligent and hard working people who have made sure their organisations and business grows. All that politicians would have done is eaten money and filled their own Swiss bank accounts.Wrong policies and decisions by the government bodies affect all of us. They affect our investments and our lives. For instance if the nuclear deal doesn’t go through, it would certainly affect our investment grading abroad. A nation whose Prime Minister can’t decide on his own is never an encouraging sign for investors. It might lead to capital rushing out of the country in the short term.I agree that the need for politicians has reduced compared to what it was say twenty years ago and that is been one good thing. But still we have parties like the Left trying to take our country back to the Stone Age. Not that other political parties are great. Personally I am of the view that inflation in India is not just around 11%, but much higher. Figures can be manipulated, and they always are. Just look at the prices of things we use in our daily lives, they have gone up by more than 40% in a matter of a few months.Inflation, political problems, energy crisis, credit crunch, higher interest rates, sub-prime problem are all going to affect the markets. Investors are usually extremely jumpy and do not take rational decisions. Simply on hearing all this there is a flight of capital which has been bringing the markets down. Markets can go down further- I don’t know if they will or they won’t. Most retail investors who do not believe in value and do not bother too much about fundamentals are constantly grumbling and cursing everything now. Many of them have gone bankrupt due to taking leverage in the form of trading in futures. I understand their problem, however I wish that all of them learn from their mistakes and try to use this time as an opportunity to learn more. I too have made such mistakes in the past, but luckily I have learnt from them.For value investors the markets going down is a great opportunity to buy, however the sad part is that most retail investors do not think this way and now even if they do, they might not have sufficient funds to benefit from this. Many will panic and sell and again after a few years will curse their luck for selling so low. My advice to them would be that use this opportunity has a time to start afresh. Every day is a new day and every day gives us the chance to start a new life. Once Edison had his whole lab burnt. Lots of his work and research was there in the lab, but he still was very happy. People were surprised and wondered why is he smiling even though his lab is burnt. He told them that all his mistakes have been burnt and he has the opportunity to start afresh. If you have made mistakes, do not worry and use this time to learn.Less than around 4% of India’s savings goes into the stock markets. As more and more people are educated about investing, this figure is bound to rise. As this figures rises, unethical operators and dirty money belonging to politicians will be less likely to control the stock markets. As more and more people have a stake in our country’s growth politicians will be more responsible to make sure that their decisions are beneficial to investors and the capital markets. This correction has been one of the best things that could have happened for any value investor. It is giving us a chance to buy assets into an economy which still has a long way to go.I am a strong believer in the theory of Karma. If we work hard today, learn more and invest in knowledge we will be rewarded. I was at the BSE building the other day and a good friend there who has been a part of the markets as well as the BSE for several decades very beautifully told me something from the Gita, which he has used in the markets. He told me that the Gita tells us to do our duty and not worry about the fruits and rewards. If we do our duty we will get the fruits either sooner or later. The same applies to the markets. We need to do our work and not worry about the returns in the short term. If a business is good, it shall be discovered by the masses sooner or later. These ideas are not very popular, but these are the very ideas which have stood the test of time. This simple idea runs into every area of our life. Let us all sow seeds of good in every area of our life. Do you agree with this way of thinking?
Keep smiling and feel free to share whatever you read here with friends, family and loved ones!
Wednesday 7 May 2008
Mail sent by Narayan Murthy to all Infosys staff
It's half past 8 in the office but the lights are still on... PCs still running, coffee machines still buzzing... And who's at work? Most of them ??? Take a closer look... All or most specimens are ?? Something male species of the human race... Look closer... again all or most of them are bachelors... And why are they sitting late? Working hard? No way!!! Any guesses??? Let's ask one of them... Here's what he says... 'What's there 2 do after going home...Here we get to surf, AC, phone, food, coffee that is why I am working late...Importantly no bossssssss!! !!!!!!!!!' This is the scene in most research centers and software companies and other off-shore offices. Bachelors 'Time-passing' during late hours in the office just bcoz they say they've nothing else to do... Now what r the consequences. .. 'Working' (for the record only) late hours soon becomes part of the institute or company culture. With bosses more than eager to provide support to those 'working' late in the form of taxi vouchers, food vouchers and of course good feedback, (oh, he's a hard worker... goes home only to change..!!). They aren't helping things too... To hell with bosses who don't understand the difference between 'sitting' late and 'working' late!!! Very soon, the boss start expecting all employees to put in extra working hours. So, My dear Bachelors let me tell you, life changes when u get married and start having a family... office is no longer a priority, family is... and That's when the problem starts... b'coz u start having commitments at home too. For your boss, the earlier 'hardworking' guy suddenly seems to become a 'early leaver' even if u leave an hour after regular time... after doing the same amount of work. People leaving on time after doing their tasks for the day are labelled as work-shirkers. .. Girls who thankfully always (its changing nowadays... though) leave on time are labelled as 'not up to it'. All the while, the bachelors pat their own backs and carry on 'working' not realizing that they r spoiling the work culture at their own place and never realize that they would have to regret at one point of time. So what's the moral of the story?? * Very clear, LEAVE ON TIME!!! * Never put in extra time ' unless really needed ' * Don't stay back unnecessarily and spoil your company work culture which will in turn cause inconvenience to you and your colleagues. There are hundred other things to do in the evening.. Learn music... Learn a foreign language... Try a sport... TT, cricket..... .... Importantly, get a girl friend or boy friend, take him/her around town... * And for heaven's sake, net cafe rates have dropped to an all-time low (plus, no fire-walls) and try cooking for a change. Take a tip from the Smirnoff ad: *'Life's calling, where are you??'* Please pass on this message to all those colleagues and please do it before leaving time, don't stay back till midnight to forward this!!! IT'S A TYPICAL INDIAN MENTALITY THAT WORKING FOR LONG HOURS MEANS VERY HARD WORKING & 100% COMMITMENT ETC. PEOPLE WHO REGULARLY SIT LATE IN THE OFFICE DON'T KNOW TO MANAGE THEIR TIME. SIMPLE !
Regards, NARAYAN MURTHY.
Regards, NARAYAN MURTHY.
Tuesday 15 April 2008
Infosys FY08 net profit at Rs 4659 cr; EPS at Rs 81.56
Infosys Technologies has announced its fourth quarter and financial year 2008 numbers. It has posted FY08 net profit of Rs 4659 crore as against Rs 3856 crore in FY07 and net sales at Rs 16692 crore versus Rs 13893 crore.
Its FY08 EPS stood at Rs 81.56 as against its guidance of Rs 81.07.
For the quarter ended March 2008 (Q4), it has posted net profit of Rs 1,249 crore versus Rs 1,231 crore in previous quarter and revenue at Rs 4,542 crore versus Rs 4,271 crore.
Operating margin stood at 32.54% versus 32.60% while projection was at 32.8%. Other income was at Rs 139 crore and tax provision reported at Rs 211 crore. BFSI contributed 33.9% to Q4 revenues as against 36.8% in Q3.
The company says they have added one USD 300 million client in Q4 and in total, added 40 clients during the quarter. Net addition of employees stood at 2,596.
Guidance
FY09 revenues seen at Rs 19894-20214 crore
FY09 EPS at Rs 92.30-93.90
Q1 revenues seen at Rs 4570-4582 crore
Q1 EPS seen at Rs 20.73 Vs Rs 21.83 in Q4 (De-growth Of 5%)
Its FY08 EPS stood at Rs 81.56 as against its guidance of Rs 81.07.
For the quarter ended March 2008 (Q4), it has posted net profit of Rs 1,249 crore versus Rs 1,231 crore in previous quarter and revenue at Rs 4,542 crore versus Rs 4,271 crore.
Operating margin stood at 32.54% versus 32.60% while projection was at 32.8%. Other income was at Rs 139 crore and tax provision reported at Rs 211 crore. BFSI contributed 33.9% to Q4 revenues as against 36.8% in Q3.
The company says they have added one USD 300 million client in Q4 and in total, added 40 clients during the quarter. Net addition of employees stood at 2,596.
Guidance
FY09 revenues seen at Rs 19894-20214 crore
FY09 EPS at Rs 92.30-93.90
Q1 revenues seen at Rs 4570-4582 crore
Q1 EPS seen at Rs 20.73 Vs Rs 21.83 in Q4 (De-growth Of 5%)
Monday 31 March 2008
Stock Picks For My Long Term Portfolio.
1)Unitech
2)DLF
3)Larsen and Tourbo
4)GMR Infrastructure
5)ICICI Bank
6)State Bank Of India
7)IDFC
8)HDFC Bank
9)Jindal Saw
10)Praj Industries
11)Punj Loyd
12)Suzlon Energy
13)Reliance Industries
14)Reliance Petro
15)Reliance Communications
2)DLF
3)Larsen and Tourbo
4)GMR Infrastructure
5)ICICI Bank
6)State Bank Of India
7)IDFC
8)HDFC Bank
9)Jindal Saw
10)Praj Industries
11)Punj Loyd
12)Suzlon Energy
13)Reliance Industries
14)Reliance Petro
15)Reliance Communications
Tuesday 25 March 2008
Sensex clocks 2nd highest point gain; up over 6%
It was a day of absolute strength for the markets as they closed near the high point of the day breaching some important psychological levels. Sensex has breached 16,000 mark while the Nifty closed above 4850 levels. Both Sensex and Nifty up 6% each. It was the second biggest single day point gain for Sensex. Heavy buying was seen in scrips across sectors.
The broader markets are also following the suit and the midcap index closed with a bump up of 6%.
All the BSE sector indices closed in green; IT, realty, bank stocks were among the top gainers of the day.
The cues from global peers were encouraging as most of the Asian markets ended in green as US market picked up another triple-digit gain yesterday with the Dow gaining 187 points.
JP Associates, Reliance Energy, DLF, Unitech, ICICI Bank, Tata Power, TCS Infosys, Satyam, Reliance Communication, Tata Steel, SAIL, were among the gainers.HCL Tech, HDFC Bank, BHEL, ABB, L&T, Hindalco also ended higher.
Sensex closed up 928.09 points or 6.07% at 16217.49, and the Nifty up 267.65 points or 5.81% at 4877.50.
About 2180 shares have advanced, 818 shares declined, and 62 shares are unchanged.
The broader markets are also following the suit and the midcap index closed with a bump up of 6%.
All the BSE sector indices closed in green; IT, realty, bank stocks were among the top gainers of the day.
The cues from global peers were encouraging as most of the Asian markets ended in green as US market picked up another triple-digit gain yesterday with the Dow gaining 187 points.
JP Associates, Reliance Energy, DLF, Unitech, ICICI Bank, Tata Power, TCS Infosys, Satyam, Reliance Communication, Tata Steel, SAIL, were among the gainers.HCL Tech, HDFC Bank, BHEL, ABB, L&T, Hindalco also ended higher.
Sensex closed up 928.09 points or 6.07% at 16217.49, and the Nifty up 267.65 points or 5.81% at 4877.50.
About 2180 shares have advanced, 818 shares declined, and 62 shares are unchanged.
Saturday 8 March 2008
Seven Ways To Survive a Stock Market Correction!
Here are seven simple ways to survive a stock market correction as an investor:
1. Stop Listening To Analysts
Most analysts in the media instead of providing you with a solution will just confuse you. Somebody will say everything is doomed while others will say things are great in the long term. Forget listening to analysts- most of them would not be of any help. The reason people listen to analysts is because they are looking for peace and hope. Trust me you will get none of that by listening to somebody else. Peace and hope are all within you
.2. Stop Staring At Your Portfolio Every Thirty Minutes
Another mistake people make is that they get up every morning and wait for the markets to open. Once markets open they start staring at their stock prices. A fall makes you feel worse and small rise makes you feel a little better. This would not help either. Instead keep track of the fundamentals of your company every time the results are out. If your company is profitable and growing - be happy. If it is not, find out if you need to exit. The stock price will catch up in the near future if business is growing. Do you stare at your money kept in a bank FD everyday? Most probably not. Use the same principle when you invest in stocks or mutual funds.
3. Be Patient
Many of you might not have a lot of cash to buy cheap now; however please be patient with whatever you have bought. Even the youngest billionaire on Earth today is 23 years old. It took him 23 years to be a billionaire and he did not do it in few days or weeks. The youngest billionaire probably in history is 23-year-old Mark Zuckerberg - the founder of the social networking site-Facebook.
4. Speak To Actual Investors
With ExperienceInstead of interacting with analysts or your broker, speak with people who are actual investors and who have been in the market for longer periods of time than you. They will tell you how they have survived various stock market corrections and what has made them richer. Read and learn more about people who have actually created wealth and sustained it over a long period of time.5. Stop Following Crazy TipsPlease for heavens sake stop following â hot tips which promise to make you a millionaire in a matter of months. Maybe the hot tip is only meant for billionaires who would end up as millionaires in case they do follow the tip. If it seems to good to be true, it is probably just a scam, which hopes to take money away from retail investors and put them in the hands of greedy manipulators. Similarly stop following rumours about how fundamentally strong companies are going to be shut down and go bankrupt in the next few months. Use your own head and trust yourself. 6. Understand Market Cycles
Every asset class has a cycle. Stock markets, mutual funds, real estate all move in cycles. Please realize that nothing can keep going up forever in a single direction. There will be phases when prices will come down and again move up. If you go back into history you will see several instances when stock prices came down, however over a period of time quality companies always reward investors. Understand market cycles, and dont become a slave to them.
7. Follow The GuruToday the richest man on earth, Warren Buffett, is an investor who has created wealth because he has stayed away from what everybody else is doing and has simply invested in quality companies for the long term. He invested in Gillette, for the simple reason that he believed that men wont stop shaving. It makes sense to follow, as I call him, â The Guru and think long term and remember people who create wealth do things that others dont.I âm sure if you follow the simple techniques above you will be a much happier and a calmer investor. Investing is about controlling your emotions and being disciplined about what you do.
Happy Wealth Creation!
jestin xavier
1. Stop Listening To Analysts
Most analysts in the media instead of providing you with a solution will just confuse you. Somebody will say everything is doomed while others will say things are great in the long term. Forget listening to analysts- most of them would not be of any help. The reason people listen to analysts is because they are looking for peace and hope. Trust me you will get none of that by listening to somebody else. Peace and hope are all within you
.2. Stop Staring At Your Portfolio Every Thirty Minutes
Another mistake people make is that they get up every morning and wait for the markets to open. Once markets open they start staring at their stock prices. A fall makes you feel worse and small rise makes you feel a little better. This would not help either. Instead keep track of the fundamentals of your company every time the results are out. If your company is profitable and growing - be happy. If it is not, find out if you need to exit. The stock price will catch up in the near future if business is growing. Do you stare at your money kept in a bank FD everyday? Most probably not. Use the same principle when you invest in stocks or mutual funds.
3. Be Patient
Many of you might not have a lot of cash to buy cheap now; however please be patient with whatever you have bought. Even the youngest billionaire on Earth today is 23 years old. It took him 23 years to be a billionaire and he did not do it in few days or weeks. The youngest billionaire probably in history is 23-year-old Mark Zuckerberg - the founder of the social networking site-Facebook.
4. Speak To Actual Investors
With ExperienceInstead of interacting with analysts or your broker, speak with people who are actual investors and who have been in the market for longer periods of time than you. They will tell you how they have survived various stock market corrections and what has made them richer. Read and learn more about people who have actually created wealth and sustained it over a long period of time.5. Stop Following Crazy TipsPlease for heavens sake stop following â hot tips which promise to make you a millionaire in a matter of months. Maybe the hot tip is only meant for billionaires who would end up as millionaires in case they do follow the tip. If it seems to good to be true, it is probably just a scam, which hopes to take money away from retail investors and put them in the hands of greedy manipulators. Similarly stop following rumours about how fundamentally strong companies are going to be shut down and go bankrupt in the next few months. Use your own head and trust yourself. 6. Understand Market Cycles
Every asset class has a cycle. Stock markets, mutual funds, real estate all move in cycles. Please realize that nothing can keep going up forever in a single direction. There will be phases when prices will come down and again move up. If you go back into history you will see several instances when stock prices came down, however over a period of time quality companies always reward investors. Understand market cycles, and dont become a slave to them.
7. Follow The GuruToday the richest man on earth, Warren Buffett, is an investor who has created wealth because he has stayed away from what everybody else is doing and has simply invested in quality companies for the long term. He invested in Gillette, for the simple reason that he believed that men wont stop shaving. It makes sense to follow, as I call him, â The Guru and think long term and remember people who create wealth do things that others dont.I âm sure if you follow the simple techniques above you will be a much happier and a calmer investor. Investing is about controlling your emotions and being disciplined about what you do.
Happy Wealth Creation!
jestin xavier
Friday 7 March 2008
give me feedback and share your ideas
Feel free to give me feedback and share your ideas about what you think about my writing and what else you would like to read here in the comments section.
Mkts end with hefty losses; Sensex below 16,000
Sensex closed down 566.56 points or 3.42% at 15975.52, and the Nifty down 149.80 points or 3.04% at 4771.60.
Monday 3 March 2008
Mkt sees second biggest fall ever; Sensex slips over 5%
It was extremely weak day for the markets wherein the Sensex and Nifty opened with huge gap down on the back of weak cues from the global markets. All the key indices traded in deep red through the day barring pharma and auto index which were holding up in green till mid trading session but slipped in late trade.
Banking, realty, power, capital goods, metal and IT stocks were the worst hit counters today. Broader markets also were weak in line with the frontline counters giving abysmal breadth to the markets. On the volume front, the markets disappointed once again.
Sensex ended down 900.84 points or 5.12% at 16677.88, and the Nifty closed down 270.50 points or 5.18% at 4953. About 524 shares have advanced, 2466 shares declined, and 55 shares are unchanged.
Banking, realty, power, capital goods, metal and IT stocks were the worst hit counters today. Broader markets also were weak in line with the frontline counters giving abysmal breadth to the markets. On the volume front, the markets disappointed once again.
Sensex ended down 900.84 points or 5.12% at 16677.88, and the Nifty closed down 270.50 points or 5.18% at 4953. About 524 shares have advanced, 2466 shares declined, and 55 shares are unchanged.
Sunday 2 March 2008
budget 08
The Finance Minister has spoken and the market has given its verdict. At least without reading the fineprint, the market was down 350 points. Some obvious disappointments were short-term capital gains tax going up and of course the large debt waiver from public sector banks to the tune of Rs 60,000 crore.
There have been some reliefs as well and some positive steps like excise cuts for many sectors like auto, FMCG, pharmaceuticals and there has been personal consumption increase that is expected after the tax cuts.
There have been some reliefs as well and some positive steps like excise cuts for many sectors like auto, FMCG, pharmaceuticals and there has been personal consumption increase that is expected after the tax cuts.
Tuesday 26 February 2008
Use every dip to buy for investment.
I feels the markets could move up from here as there are quite a few expectations from the main budget after the popular Railway budget.Possibly about 400-500 points up form here in the next two days. Investors should buy midcaps only if they have a long term view on the stocks. Otherwise,I think there are enough largecap stocks which are available at very decent discounts, especially after this correction.
11. Monitor your portfolio
Investing in equity is not a one time affair. Buying shares is perhaps the smallest part of the overall investment activity. It is important to periodically monitor and review your investment portfolio. It is always prudent to sell a stock if you feel that the fundamentals have deteriorated and the stock is overpriced in comparison to its fair value. Money has an opportunity cost and by selling an overvalued stock you can investment the same money elsewhere, for better capital appreciation opportunities.
Monday 25 February 2008
10.Invest regularly and gradually build up your position
Just as you put money into fixed interest bearing investments regularly, also invest in equities on a periodic basis. Further, do not invest at one go. Rather, buy on a regular basis and in small lots. This will help you to buy stocks at a reasonable price.
sensex ended up
Sensex ended up 301.50 points or 1.74% at 17650.57, and the Nifty closed up 89.95 points or 1.76% at 5200.70. About 1211 shares have advanced, 1737 shares declined, and 87 shares are unchanged. BSE midcap ended flat at 7594.41 and smallcap was down 0.72% at 9526.28.
Friday 22 February 2008
9. Do not marry a stock
If you feel your investment decision has gone wrong, exit the counter; don’t try to average. It is prudent to cut losses, rather than lower the average purchase price. Particularly in cases where the stock is witnessing a continuous sell-off, it is better to offload your position and book losses. You can use the same money to invest in other opportunities.
Mkts end in red: Bank, IT, auto stocks down
The markets closed in red with a sharp cut tracking its Asian peers. Selling pressure was seen in scrips across sectors. IT, oil & gas, power, auto stocks are top losers. The BSE midcap and smallcap indices also closed lower giving market an extremely negative breadth. Sensex closed down naerly 400 points.
On a weekly basis both the Sensex and Nifty wre down nearly 4%.
Sensex closed down 368.46 points or 2.08% at 17366.22, and the Nifty down 78.25 points or 1.51% at 5113.55.
About 1040 shares have advanced, 1895 shares declined, and 97 shares are unchanged.
The BSE Midcap Index ended at 7,594.45 down 1%.
The BSE Smallcap Index ended at 9,595.41 down 1%.
On a weekly basis both the Sensex and Nifty wre down nearly 4%.
Sensex closed down 368.46 points or 2.08% at 17366.22, and the Nifty down 78.25 points or 1.51% at 5113.55.
About 1040 shares have advanced, 1895 shares declined, and 97 shares are unchanged.
The BSE Midcap Index ended at 7,594.45 down 1%.
The BSE Smallcap Index ended at 9,595.41 down 1%.
Wednesday 20 February 2008
8.Do not borrow money to invest in equities
It is true that equities tend to outperform other investment avenues in the long run. However, there is no guarantee that you will make money on your stocks either in terms of dividends or capital gains, if your sale of shares is time-bound. Therefore, if you borrow funds to invest in equities, it might be difficult for you to repay the interest or principal on the loan, on time. What really matters in equity investment is your withholding power. So, invest your surplus money in equities and only invest an amount that you will not need in the immediate future. If you borrow and invest, your withholding power to stay invested for the long term could be limited.
Sunday 17 February 2008
7.Don't sell in panic
Markets go through cycles of boom and bust and volatility is a way of life in equities. Do not sell your holdings in a hurry and panic just because your stocks have witnessed a sudden correction. Always focus on company fundamentals; if they are intact, there’s nothing to worry about.
Wednesday 13 February 2008
6. Buy shares of companies whose business you understand
In the long run, the stock market rewards companies with strong fundamentals and good financial performance. Therefore, it is essential for you to invest in companies whose industry dynamics and business models you understand. This will help you to gauge whether a transformation in an industry is positive or negative, at an early stage itself, and its likely impact on the company’s fundamentals. Your understanding of industry dynamics would help you to evaluate industry trends.
Monday 11 February 2008
5.Do not buy on tips or rumors focus on fundamentals
Tips and rumors are an integral part of the stock market. Always remember that these could be engineered by a group of traders or punters. Therefore, a sharp rally based on rumors could fizzle out in a short time. You should strictly stay away from rumors, suggestions or tips received from your broker or friends or the investor circle. Investments based on tips could lead to huge losses. Rather, you would be better off investing based on industry and company fundamentals. Furthermore, generally such tips pertain to small and mid cap stocks, where liquidity is extremely limited. If you invest in such stocks, you could get trapped in an illiquid investment for a very long time.
5.Do not buy on tips or rumors rather focus on fundamentals
Tips and rumors are an integral part of the stock market. Always remember that these could be engineered by a group of traders or punters. Therefore, a sharp rally based on rumors could fizzle out in a short time. You should strictly stay away from rumors, suggestions or tips received from your broker or friends or the investor circle. Investments based on tips could lead to huge losses. Rather, you would be better off investing based on industry and company fundamentals. Furthermore, generally such tips pertain to small and mid cap stocks, where liquidity is extremely limited. If you invest in such stocks, you could get trapped in an illiquid investment for a very long time.
Saturday 9 February 2008
4.Portfolio diversification
Diversion is a very old and popular investment strategy, applied to reduce portfolio risk. Actually, before you start investing in equities, you should consider various factors like your age, monetary requirements, etc, to determine how much risk you can take on. For instance, if you are around 30 years old, you can invest a greater portion of your portfolio in equities than a retired person. Once you have determined how much risk you can take on and how much you can invest regularly in equities, try to achieve diversification in your portfolio. To reduce risk, diversify within equities by investing across sectors. Do not invest in one or two sectors or any negative development pertaining to those sectors could severely impact the profitability of your portfolio. Secondly, ensure a good blend of small, mid and large-cap stocks in your portfolio. While large cap stocks would lend stability to your portfolio, small and mid cap stocks would give you an above average appreciation. Basically, growth potentials are higher in the case of small and mid cap stocks. Thus, just having large cap stocks could be safe but also mean that returns are just about at the same level as market returns. Thirdly, invest across value and growth stocks. Growth stocks are risky but also offer higher returns while value stocks are likely to be less volatile. In brief, when you spread your investments over a larger number of stocks and sectors, if a few stocks/sectors under-perform, this is compensated by other stocks/sectors which perform well.
Friday 8 February 2008
Markets end weak
It was extremely volatile and weak day for the markets wherein the Sensex and Nifty both traded flat across yesterday's closing level and finally settled down on weak note.
Sensex ended down 62.04 points or 0.35% at 17464.89, and the Nifty closed down 12.90 points or 0.25% at 5120.35. On BSE, about 590 shares advanced, 2369 shares declined, and 52 shares were unchanged.
Sensex ended down 62.04 points or 0.35% at 17464.89, and the Nifty closed down 12.90 points or 0.25% at 5120.35. On BSE, about 590 shares advanced, 2369 shares declined, and 52 shares were unchanged.
3.Pay the right price
It is essential to buy at the ‘right price’, that is, the price that you are comfortable paying. Do not buy because others are doing so. This will help you to hold the stock for a longer duration. Conversely, when you have to decide when to sell, if you feel that the market is overheated and prices have reached unrealistic levels, exit; Don’t stick on hoping for a little more. It helps to limit your own greed.
Tuesday 5 February 2008
2. Invest time and efforts in doing your homework
Investing in equities is not a one time affair. You need to invest a lot of time and efforts, apart from money, to understand industries, economic trends and so on. Further, you should dedicate time to analyse companies, as this will help you to avoid costly mistakes. You need to develop the habit of reading first hand information - such as company annual reports, company announcements and so on. Annual reports of large companies are easily available on the web. Reading business dailies is also a must for equity investors. Get your basic concepts and fundamentals right. Revisiting financial fundamentals periodically would be a good idea. You need to understand basic concepts like the Price-Earning ratio (P/E ratio), operating margins, earnings per share, etc. Analysing balance sheets and profit and loss accounts is a must. A short term course on ratio analysis would be of immense help. Further, understand technicalities of investment, like how the stock market operates, how to buy or sell, settlement procedures, etc. Also focus on domestic economic and policy development. These factors are also of immense importance as they lead to structural changes in the economy that would benefit certain industries. For instance, the boom in the telecom sector in the domestic market is driven by government policy initiatives over the years. Lastly, you also need to keep yourself abreast with key global developments. With liberalisation and subsequent integration of economies, global factors also impact domestic industries and the stock market. The stock market is said to be all about sentiments. However, in this mad rush you need to stay focused and maintain a lot of discipline in executing your investment strategy. Thus, irrespective of which way the market moves, you need to stick to your investment strategy without getting swayed by market sentiments. In short, discipline in your investment approach will protect you from the herd mentality. Most investors are tempted to buy when everyone is on a buying binge and sell when the market is moving southwards. But if you have decided as a rule to buy a particular stock only when the overall market corrects by one per cent, this rule could kill your temptation to jump on the stock when the market is overheated.
Monday 4 February 2008
1. Be a long term investor
This is the first and most important rule of equity investment. Timing the market - entering the market at low levels and exiting at higher levels - is almost impossible. Though often heard on the street, this strategy is difficult to implement, as it is nearly impossible to gauge when the market has peaked and when it has bottomed out. Do not play the guessing game; it is more sensible to put money into the market with a long term commitment. Trading or speculating seldom helps in equities. You could make quick bucks by trading in 10 deals, but you could lose whatever you have earned in just one deal. This is the risk you take when you try to trade and make easy money from the stock market. Apart from incurring financial losses, it also involves a lot of mental stress. Trading could give you sleepless nights. Globally, economies follow seven year business cycles of boom and bust. Thus, when you are investing, invest for a fairly long term, say three to seven years. Indeed, it is a proven fact that over the long haul, equities tend to outperform all other asset classes.
Market end strong but off day's high
The markets opened with impressive gap up today on the back of good amount buying seen in the realty, IT, capital goods and metal space coupled with favourable cues from the global markets. Sensex and Nifty traded extremely strong in the first half of trade but could not maintain its gains and gave up gains on account of some profit booking seen in the FMCG, metals and pharma stocks at higher levels and finally shut shop with significant gains.
BSE smallcaps and midcaps were also very strong in todays trade and the market breadth was also positive with advance decline ratio of 6:1. Volume was relatively muted today.
BSE smallcaps and midcaps were also very strong in todays trade and the market breadth was also positive with advance decline ratio of 6:1. Volume was relatively muted today.
Sunday 3 February 2008
How to receive income from shares?
The income received from shares is called a dividend. We invest in shares to make money – either through a share’s capital growth, i.e. the amount by which the share price increases in value over time, or through the dividends it pays to its shareholders. Dividends are payments made by companies to shareholders from their profits. Not all companies pay dividends. Dividends are usually paid twice a year and are in effect the yield from your investment. Some growth companies plough most of their profits back into generating more business rather than paying out dividends to investors.
What is a demat account?
Investors who wish to trade in the market need to have a dematerialized, or demat, account. In India, the government has mandated two entities –National Securities Depository, or NSDL, and Central Depository Services (India), or CDSL – to be the custodian of dematerialized securities.
Saturday 2 February 2008
Who is a broker?
A stockbroker is person who is licensed to trade in shares. Brokers also have direct access to the sharemarket and can act as your agent in share transactions. For this service they charge a fee. They can also offer additional services like advice on shares, debentures, government bonds and listed property trusts and non-listed investment options (cash management trusts, property and equity trusts.
Pick large cap stock first
Midcaps have been beaten down so much that you will see some bounce back. But any market which has seen a crash, the first stocks to be bought are the large caps. The mid caps will take much longer to get back on track.
2 What is a stock exchange?
A stock exchange, share market or bourse is a corporation or mutual organization which provides facilities for stock brokers and traders, to trade company stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock exchange include: shares issued by companies, unit trusts and other pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it has to be listed there. The Bombay Stock Exchange Limited, or BSE has a nation-wide reach with a presence in 417 cities and towns of India. Its index, or market indicator is known as the Sensex. It gives a general idea regarding the movement of the stocks; whether they have gone up or have gone down. If the Sensex goes up, it means that the prices of the stocks of most of the major companies on the BSE have gone up.
Friday 1 February 2008
What are shares?
A share is one of a finite number of equal portions in the capital of a company, entitling the owner to a proportion of distributed, non-reinvested profits known as dividends and to a portion of the value of the company in case of liquidation. Equity is a share in the ownership of a company. It represents a claim on the company’s assets and earnings. As you acquire more stock, your ownership stake in the company increases. The terms share, equity and stock mean the same thing and can be used interchangeably.
markets smart recovery
It was a strong day for the markets after few consecutive weak sessions. The markets witnessed smart recovery in the second half of trade after lacklusture performance in early trade on the back of heavy buying in the scrips across sectors led by IT, metal, auto and oil & gas.
The rally was mainly dominated by the large caps as the midcaps and smallcaps are still finding difficult to attract investors attention. Capital good, banking, power and realty counters remained subdued for most part of the day. Market breadth was negative however very thin and the volume was also truncated on the first day of February expiry.
The rally was mainly dominated by the large caps as the midcaps and smallcaps are still finding difficult to attract investors attention. Capital good, banking, power and realty counters remained subdued for most part of the day. Market breadth was negative however very thin and the volume was also truncated on the first day of February expiry.
Kaun Banega Crorepati(Power of compounding)
If you are a investor,you must know about magic of compounding
In case you earn Rs20,000 per month, do you know how many years it will take for you to become a Crorepati? Not 10 or 20, but 50 years!" exclaims Amitabh Bachchan, the anchor for "Kaun Banega Crorepati".Mr Bachchan, did you know that if you invest just Rs9,250 once and earn 15% per annum on this investment then, in 50 years you will be a 'Crorepati' too! And in case you invest Rs20,000 every month for 50 years under similar terms, you will be worth more than (hold your breath) Rs173cr! That is Crorepati 173 times over!!!
Welcome to the 'Power of Compounding'
One of the basic premises of investing is that your money multiplies manifold over time. And this multiplication of money is normally referred to as the "Power of Compounding".So, how does money compound?When you invest money, it earns interest (or returns, if you may). If you keep the interest invested, then it does not sit idle while only the original investment sweats it out. The interest earns interest too! And then the interest on interest earns interest again!That is the beauty of compounding. That is what made great men like Albert Einstein and Benjamin Franklin extol the virtues of 'compounding'.
What does the 'Power of Compounding' mean to an investor?
Ms Thrifty, Mr Realist and Ms Follower went to the same school and the same class.On her 10th birthday, Ms Thrifty's father gave her Rs100. She wisely invested the money that earned her an interest of 15% every year. Mr Realist won Rs200 as prize money when he was 16 years old. His friend, Ms Thrifty, advised him to invest his prize similarly. When Ms Follower earned her first salary at the age of 21, she salted away Rs400 in the same investment.After reaching the age of 60, all three decide to withdraw their investments. Who do you think realised the most from his/her investment?You think it's Ms Follower, right? After all, she invested four times the money that Ms Thrifty had invested. So what if she invested the money 10 years later. She did earn interest for 40 years anyway after that.But think again. Ms Thrifty makes the most out of her investment! In fact, her Rs100 is worth Rs1,08,366. On the other hand, Ms Follower's Rs400 is worth Rs93,169!
It simply means that the LONGER you stay invested the MORE you make.
Now you know why Ms Thrifty made more money than Mr Realist and Ms Follower.Let us try another small exercise.Let us assume Ms Thrifty, Mr Realist and Ms Follower invest Rs100 for 10 years. However, all three of them earn interest at different rates. Ms Thrifty earns 20% while Mr Realist earns 15% and Ms Follower manages a 10% interest rate.Can you work out what each one of them will have ten years hence?Ms Thrifty will have Rs619 while Mr Realist, Rs405. Ms Follower will have the least - Rs259 in ten years. Did you notice something though? While the interest rates differ by just 5%, in 10 years the worth of the original capital, Rs100 was vastly different!
That is another way of understanding the 'Power of Compounding' or the power to grow exponentially.
Now that we have understood the magic of compounding, it is time to take a look at an interesting rule associated with 'compounding' - the Rule of 72.The 'Rule of 72' is an easy way to find out in how many years your money will double at a given interest rate. Lost?Suppose the interest rate is 15%, then your money will double in 72/15= 4.8 years. In case, the interest rate is 20%, then the money will double in 3.6 years.Interesting rule indeed!
Moral of the story: The longer you stay invested the more you make!
In case you earn Rs20,000 per month, do you know how many years it will take for you to become a Crorepati? Not 10 or 20, but 50 years!" exclaims Amitabh Bachchan, the anchor for "Kaun Banega Crorepati".Mr Bachchan, did you know that if you invest just Rs9,250 once and earn 15% per annum on this investment then, in 50 years you will be a 'Crorepati' too! And in case you invest Rs20,000 every month for 50 years under similar terms, you will be worth more than (hold your breath) Rs173cr! That is Crorepati 173 times over!!!
Welcome to the 'Power of Compounding'
One of the basic premises of investing is that your money multiplies manifold over time. And this multiplication of money is normally referred to as the "Power of Compounding".So, how does money compound?When you invest money, it earns interest (or returns, if you may). If you keep the interest invested, then it does not sit idle while only the original investment sweats it out. The interest earns interest too! And then the interest on interest earns interest again!That is the beauty of compounding. That is what made great men like Albert Einstein and Benjamin Franklin extol the virtues of 'compounding'.
What does the 'Power of Compounding' mean to an investor?
Ms Thrifty, Mr Realist and Ms Follower went to the same school and the same class.On her 10th birthday, Ms Thrifty's father gave her Rs100. She wisely invested the money that earned her an interest of 15% every year. Mr Realist won Rs200 as prize money when he was 16 years old. His friend, Ms Thrifty, advised him to invest his prize similarly. When Ms Follower earned her first salary at the age of 21, she salted away Rs400 in the same investment.After reaching the age of 60, all three decide to withdraw their investments. Who do you think realised the most from his/her investment?You think it's Ms Follower, right? After all, she invested four times the money that Ms Thrifty had invested. So what if she invested the money 10 years later. She did earn interest for 40 years anyway after that.But think again. Ms Thrifty makes the most out of her investment! In fact, her Rs100 is worth Rs1,08,366. On the other hand, Ms Follower's Rs400 is worth Rs93,169!
It simply means that the LONGER you stay invested the MORE you make.
Now you know why Ms Thrifty made more money than Mr Realist and Ms Follower.Let us try another small exercise.Let us assume Ms Thrifty, Mr Realist and Ms Follower invest Rs100 for 10 years. However, all three of them earn interest at different rates. Ms Thrifty earns 20% while Mr Realist earns 15% and Ms Follower manages a 10% interest rate.Can you work out what each one of them will have ten years hence?Ms Thrifty will have Rs619 while Mr Realist, Rs405. Ms Follower will have the least - Rs259 in ten years. Did you notice something though? While the interest rates differ by just 5%, in 10 years the worth of the original capital, Rs100 was vastly different!
That is another way of understanding the 'Power of Compounding' or the power to grow exponentially.
Now that we have understood the magic of compounding, it is time to take a look at an interesting rule associated with 'compounding' - the Rule of 72.The 'Rule of 72' is an easy way to find out in how many years your money will double at a given interest rate. Lost?Suppose the interest rate is 15%, then your money will double in 72/15= 4.8 years. In case, the interest rate is 20%, then the money will double in 3.6 years.Interesting rule indeed!
Moral of the story: The longer you stay invested the more you make!
Thursday 31 January 2008
while investing stay focused on future goals.
While driving a car, one needs to see in front. If a driver only looks in the rear-view mirror, then he is bound to have an accident. This is true of investing too. Do not invest by just looking at the past performance of an asset class. It is often observed that an individual, who is reluctant to invest at 3250, shows extreme eagerness to invest when index touches 14000 and falls to the 11000 level.
At 11000, he recalls the last level of 14000 and finds the current level attractive. He forgets that at 3250 he did not see value in investing. While investing, stay focused on future goals.
These investors panic if markets fall by 15-20%. This is because their investment strategy was not based on their financial goals but it was based on “...what others are doing.” Secondly, they were reacting on past information.
The past can be a guiding post but can never be a driver of future growth.
Stock markets have cycles. Everything that goes up has to come down. Even the current rally will come to an end sometime. If you have stayed focused on your financial goals, you need not panic or go overboard with greed.
At 11000, he recalls the last level of 14000 and finds the current level attractive. He forgets that at 3250 he did not see value in investing. While investing, stay focused on future goals.
These investors panic if markets fall by 15-20%. This is because their investment strategy was not based on their financial goals but it was based on “...what others are doing.” Secondly, they were reacting on past information.
The past can be a guiding post but can never be a driver of future growth.
Stock markets have cycles. Everything that goes up has to come down. Even the current rally will come to an end sometime. If you have stayed focused on your financial goals, you need not panic or go overboard with greed.
Wednesday 30 January 2008
todays market
It was yet another weak and disappointing day for the markets which opened on weak and inconclusive note and traded under pressure through the day and finally ended with a deep cut. Oil & gas, realty, power and auto scrips were the worst hit counters however all the BSE indices ended in red.
Midcaps and smallcaps are still finding difficult to attract investors attention and both the indices closed with over 2% decline. Market breadth was negative through out the day and the volume was also not very impressive.
Midcaps and smallcaps are still finding difficult to attract investors attention and both the indices closed with over 2% decline. Market breadth was negative through out the day and the volume was also not very impressive.
DLF'S Q3 RESULT
DLF Q3 net profit up 6.3% at Rs 2145 cr
DLF has announced its third quarter numbers. It has posted consolidated third quarter net profit of Rs 2145 crore versus Rs 2018.6 crore, a growth of 6.3% and net sales of Rs 3,598.4 crore versus Rs 3,249.9 crore, up 10.7% (QoQ).
Operating profit margin stood at 69.5% versus 69.7%. EPS was at Rs 12.58.Other income declined at Rs 52.8 crore from Rs 99.3 crore. This is a best picks for long term investment.
DLF has announced its third quarter numbers. It has posted consolidated third quarter net profit of Rs 2145 crore versus Rs 2018.6 crore, a growth of 6.3% and net sales of Rs 3,598.4 crore versus Rs 3,249.9 crore, up 10.7% (QoQ).
Operating profit margin stood at 69.5% versus 69.7%. EPS was at Rs 12.58.Other income declined at Rs 52.8 crore from Rs 99.3 crore. This is a best picks for long term investment.
Tuesday 29 January 2008
Learn fundamentals
Trading and Investing essentially involves some amount of risk, hence the number of people who are getting involved in this risky affair is less when compared to the rate at which markets in India are growing. People therefore hesitate to take the first step towards investments, fearing the results. This uncertainty is due to lack of information and understanding of investment basics. Observing the on-going market trends and learning the fundamentals of investment will definitely enable one to be a successful investor.
Learn fundamentals
Trading and Investing essentially involves some amount of risk, hence the number of people who are getting involved in this risky affair is less when compared to the rate at which markets in India are growing. People therefore hesitate to take the first step towards investments, fearing the results. This uncertainty is due to lack of information and understanding of investment basics. Observing the on-going market trends and learning the fundamentals of investment will definitely enable one to be a successful investor.
sensex and nifty
Markets settled flat after a highly volatile session, as positive global cues battled against sharp losses owing to weakened sentiment after the RBI kept rates steady.
The Nifty closed seven points higher at 5,280 while the Sensex shed 61 points to close at 18,091.
The Nifty closed seven points higher at 5,280 while the Sensex shed 61 points to close at 18,091.
Monday 28 January 2008
About me
I am working with one of the largest TV media network in Delhi, India.I like to share Stock Markets Technical and Fundamental informations. email:jestinxa@gmail.com
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