Category: General Investing

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General Investing Must Know Facts

ALL YOU NEED TO KNOW ABOUT MARKET TIMINGS

Today, In this post we will see what are the market timings for STOCK EXCHANGES (NSE or BSE) in India.

Market function on all days except Saturdays, Sundays and holidays declared by them. In markets, there are 2 types of sessions.

1.Pre-Open Session: During the starting of this session  (9:00-9:07 hrs), you can place your order but it will be in pending state. After the closing of pre-open order entry (9:08 hrs) your orders will start executing.  You will not make any changes to your order after 9:08 hrs till 9:15.

Order entry & modification Open : 09:00 Hrs
Order entry & modification Close : 09:08 Hrs

2. Regular Trading Session: This session functions from 9:15 hrs to 15:30 hrs. You can place or modify your order during this time.

Normal / Limited Physical Market Open: 09:15 Hrs
Normal / Limited Physical Market Close: 15:30 Hrs

Apart from these 2 sessions, there is a Block deal session for High Net Worth Investors between 09:15 hrs and 09:50 Hrs.

 

IPO market session timings are different from regular session timing.

1. IPO Pre Open Session: 9:45-9:59 Hrs

2. IPO Trading Session: 10:00-15:30 Hrs

Key take away 

  1. The pre-open session is very volatile and can give face signals regarding the number of buyer and sellers. Unless it is not very much necessary, do not place your order during the pre-open session.
  2. You can place AMO (After Market Order) if you want to participate in pre-opening but do not want to place an order during (9:00-9:07 hrs).

Read: How long-term investing creates wealth?

Market Holidays

Source: NSE Website

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Bitcoin General Investing

IS PURCHASING BITCOIN WORTH NOW?

BITCOIN

Yes, Go ahead and buy BITCOIN only if you can afford to lose your entire invested money.

Does it scare you? 

Now maybe I am very conservative or do not want to explore new areas of investing  But I am certainly not want to throw my money in the thing which does not have any underlying asset or value.

Have a look at 1-year price graph of BITCOIN

Chart source: Coindesk

BITCOIN has surged close to 900% in the just 1-year (as of 29/nov/17). That seems to be a marvellous return on any investment.

There have been numerous investment options for investors like stocks, bonds and fixed deposits etc. Now there has been a new option for investment named BITCOIN.

Most of us do not understand what BITCOIN is and how it can be revolutionary?

The underlying purpose of BITCOIN was to provide country less currency which cannot be controlled by any government. It was meant to be used for a transaction so that you can buy or sell any goods or services across the country boundaries. Now, BITCOIN price changes every hour at 3-5% rate. As a result, it cannot be accepted as a payment type.

Does anyone think with 3-5% fluctuation in rates anyone still wants to buy or sell anything with BITCOIN?

A proper answer will be no. No seller will be willing to see so much volatility in his revenues as his profits entirely depend on it. As of now, (Dec 2017) FOMO (Fear Of Missing Out) is getting hold of everybody. Nobody wants to miss the opportunity to buy BITCOIN. That is the reason we saw a significant rally in last 4 months.  It has moved from 6500 to 12,000 levels.

Is this a BITCOIN bubble?

Maybe yes, A bubble is often misleading term. Whenever a thing is termed a bubble people tend to think, it is going to collapse soon. But the truth is bubbles are hard to picture and you never know when they will grow more or will burst out.

One thing is certain, exponential growth which BITCOIN is currently eying cannot last forever.

Why not invest in BITCOIN?

  1. There is no underlying assert which BITCOIN has.
  2. No one controls BITCOIN, therefore it can surge to infinite levels or can decline upto 90%  or even 100% within hours.
  3. With such a volatile prices, it could not be used for payments.

I would not recommend anyone invest their hard earned money in such a volatile instrument. There are plenty of investment opportunities out there. And certainly, BITCOIN is not among them.

Read: Do not let your emotions control your investment decisions

Read: How to invest when the market is all time high?

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General Investing Investing Lessons

I REGRET SELLING THIS STOCK : SatinCreditCare

I have occurred huge loss in Satin CreditCare, due to my impatience and following advice from others without my own discretion.

Moneycontrol link

I lost around Rs 10,000 in Satin because of my immaturity in the stock market.

Take a look at the Satin CreditCare price trend in last 3 years.

My journey in Satin CreditCare

I invested in satin in Feb 2017 with around Rs 9,000. That was sort of peak of this stock. Being a novice investor, I keep on averaging out as soon as stock decreases 10 points. At Jun 2017 My invested price in satin was around 38,000 with a current value as 28,000.

Satin works in the micro-finance sector and it was demonetization hugely affected its business. It posted huge losses in Q4 2017 and Q1 2018 from profitable quarters in 2017. Being a small firm there was not much of news and data available on the web apart from Annual reports.

I was getting impatience and sad to see such a huge loss on my portfolio. As of this saying,I was not willing to accept any further decline in the stock price. So I took a big decision, to exit from Satin @ 270 in early Jun 2017.

But to my huge surprise, the next day Satin Credit Care’s price climbed around 7%. And in last 5 months, it has grown 50% from the exit price.

On that day I learned a lesson, hard way.

For the people who what to jump into the overwhelming place of creating wealth. Some of my observations during my investments are

  1. To every new investor out there, first, decide your time frame of investing.
  2. You should ask yourself whether you are a Trader or an Investor. If you are not sure about this, please refrain yourself from investing, you are bound to lose money.
  3. An Investor should do his own research and invest for long term.
  4. Do not get panicked by the short-term volatility of the stock.
  5. Do not just sell a stock because it’s share price has fallen because Markets are uncertain and they will be uncertain.

This is why Investing is art rather than just science.

Read: Do not let your emotions control your investment decisions

Read:  How to invest when markets are all-time high?

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General Investing Technical Analysis

WHAT DOES STOCK DELIVERY MEANS IN MARKETS?

If you are a new investor and always get confused about the real meaning of stock delivery. Then today we will understand what does stock delivery mean and how knowing it could help you in making better investment decisions.

Taking a stock delivery means buying a stock and holding it with you more than a day. When you buy and sell a stock on the same day, it is called Intraday Trading. So whenever you are bullish on a stock for the long term then you are taking delivery of that stock.

Could knowing the delivery of a stock help you in making a better investment decision?

Yes, Suppose the delivery percentage of a stock is increasing which means that number of stocks are getting transferred from one investor to another (also said as the stock is exchanging hands). If the stock price is also increasing with the delivery of stock, then plus sign that investors are getting bullish on the stock.

You should not link delivery percentage with the volume of the stock. The stock volume represents the number of which get stock traded whereas stock delivery represents the number of stock which exchanges hands.

You can check delivery percentage on daily basis on StockEdge App.   Now, check this screenshot of stock deliveries of Satin Creditcare.

 

For the last 4-5 days, stock delivery has consistently increased with the rising stock prices. It directly implies the long-term bullishness on the stock.

I hope this post was able to shed some light on the meaning of delivery of the stock.

Read: How to invest when market is all time high?

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General Investing Product Review

OPEN A DEMAT & TRADING ACCOUNT

As a swordsman keep his sword sharp enough, you should also use best resources available for trading or investment.

As you will be aware that you need and a demat and trading account in order to do investment in stock market. There are tons of brokers who provide both and charge their customer on flat or percentage basis.

I have been using Zerodha for a year. I have been impressed with their platform which is quite impressive. Their charges are also transparent and flat against other brokers who usually charge percentage basis. Zerodha do not charge anything for delivery based trading. Delivery based trading means you buy a stock and sell it after a day, i.e. same day buying and selling is not included in delivery based trading.

 

Open an online trading and demat account with Zerodha and enjoy the lowest brokerage

Have look on their clean and elegant UI.

 

Read: Start investing now, Learn Fundamental analysis

List of charges for account are as follows

Type Charges
Trading Account Opening Charges (One Time) ₹300
Trading Annual Maintenance Charges AMC (Yearly Fee) ₹0 (Free)
Demat Account Opening Charges (One Time) ₹100
Demat Account Annual Maintenance Charges AMC (Yearly Fee) ₹300

Some long-term investors get worried that whether they should go for new brokers such as Zerodha. Zerodha is been operational for 7 years. Any investor should not worry about Zerodha or any broker as their holdings (shares purchased) lies with CDSL/NSDL. And your broker is just an intermediary between you and the stock exchange.

Open an online trading and demat account with Zerodha and enjoy the lowest brokerage

In the end, you can choose any broker whichever makes you feel comfortable.

Money saved is money earned.

I hope this post has been informational.

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General Investing

HOW MANY SHARES DO YOU NEED TO BUY FOR THE PRICE TO GO UP?

Let us understand first what is the price of the share?

Whenever you want to buy a stock a given price then you should have a seller who is offering share at your bid price and vice-versa. If a seller’s asking price and buyer’s bid price matches then a trade occurs between the buyer and the seller. The trade price is known as the price of the share or the last traded price.

During a day a lot of traders and investors buy and sell shares of the company. The number of shares traded is known as the volume of the stock.

The number of shares which can affect the price of the stock depends on the market capitalization of the stock and the demand-supply of that stock in the market. So if the market capitalization of a stock is low then the stock will have less floating shares in the market. Then a small amount of trade order can also affect the price of the stock. But sometimes 70% of the total retail shares, if traded, would also not bring the price up, whereas sometimes even 1 share could fluctuate the price.

Companies such as Infosys, Reliance Industries, etc have a very large market capitalization (> 1 lakh crores) so if you place an order of 100 or even 1000 shares then it will not affect the price of the stock.

Whereas smallcap companies such as Standart Capita, Indrayani Biot, etc have very less market capitalization. So even if you trade with a small order of 10 or 100, it will change the price of the stock.

Here are some screenshot, just to represent the small volume affecting the stock prices.

                 

I hope this post has been helpful to you.

Read: Why stock prices change?

Credits

Quora answer

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General Investing

BRIGHT & DARK SIDE OF INVESTING IN STOCK MARKET

Majority of investors make buying or selling decision in a haste which causes them to settle down with less profit or even loss sometimes.

There are few stocks which have always added wealth for its all investors. Whether you have bought a stock 10 years ago or 1 year ago. Short-term investments like less than 1 year are very much volatile and usually erode investor’s money.

Have a look on 5-year stock charts of some companies

 

1. Eicher Motors Ltd

2. Shree Cement Ltd

3. MRF Ltd

4. Avanti Feeds

All these companies have performed well and have been multibaggers in the last 5 years. There has been a constant demand for these companies stocks in the market. Do not get amazed if your broker still recommends any one of these stocks for long-term holding. Most of these have been companies are consistently posting growing results thereby showing improving profits and business stability.

But wait, this is only the bright side of the picture. Have a look at these company’s stock charts.

The dark side of Picture


1. Reliance Communication


2. Sun Pharmaceuticals

In both of these companies, if an investor would have invested his money when the companies were at the highest price, this would have been definitely eroded money. There are a lot of examples of such companies.

Most of such companies failed to deliver results according to the investor’s expectations. For example, RCOM has nearly 40,000 Crores of debt which reflected a very bad image among investors.

Let me share the secret to create wealth. If anyone wants to create wealth find a company whose business is emerging and performing reasonably good. Stay invested in the company until fundamentals do not change. When the company’s business improves and performs better then its stock price automatically follows it.

Read: Start investing using MoneyControl App

Read: New to investing, try Zerodha Smallcase

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General Investing Latest Post

INVESTING WHEN MARKET IS ALL TIME HIGH

Nifty hovering at 10400+ level

With the market being at all-time high, some investors are becoming more optimistic and some are becoming very cautious.

Today we will see market position doesn’t create wealth but the emerging or growing business definitely does. Let us see what market is?

Nifty is an aggregated index of top 50 companies listed on NSE. Whereas Sensex is aggregated index of top 30 companies listed on BSE. The selection of these top companies is monitored regularly and updated at frequent intervals. In a year indices have a minimum of 4 updates in the list of companies.

Read: What is Nifty and Sensex?

Do not let market to make investment decision for you. There are plenty of companies which are still undervalued in much hyped over-valuations.

Market are indices which are bound to attain higher levels. They grow with the economy and the earning of the comprising companies. But sometimes market grow at a higher pace without the growth in earning of the companies. Most of the investors start becoming optimistic about the future growth of the companies.

Now you know when the market is at all time high then companies comprising the index may be reasonably valued or over-valued. But NSE has over 5000+ listed companies and some of the companies are still undervalued. As an investor, your job is to find such companies and study them. If the companies pass all your tests then you can definitely invest in the same.

Read:  Should you consider stock price while buying?

Freely available resources for fundamental analysis

  1. MoneyControl app and website: will give you news update and financial data of various companies.
  2. Screener.in: Will help you in a detailed fundamental analysis of the company, also provide export to excel option.
  3. Stock Edge app: A power pack app, help you to technical analysis, provides various scan help you in making better trading decisions.

Investment requires patience and hard work. So always invest for long term.

 

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General Investing

ARE STOCK MARKETS A GAMBLE?

Everyone wants to be rich and successful and there are a lot of ways to achieve the same. But the real truth is everyone could not be a billionaire. Everyone has a different set of skills and ambitions so are their expectations.

One of the ways to become rich is through investment in stock markets. When people start investing in stock market their primary reason is to create wealth and that too fast. The irony is that these people forget their patience when it comes to stock markets. And when these same people used to invest in bank FD and PPF, they had a patience of waiting for at least 3 to 5 years to get decent returns.

So what happens when they start investing in stock markets, why everyone wants to be rich overnight?

Let us see how one start investing in stock markets?

  1. They follow brokers calls or advice for their investment.
  2. They follow the advice of family member or a friend who has been investing previously.
  3. They follow call and advice shared on a business channel by financial analysts.
  4. They hire a financial advisor and follow his advice.
  5. They do their own research and analysis and start investing.

These are the only ways through which a person (retail investor) start his investments portfolio. You will be shocked to hear, that the percentage of people who fall in top 3 categories are most. Moreover, when it comes to investment most of us also shut down our brain. These people start following brokers, Tv analyst advice as they are the god of the stock market.

Read: Why long term investing creates wealth?

Remember wealth is not created overnight nor by purchasing a stock on someone’s recommendations. Do you think the stock market is all about buying low and selling high? Retail investors buy a stock in hope of getting returns from it but the price an investor pays for buying a stock is what matters most. Wealth is only created if you have bought stock of a company at fair value.

The stock market is a game of greed and fear. There are a lot of investors who have lost millions of money in it. But there are another set of investors (usually few) who made a fortune out of it. How they were able to do so?

  1. Investors had patience and courage to dig out the information whenever it is needed.
  2. Most of long term investors never acted on the small information and stayed invested in the company until its fundamental does not get changes.
  3. Long term investors always purchased stocks at their fair value.

Here we have another irony. The fair value of the stock which everyone talks about is not the same for every investor. If you ask 5 different investors you will get 5 different fair values of the same stock. Then the key is to stick to your analysis and keep improving until you master it.

Today I want to discuss a case of Avenue Supermarket (Dmart) and then we will try to analyze how one loses money in stock market.

Avenue supermarket IPO opened for subscription on 08 Mar 2017.  The IPO worth 1870 Cr got hugely oversubscribed by 100 times.

Most of the brokers were optimistic and gave a subscribe rating to this IPO but some of the big investors like Porinju were a bit a skeptical about its high valuation. Link 

But the IPO gave everyone a shock when it got listed with a bumper price on stock exchanges on 21 Mar 2017. The listing price (Rs 600) was just double of its issue price (Rs 299).

So if someone will buy the stock now he will be paying double of the issue price and definitely, the valuations were overstretched too. But then also Dmart remained everyone’s favourite.

In Apr 2017 almost every TV analysts were yelling about Dmart high valuation and everyone one should be cautious about buying it. Livemint also covered a post to tell that it is the world’s most expensive store.

So if an investor buys Dmart stocks now he should be knowing that there is a huge risk of downside and he can lose half of his money. If the company failed to give expected quarterly earning stock prices will definitely fall.

After 4 months of IPO in Sep 2017, Goldman Sachs initiated a buy coverage on Dmart with a target of Rs 1586  for next 10 years. On that day, Dmart’s shares zoomed about 18%. Everyone was knowing that they are paying 2.5 times of the IPO issue price which was just issued 6 months ago.

It is sorry to say that investors kept an eye only on the perspective gains but not on the downside of it. Novice investors keep an eye on a stock which is going high and high. They do not care about looking over other investment opportunities. About Dmart, even now the investors are saying it is overvalued. Link. Now if an investor who is invested into it should wait for at least 5-6 years to create wealth out of his investment. But most of the investors are short of patience and because of that, they start losing money in stock market.

Read: New to investing, learn fundamental analysis here

Read:  Stock market Scams

Yes, the stock market is a Gamble if you do not understand what you are doing. 

If one understands the market and doesn’t make hasty decisions he/she can create a good amount of fortune from it.

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General Investing Important Concepts Must Know Facts

STOCK MARKET SCAMS

The Stock Market is indeed a massive beast which is difficult to understand and manipulate. Understanding behavioural finance is key to excel in the stock market. But most of the people buy or sell a stock because they want to follow the trend. This trend could be in favour of you sometimes but not always.

Today, I want to talk about some type of scam which is still prevailing in markets. These scams are difficult to trace therefore SEBI could not take action against the culprits. The main prey of these scams are Retail Investors, people like me and you. As I said the market is difficult to manipulate but some stocks which fall below 500 Cr market capitalization are much easier to manipulate compared to others.

Read: How much shares you  need to buy to increase share price?

Idea behind Scam

A promoter or related person referred as operator decides to double or triple money in short period of time less than 1 year. The operator decides to buy a particular stock in huge quantity but less than that which cannot come into limelight. Now, the operator starts to promote, he hires some agency for sending fake/scam messages to retail investors. This process keeps on going for 1 to 6 months. Within a month, stock prices start to take a hit and getting stuck at Upper Circuit daily. After few months, the operator starts selling his stake. The operator is very happy as he has already doubled his money and now sitting on huge profits.

Who get trapped? 

Retail Investors get trapped in this scam. Once the stock operator decides to take his stakeout, stock start hitting Lower Circuit. Retail Investors start getting worried and they also start taking out money. Once this mass selling starts, the stock keeps hitting Lower Circuit and most of the retail investors get trapped.

See the fake/scam calls which I received in August 17.

 

Now check the market trend of these scripts.

My idea of posting this article is to help Retail Investors to avoid such cheap gimmicks and do not get trapped in such scam calls. There is nothing like easy money so stop becoming greedy and patiently wait for your investments to grow.

Read: Bitter truth about Stock Market

Happy Investing.

Credits for charts: TradingView

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