Monday, 22 June 2015

Investing strategy for traders and short term traders ... open for discussion !!!

In last post we discussed about "Investing in Penny stocks" today lets discuss about a investing strategy for traders and short term traders.

Its been a decade I have been tracking Indian market regularly. Have totally avoided speculations. I have seen strong bull market and strong bear market as well. One thing common is when this happens, people just utter whatever they get to their mind. This is nothing but speculation. If you track daily you can easily say which news is speculated.


Many technical analysts and fundamental analysts start giving their own free opinion even if you don't ask them.

Say if NIFTY goes down for few days, first few stock brokers start downgrading few stocks which they have strongly recommended few days back. Many recommend to buy cyclicals, few recommend to buy blue chips,. Few say stay away and keep watching for an opportunity. Few say sell and few hold.

Whom to listen  ? Which stock to buy or sell ?

Greatest investors like Warren Buffet stayed away for market news and avoided speculations. So why can't we apply the same.

Don't take me wrong here, I am not saying to totally avoid market news. I am pointing not to give more importance to speculations. Dont expect to make money from it.

From past two years, Indian market is inching slowly up. Many developments are happening and we are going in right path towards rapid development. This will surely give good returns for those who smartly invest in stock market.

My strategy is to stay invested for long term. But after watching market from past one year, I have seen many opportunities where I would have made good amount of money by following a simple strategy. I call this win-win strategy.

Instead of listening to people in the stock market. I instrumented my own strategy.

I have noted down few steps which I followed in a demo account from past one year. I would like to list down them for those who are interested and open for discussion.

If I am trader or short term investor, I would like to prefer following below steps.

  • Will opt for prepaid brokerage plan which reduces by brokerage fee for every transaction I make. The more you prepay, the less your brokerage will be. For ex, icicidirect offers couple of plans under this scheme.
  • First buy blue chip stocks with less debt and strong Balance sheet. 
  • After a month, when market goes up, will sell stocks which are in positive.I will not sell all the stocks, in each share, I will leave the capital as it is and sell profit worth shares.
  • Wait patiently wait till market goes down, believe me it will surely go down for couple of days.  Meanwhile, do research, get list of good performing stocks , stocks with less debt, stocks with strong balance sheet. 
  • Read annual reports of each stock and understand them. If you don't understand them try to atleast read from top to bottom. Filter out few stocks.
  • Once market goes down, invest the profit back into above stocks or any new stocks which is filtered in your analysis.
  • Repeat this again and again. 
  • Keep tap on your brokerages, look around for banks which provide less brokerages than your current broker.
This worked well in a demo account. I need to try with real money and see. Before that, I would like to ask you guys help to test this strategy and shed some comments and suggestions.

PLEASE REMEMBER NOT TO INVEST ANY REAL MONEY IN ABOVE STRATEGY. IT MAY FAIL. THIS IS JUST A STRATEGY WHICH IS DERIVED FROM MY EXPERIENCE. 

We can add few more points and make it work. What do you say ?


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Sunday, 14 June 2015

Is it worth investing in penny stocks for short term or invest in bluechip stock for long term.

As many of you have observed that India Stock Market is very volatile from past few weeks. Though many foriegn investors are bullish in long term they are bearish in short term.


I have come across various people who lost their money in Indian Stock Market. I am also one of the guy who had bet on stocks like King fisher Airlines  and lost hopes on it. I am not sure if stock is going to come up soon or it will rest forever.

According to my 10 years of experience in stock market, I strongly believe that buying a penny stock and waiting for it to go slightly up to sell the stock and get some profit by paying hefty brokerage and tax is meaning less. There is no chance of succeding with this method of investing.

We have access to rich resources in youtube and google which clearly explain that people who are successful in stock investing are those who buy good valued stocks (like bluechip stock) and hold on them for long period of time.  This doesn't mean that you need to invest all our money into blue chips. We need to diversify it and only invest money which we are affordable to loose.

If you have investing experience, please do share your experience in comments.
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Monday, 1 June 2015

ABCD's of Stock Market Investing

When you want to buy or sell a stock, you need to do more research. The more research you do, the more you will come to know about their business.

Its always good to list 100 stocks, filter 10 from them , then 3 from them and finally choose 1. It may look insane, but its an effective method to filter. My Virtual Financial Mentor Robert Kiyosaki used to follow this formula when he was in real estate business.  If he wants to buy one property, he used to visit 100 properties, analyse them, compare them , filter them and finally decide one. He said this formula worked like a gem.

Watch his story in this video where he explains about this formula.


Similar in stocks, great Investors like Warren Buffet they don't look at stock price first, they look if the stock is cheap to buy. They look at stock business first, they will know what the company is worth, they go through Annual reports, they go through news, they go through all sorts of documents which gives them clues to add this stock to they buy list.

Many just go with news (which always may not be true), and  try to invest in Stocks and loose money.  They don't even think if the stock price is cheap or costly. They just see the price and invest and expect good returns. Most of the time, they end up with pain. Sometimes, when luck  favours, they reinvest them and finally end up bankrupted. This is a common story which happens to people who want to earn quick money in Stock market.

If you read books on investing, many suggest to choose Mutual funds than stocks if you can't analyse the stock. But there is a catch here, you will end up locking your money in Mutual funds for years. One way its good to invest in Mutual funds than loose money by buying stocks without any analysis.

Books like "How STOCK MARKET WORKS" by Michael Becket will be a good choice to begin if you are new to investing.

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Sunday, 31 May 2015

Virtual Financial Mentors in Life are they real ?

First of all, is there any word like "Virtual Financial Mentor". Try typing in google and check. You many not find the exact meaning.

But I would like to detail about its definition in my life.  At age 23, I got a book "Rich Dad and Poor Dad" as a present from a friend.  After going through couple of pages, it was interesting and started impacting more on my thoughts and way of  my thinking.  After completing it, I was totally into my financial planning.

I had my Grand Father as my Virtual Financial Mentor till age of 23, who taught me about Savings and re-investing money to earn extra income. After going through "Rich Dad and Poor Dad" , author for this book Robert Kiyosaki became my second "Virtual Financial Mentor".

Word "Virtual Financial Mentor" may sound strange but believe it or not, it helps you and guides you to take important choices in your life. It will become a driving force to make you rich when you fully belive in it.

Its very important to have a Financial Mentor in life who guides you in correct direction. But its hard to find one these days.  Hope you agree with me.

So, I developed myself this concept of "Virtual Financial Mentor". I read books by Robert Kiyosaki and follow his every video on Internet. Noted down important points mentioned by him in his videos and books.  Whenever I want to take a decision about my financials, I will check my Robert Kiyosaki notes to  see if I can apply any Robert Kiyosaki rules to make them work.

There are couple of "Virtual Financial Mentors" who changed my life.  I will be writing about them in future posts. Do you have one in your life ? Feel free to mention them in comments column.

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Tuesday, 1 April 2014

RBI keeps key policy rates unchanged

News:
  • RBI keeps key policy rates unchanged.
  • Markets trade volatile with negative bias after strong start
  • Bank Nifty leads the decline
  • Asia markets mixed and Europe higher.
  • March Auto sales: Mixed trends
  • Kotak Mah Bank,HDFC Bank are in red
  • Bank of Baroda,IDFC are in green.
  • IT stocks performed well today
  • Tata Steel,Sesa Sterlite are in green
  • Cairn India,Reliance are in green.
  • HUL,Asian Paints,ITC,BPCL,Maruthi Suzuki.Hindalco are down.
  • Dena Bank,UCO Bank,Natco Pharma,Ashok Leyland,Adani Ent,Siemens India is down.
  • Educomp,Everonn Edu are up.
  • TV18 Broadcast,Network18,PVR are in green.
  • India Cement,SREI Infra is up.
  • SBI,PNB,ICICI Bank,HDFC Bank,HDFC are down because of Hawkish inflation news.
mrtechpathi_rbi_keeps_key_policy_rates_unchanged

Top Stock News:
  • BPCL is down on news
  • Maruthi Suzuki sales down.
  • NATCO Pharma : SC agreed to hear Tevas appeal for sclerosis drug.
  • Eicher Motors : UBS increased the target price higher
  • Mahindra M&M up on sales better
  • Spice Jet : Announces 3 day discount offer from April 1-3 
Fundamentalist views:
  • Sell BPCL Rs.446 : Target 442 SL 451
  • Sell OBC Rs.219 Target 216 SL 221
  • Buy Tech Mah Rs.1821 
  • Buy Wipro Rs.558
  • Buy Dishman Pharma Rs.86.75 Target 92 SL 83
  • Tata Global Bev Rs.153 Rs.160 SL 151
Midcap Stocks:
  • United Phosphors is up on 50% stale stake .
  • Kalpa Taru,KEC are up on good news
  • Educomp is up 10% on US company in talks to acquire stake in the company
  • SunTV is up on 27.5% inflation news
  • IRB Infra Hikes Mumbai to Pune express rate to 18%
  • Tata Comm is down on negative news.
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