Invest in Commodities in IndiaRecently, the price of crude oil went negative due to very low oil demand because of coronavirus. This very low price of crude oil aroused interest in many traders and investors to invest in crude oil. Not only just crude almost every commodity be it natural gas, copper, aluminium, etc are also trading at very low prices.In this post we will discuss 3 ways to invest in commodities in India.#1. Buy directly from MCXAll you need is a commodity trading account, which almost every broker offers. Once you have activated the commodity trading account you can directly buy crude oil and also other commodities as well through your broker.The drawback here is that commodities are traded in derivative form, which means you can trade in them through futures and options contract, which have an expiry date. So this is more of a trading product and not an investment product as you can’t hold it for long without rollover.Just recently, since US Oil futures traded negative on the day of expiry, India’s Oil futures closed negative as well on the day of expiry, and traders who did not book losses manually, made a loss of over INR 4.5 Lakhs per lot.So, think very carefully if you want to trade in commodities via this route.#2. Buy the stocks of companies producing commoditiesWhen the price of any commodity drops, the share price of the company producing that commodity drops simultaneously. So, if you are keen on investing in the commodities, instead of directly buying the commodity you can buy shares of associated companies dealing in that commodity.For example, if you are interested in crude oil, you can invest in companies like ONGC, Oil India which are producers of crude oil. If you are interested in copper or zinc, you have the option of Hindustan Copper and Hindustan Zinc like companies. If you have an interest in aluminum, you can buy Hindalco. If you have an interest in Iron, which is the main component in making steel, you have NMDC.Likewise, you can check the listed company dealing in a particular commodity and invest in them directly.#3. Commodity Mutual FundIf you do not invest in equities directly or do not want to put your capital in high-risk money markets (equities), you can always go the Mutual Funds way.There are some sectoral mutual funds such as the natural resources funds. These funds invest in companies dealing with the production or distribution of commodities. When the majority of the commodities are trading at lower prices this can be a better option.As we can’t buy every commodity company but can easily buy a commodity mutual fund. One such fund is DSP Blackrock New Energy and natural resources fund. Below is the portfolio of this fund, you can see the fund has invested in various commodities-related companies.So you see, these are the 3 ways by which you can invest in commodities if you feel the commodity prices are significantly down, just like now due to COVID-19.If you are unable to determine which investment route you should follow, let me help you a bit but after all, it is going to be your choice alone.Commodities via MCX: As mentioned before, these trade in futures and options, meaning there will be a minimum of 100-1000 pieces per lot that you will have to buy, and they become a part of extremely high-risk trading. Only if you can bear a significant amount of losses, you should opt for this route. Since it a very high-risk tool, it also gives you a very high return on capital.Commodities via Equity: This is a relatively less risky way to invest in commodities. If you can identify a good quality company in your preferred choice of commodity and enter at the right price, the risk-reward ratio can work in your favour and create wealth for you. Our personal favourite company in commodities in NMDC, Reliance, Hindustan Zinc, and a few more.Commodities via Mutual Funds: This is the low-risk low reward way to invest in commodities. Mutual Funds that have a portfolio of commodity companies and are well-diversified offer a safe investment option. This is for those who want to play it safe while having patience for their capital to grow over 3-10 years.
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Why do 95% of people lose money in the stock market?Actually it is true that 95% of people are losing money in the stock market. But what are those mistakes they do while trading in the stock market and lose capital? Here are some highlights of those mistakes:Not Understanding Market TrendsPeople always lose money because they never understand the market trends or with which trend they should begin the trade.Letting Emotions Guide Decision-MakingEmotions like fear and greed should never control your investment and trading. Greediness and fear both can spoil your trading pattern and portfolio too.Wonder to Getting Rich QuickSome traders and investors lose money in the stock market because they think stock market is a money-making machine. With this mentality to become a millionaire in a day or two, no one can get returns in the stock market, instead, they lose money.Lack of discipline in tradingThere is no boss for you in the stock market that doesn’t mean you will trade in any random manner. Always do your homework by doing research and gain maximum information and always trade with discipline. Make your own principles to follow.Not following stop lossWhen price moves against your trade, don’t wait for the price to move in your favor. People often don’t like to place the stop loss. Always place a proper stop loss, accept the small loss, and immediately exit the trade.Revenge on losing moneyWhen traders lose their money at the beginning of their stock market career, they start trading more aggressively like they are taking revenge and again lose heavy amount.Not to withdraw any profitsMany traders in the stock market whenever they make money, never withdraw it instead they re-trade with those profits and further lose all money including profits. Make habit of withdrawing your profit. – It will impact very positively on your trading skills.These are the very common reasons all traders and investors do because of which they lose money.
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What are some good intraday trading strategies?What are the intraday trading tips for beginners?Intraday trading tips, basic rules and strategies:Below are the Intraday Trading Tips for beginners:-Breakout: Intraday trading runs mostly on intraday chart patterns. One should follow basic technical while doing intraday trading. If any stock is breaking it’s resistance, you can enter in buy position with appropriate stoploss, same way if any stock is breaking its support, you can sell it with appropriate stoploss. Stoploss can be pivot point or its previous close.Calculating Pivot Points: It is also called point of rotation. To calculate pivot points you can use previous day’s high + low + closing price divide by 3. You can calculate resistance and support levels after finding pivot points. First resistance is 2*P-Low.Second Resistance is P+ (R1-S1). First support is 2*P-High. Second Support is P-(R1-S1). Basics indicators and charts have to be followed for Intraday Trading.Limit your losses: Stop Loss controls risk of your capital. In a short position you can place a stop loss above a recent high, for long positions you can place below a recent low. Also you can change depend on volatility. Stop Loss has to be placed especially if you want to make good profit in Intraday trading by reducing loss.Risk reward ratio: Traders and beginners must understand appropriate risk reward ratio. Find stocks that provide adequate risk reward ratio of 3:1 which is beneficial for making profits. This is one of the best intraday trading tips for beginners.Trade with Market Trend: Most Important rule for Intraday Trading is to go with Market Trend. As if market is up then try to make buy position and if market trend is down then try to make a short position.Risk involvement: Intraday trading is completely risky so if any person is coming with only profit expectations or with sentiments, he/she should not trade because market will never understand your emotions. Intraday trading is a technique which can be learnt and improved day by day so you have to keep on learning every day.Stock selection: Stock selection is most important part in intraday trading so you have to choose stock very wisely.Risk Management: Intraday trading involves high risk which can give complete or partial capital loss so there should be risk calculation like 2 to 4% of risk of entire capital in a single trade. Because if your trade goes in to loss, you don’t lose more than that.Don’t borrow money: Never ever trade in stock market with anybody’s money. Yes this is most important while trading because I have seen many people who takes personal loan or borrow money from someone and regret after losing that money. You should trade with your own spare money only.Keep adequate capital: I have seen many people who make loss just because they don’t have sufficient capital to survive in market like many people trade 5 lots for Intraday in 1 lac capital. I don’t recommend this because sometimes you may get profit but it’s purely a gambling to trade like this. Always put sufficient capital to trade as per NSE margin guidelines and also maintain MTM so that you don’t have to book losses.
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Is the market out of the woods? If so, what can we expect?Nope…the stock markets are still not out of the woods…the main reasons for this are…1 country wide lockdown is still prevailing.2 Although government has provided some relief to particular sectors like information technology and such related work… to start functioning..but still majority of economic sectors are not functional.3 Specific sectors like tourism and hospitality have been totally destroyed due to this lockdown caused by Covid-19..and there is very less chances of their speedy recovery.4 Although banking sector is functional.. but NBFC sector is still not functional..which is hurting this sector very badly.5 As majority of non essential commodities production is halted …like footwear, clothing etc it also will have a negative impact on such sectors..6 Along with all this this lockdown has also caused a great hit to the MSME sector which is also the biggest employment provider in the country and hence rate of employment will also so negative trends..So from above we can see that indian economy as well as stock markets are still not out of the woods …our Government and RBI are trying really hard to give good stimulus to the economy and if things went up to the plan..then definitely very soon stock markets will be out of the woods..
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Do you also believe that long-term investors make more money than day traders? Why and how?There are a number of highly successful long-term investors. The likes of Warren Buffett and Charlie Munger instantly spring to mind. They have generally returned around 20% per annum over their investment careers. While this level of return is unlikely to make any investor rich in the short run, when compounded over a long period it can lead to significant returns. For example, over a 30-year time period it could propel an initial sum of money around 237 times higher. As such, even modest sums could become seven-figure portfolios.Of course, most investors may be unable to deliver returns which are as high as 20% per annum over a 30-year time period. However, even returns which are in line with those of the wider index could end up turning a small portfolio into a large one in the long run. For example, returns of 8% per annum over the course of three decades would equate to an end value which is ten times larger than the starting amount. As such, the potential rewards from long-term investing are evident.RisksIn contrast, there is a lack of short-term traders who have made $billions in recent years. Certainly, there are success stories. However, there seems to be a lack of success over a prolonged period. This indicates that short-term trading is not only risky, but incredibly difficult.In fact, it could be argued that the short-term movements of share prices are somewhat random and that it takes time for the effect of a new business strategy, political event or changes to the macroeconomic outlook to come to light. In the short run, such changes are incredibly difficult to quantify and it could be argued that short-term trading is more reliant on luck and less on skill than is the case for long-term investing.Certainly, long-term investing is not without risk. Investors make mistakes and this leaves them with losses from time to time. However, since they have a long-term outlook, they can afford to sit on paper losses for weeks, months and even years as they wait for the catalysts they have identified to have an impact. Short-term trading, on the other hand, often uses stop losses. They mean that a position is automatically closed if a specified level is reached. Therefore, there is a much narrower margin of safety than is the case for long-term investing.TakeawayShort-term investing has the potential to be highly rewarding, but the risks involved mean that on a risk/reward ratio it is less attractive than long-term investing. It may be more exciting and the potential for high, fast returns may attract some investors to it. However, by focusing on the long run it is possible to build consistently high returns, just as the likes of Buffett and Munger have done. Doing so may not be easy, but by focusing on risk as well as potential return, even a modest sum could be a significant one in future years.
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What is the total wealth of Mukesh Ambani after the Facebook investment in Jio?RIL or the Reliance Industries Ltd…has been one the biggest and most successful indian conglomerate…since from its inception under the guidance of Dhirubhai Ambani company had a great vision of becoming the top company of India…but it was.. Mukesh Ambani under whose guidance and supervision this vision had been converted into reality.Now coming to your question…as recently a major deal with Facebook (a whopping $5.7 billions) had really set the ideal growth environment for RIL..and because of this .. Mukesh Ambani has been also rewarded quite wealthy…as After the Reliance Jio-Facebook deal was announced recently, Mukesh Ambani's wealth surged to make him Asia's richest man surpassing Jack Ma. Ambani's fortune rose by $4.69 billion to $49.2 billion after the deal…and it's still on the rise.
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What is the biggest lesson you have learned as a stock investor?I must confessed that I have a sceptical attitude and reservation before I started investing in the stock market. In addition to substantial risks or volatility, stock market investing is exclusively for expert business people.It must be daunting as it requires extensive financial knowledge and experience.However, the truth is even an ordinary person like you and me can participate in the stock market.What makes the difference?Simple.Two years ago, I put my money in SBI. Today, instead of keeping the money in the bank, I bought stocks from SBI. I am now a shareholder of the company. This is the difference.I must say stock market investing is a great learning experience.So, let me share with you what I have learned from my personal investment journey in the stock market. If you have been investing for long, I’m sure you can add some on the list.1. Be patientWhen you see a lot of reds in your portfolio, sometimes it can drain your brain and emotion.However, when the stocks are down, you can't do anything about it. This is beyond your control. You need to see the value of patience and learn to ride the ups and downs of the stock market. You just need to have patience and keeps investing regularly no matter what.2. Understand the value of timeAs a newbie investor, I have seen the value of time in investing. Once you realized how precious time is, you wouldn’t waste it. If I have known this ahead of time, I would have started my journey into the market sooner.In my opinion, procrastination is one of the greatest enemies of achieving your financial goal. So, use your time wisely.The value of compounding interest is a great wonder of the world as what Albert Einstein said. Over time, you will reap what you have planted a long time ago. If you have not yet started investing in the stock market, I hope you would begin in 2020 as time is so precious.3. Find a great mentorThey say an investment in knowledge pays the best interest. In every endeavor you do, there is wisdom in finding a mentor and educate yourself before you do investing.As for me, Book Intelligent Investor is a great mentor when it comes to financial education.In addition, I don’t have to worry and look at trades all the time. While other traders and investors are worrying so much during this crisis, I am confident and secure that my mentor will remind me that crisis is a great opportunity to earn more.4. Learn to manage risksEvery investment opportunities has potential risks involved. Whether you have saved money in the bank, or you have invested in mutual funds and stock market, investment is always associated with certain level of risk.While stocks investing involves volatility, the truth is that if it is managed properly, you will surely gain potential returns in the long run. Risk and Reward are the two sides of a coin.5. Have disciplineMany times I was tempted to spend my hard-earned money with things that are not necessaries. Discipline is important for you to develop the habit of investing.But when you start investing, you started to look beyond the present. With discipline and consistency, it is not surprising to reach your first 6-digits investment in one year. However, you need to discipline yourself and be consistent of funding your online portfolio to achieve your financial goals.Here is a summary of the learnings from my experience:Be patientUnderstand the value of time, soon the betterFind a great mentorLearn how to manage risks, in real life and stock marketHave discipline in your life.
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What are the best ways to make consistent profit in intraday trading?Is it possible to be consistently profitable in intraday trading?Now that sounds too simplistic but you need to understand that intraday trading is less about risk taking ability and skill and a lot more about how you manage your risk. In intraday trading, you start with the premise that you need to protect your capital and then start trading. To consistently make profits in intraday trading over a longer period of time, you need to start off with simple things like documentation, setting limits and managing risks.Here are the 10 steps to focus on.Have you created your trading rule book and if not, then start the process right away. The trading rule book basically lays down all the rules and regulations for your intraday trading. This includes questions like - the loss you are willing to take, the capital depletion you can afford, preferred risk-reward ratio etc. It is your trading constitution book which you must adhere to.Define your maximum loss at various levels. Define how much of your capital you are willing to lose. At that point, you must stop trading and get back to the drawing board. You must also define the maximum you are willing to lose in a day. If that loss occurs in the first one hour, then have the discipline to shut your terminal for the rest of the day.In any intraday trade, stop loss is the Holy Grail whether on the long side or on the short side. Normally, stop losses are linked to support and resistance levels but can also be set at your affordability level. Stop loss must be a part of your order and not an afterthought. Secondly, when the stop loss is triggered, just close the position and don’t try to average it.In intraday trading, always work with a reasonable profit target in mind and be flexible about it. These profit targets must also be imputed in the system as part of a bracket order so that once the stop loss or profit target is triggered; the other leg automatically gets cancelled.Buy on hope and sell on reality. As an intraday trader, you largely deal with expectations. Once the street knows about it, there is hardly any trade left in the stock. If you are trading based on news flows, you will have to initiate the trade based on expectations and then book your profits when the actual announcement is made.You can’t outsource charting and research as an intraday trader. It is not too complicated and a few basic rules are good enough for you to consistently trade intraday.Ensure that you are in control of your open positions. Don’t have too many positions open at one point of time as they can be hard to track. This is a mistake intraday traders often commit. Your mental bandwidth only allows you to track a limited number of positions in terms of fundamentals, charts and news flows.A very important rule in intraday trading is “doing nothing” and it is also an intraday strategy. Quite often, when you look back, it is the most profitable strategy. Intraday trading does not mean that you must either be long or short at all points of time. When the market is too confusing or volatile, take a conscious call to sit out of the market.As an intraday trader, you are most likely to be successful if you stay close to the market trend. The trend is your friend because it always has a story to tell you. When the market shows a trend it is your job to listen to that message and trade accordingly. At the end of the day, the market is collective wisdom and is always smarter than you. Once you develop that humility in intraday trading, you are on the profitable path.Documenting and recording may look like mundane jobs but they are the core for your successful intraday trading. Start maintaining a trading diary. It is not just a record of your trades and the logic, but also a daily end-of-day evaluation of how it fared. Make notes on where you went wrong and how you could trade better. Over time, your intraday trading skills gets fine-tuned.Intraday trading is a short term trading approach and it should be treated as such. Your focus must be to manage your risk and keep churning your capital rapidly so that your ROI can be enhanced. Above all, intraday trading is about a continuation learning experience!
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Why do people prefer intraday trading instead of holding it for a week or two and sell it?Intraday trading always looks attractive to newcomers or to those who have less capital. Intraday trading is like T20 Cricket, which is still favorite amongst traders. As we like T20 most and Test cricket least because of timing, the same thing applies in the market as well.There are a few common reasons behind that which I am mentioning here:Intraday Margin: All brokers provide intraday exposures to clients for intraday, which is the most common reason for attraction. Suppose if you have 50,000 balance in your account, you will get ten times to 20 times the exposure for intraday, which looks lucrative to traders because they don't have to spend huge capital for a trade of 5 lac or 10 lac.No Overnight Risk: This is another common reason because many traders think that I don't want to take an overnight risk. I don't know what will happen tomorrow, so whether profit or loss, I will clear my position today, and I will do fresh trading tomorrow.Instant results: Intraday trading is instant trading, which gives results in a short time only. You don't have to wait for days or months, which attracts everyone like T20 Cricket.Lucrative profit without investment: Your money is free while you are trading in intraday so you can withdraw it anytime. You don't have to block your investment, and you are getting 5000 to 10000 profit in the investment of 50,000, which seems to be lucrative for traders, so they always prefer intraday.MIS, Cover order, and Bracket order facility: Brokers like Zerodha and others are giving facility to take trades with calculative, which has high values, but you can trade with small capital.Intraday movement and volatility: Intraday traders get good volatility in stocks to play in low investment, so it gives them greed and attraction to do more trading for intraday.Lower brokerage: Traditional brokers charge delivery brokerage up to 50 paise, while they charge only two paise to 5 paise for intraday. This is also another reason for intraday trading because you don't have to pay high brokerages.
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What is the best method to trade nifty futures?How to Trade Nifty Futures is in continuation to what is Nifty 50 Index (Nifty) & How to Trade Nifty? which guide the beginners to understand all about Nifty Index,its constituents and how to trade or invest in Nifty?So,for those interested in trading nifty futures should learn & understand more about what is nifty and its future contract requirements & features.Nifty Futures Liquidity:-CNX Nifty futures contracts provide adequate liquidity for active day traders, hedge funds and longer-term traders, although volume can vary significantly from day to day.The Bank Nifty is also active enough for most short- and long-term traders, although once again volume can vary significantly from day to day. Day traders will need to pick which days are best to trade, while longer-term traders aren’t likely to face significant liquidity issues.The Nifty MidCap 50 usually does very little if any volume, and there is not useful information for retail traders.How Much Margin Capital Required to Trade 1 lot of Nifty FutureNifty future is very popular among traders, many newbies want to learn to trade nifty future. But one that hits most in mind of a new trader, it is what is capital required to trade nifty future. Though capital requirement will be as low as 8% for the index such as Bank nifty future and Nifty future.The NIFTY 50 index National Stock Exchange of India'sbenchmark broad based stock market index for the Indian equity market. Full form of NIFTY is National Index Fifty. It represents the weighted average of 50 Indian company stocks in 13 sectors and is one of the two main stock indices used in India, Day traders, swing traders, hedgers, and hedge funds all trade CNX Nifty and Bank Nifty futures. The liquid market allows for all these traders to attain and exit positions with relative ease (most days), and in quantities that suite each class of trader.Trades are usually taken for speculative reasons, anticipating the future direction of the broader stock market (CNX Nifty) or the banking sector (Bank Nifty). Traders can profit from both up or down markets by buying or selling a future respectively.Nifty Futures Exchange:-Nifty futures are traded on the National Stock Exchange (NSE) of India and are cleared through the National Securities Clearing Corporation Limited (NSCCL). This clearing agency acts as a counter-party to all deals and guarantees settlement so traders can collect profits, and are responsible for losses.About Nifty futuresNifty futures are index futures where the order flow underlying is the S&P CNX Nifty index. In India, bank nifty futures trading initiated in 2000 on the National Stock Exchange (NSE).For auction market theory contracts, the permitted lot size is 50, and in multiples of 50. Like additional destinies contracts, Nifty fortunes treaties also have a three-month trading progression — the near-month, the next month and the far-month.After the expiry of the near-month contract, a replacement lease of three-month duration would be introduced on subsequent trading day. Investors can trade Nifty futures by having a margin amount in their account. This margin may be a percentage of the contract value. It’s usually about 10–12 per cent.How to Profit in Falling Markets Using Nifty Future with Small CapitalIf you are sure about some market movement, like if you know certain important support resistance levels, you can make huge amount of money even if you have small capital (INR 15,000). Here is my personal experience, I had only INR 15,000 but i know that 5180 was strong resistance and nifty future should be shorted there for sure shot gain of 50 to 70 points. I patiently waited for nifty future to trade around 5170 level; once it came there I shorted nifty future 5 lots (250 Quantity), as my offline broker gave me that limit for intraday. After making high of 5176 nifty future attracted huge amount of selling and traded at 5109 in few minutes. At this point of time I booked profit on all 5 lots (Squared off trade).Profit from this trade was: Sell at 5170, buy at 5110 Gain = 60 points.Now, total profit is 60*250= INR 15,000 (Without Brokerage and tax). I just doubled my trading capital on one trade.Nifty Futures Margin:-Opening a futures position requires that you put a margin payment. The margin required to open a position fluctuates with volatility, so it may not remain static. It is based on a Value-at-Risk model, which requires that the margin put up is large enough to cover one day’s worth of losses based on historical volatility.These are the methods of trade in Nifty future. But it’s not necessary that you can only invest in one segment. You can also invest in some other segments like options and future stocks. There are some good stocks that can give you good money. A while ago I used to invest in only index like Nifty, Bank Nifty, But after studying stock market and books I started investing in other segments too and I have been earning a good amount of money.Nifty Futures Pricing, Volume and Specification Information:-For current information on Nifty futures volume and prices, and to see to when contracts are expiring, visit www.nseindia.com. Click on “Live Market” and select “Equity Derivatives.”Choose the Nifty futures contract you’d like information about. CNX Nifty and Bank Nifty futures volume and current prices are also typically available on large financial sites.
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Why did Facebook choose Reliance Jio as a partner in India?Facebook recently invested heavily in India..for a huge amount of $ 5.7 billions it purchased good stake of 9.99% in the Reliance Jio..now coming to your question here are some key points which is why Facebook has chosen Reliance Jio..1 Reliance Jio is the biggest Telecom sector company both by revenue and number of subscribers an hence it was quite ideal company to invest in.2 Both Facebook and Jio have almost equal number of subscribers close to 400 millions each and thus make it a huge subscriber base for both to do their business and earn more.3 Like Facebook.. Jio too has great interest in technology and thus making them ideal partnership.4 Also both of these companies have common aspirations like becoming top companies in their respective businesses and thinking out of the box..further made Facebook to consider Jio as partner.So we can see from above that why it was only Reliance Jio for Facebook
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How is the RBI handling the great lockdown?The Reserve Bank of India is the key bank or the central bank of India it is the issuer of the Currency in India as well as the chief regulator of all the banks in India…not only this but it has huge wok portfolio including balancing and safeguarding of the economy…Now as we are amidst the most difficult time of this century…as the pandemic called as Covid-19..has disrupted not only the human lives.. but also the economy of the nation and as RBI being the chief bank has enormous amount of responsibilities to tackle the situation.. specially during the current lock down conditions..And here are some key actions that have been taken by the RBI with the consultation of Central Government…to tackle this menace..1- RBI has available cheaper cash for the lenders and also encouraged banks to lend it to the needy sectors… actually RBI was quite alerted and it started to work on these things even before lockdown was announced..like on February 6, it was announced that banks don’t need to set aside cash reserves for loans given to small businesses between January 31,2020 to July 31, 2020 or for credit to help consumers buy a car or home.2- One of the key decision that RBI made was. about the lending rates of the banks -- the repurchase rate -- was cut by 75 basis points (bps) in a single move this year. However, the effective deposit rate has been slashed by 115 bps to discourage lenders from playing safe and parking the cash with the RBI...Cash reserve Ratio was also reduced to 3% from 4% before-handly…also the Liquidity Coverage Ratio was lowered to 80% from 100% )3 -For giving major and much needed relief to consumers/customers of the bank.. RBI proposed the loan freezing... as per the announcement..All lenders can freeze repayments for three months on term loans outstanding March 1,2020.4 -Lenders allowed to suspend interest payments on working capital facilities for three months; accumulated interest can be paid later and the loans won’t be in default…these steps add to previous measures which allow a one-off restructuring of loans to small businesses that were in default as of January 1,2020.5- Also loans to commercial property projects that are delayed for reasons beyond the control of the developer are allowed to be treated as standard for another year.6-RBI also differed the Implementation of stricter regulations as Rules requiring banks to fund their activities through stable sources has been deferred to October 1 from April 1..along with that Completion of capital conservation buffer pushed to September 30 from March 31,2020.7-Lenders were allowed an additional 90 days to reach a resolution plan on large accounts in default.8 Not only this but RBI also provided the much-needed Special windows..which include support for corporate borrowers as well as rural industry. Till date RBI has provided two such windows..A- TLTRO (TARGETED LONG TERM REPO OPERATION)1.0: Rs 1 lakh crore of targeted long term funds from the central bank to banks for investing only in corporate bonds, aimed at easing cash crunch at firms (on April 15, RBI announced new rule capping the exposure of any bank to a single entity at 10% of TLTRO funds invested).* TLTRO (TARGETED LONG TERM REPO OPERATION) 2.0: Initial Rs 50,000 crore targeted at shadow lenders specially for the mutual fund industries (After the sudden closure of 6 debt fund schemes by Franklin Templeton India), with at least half going to lower rated firms (announced on April 17).So from above we can see that RBI has done a lot to provide the much needed stimulus to the Indian economy in general and it's various sectors in particular..it is also worth mentioning that RBI nowadays is quite active as well as responsive..as it provides all needed help to different industries as per the requirements..be it the case of Yes Bank or the recent chaos in mutual fund schemes.. RBI has taken the right inciative at the right time….and hopefully it's steps taken during this Covid-19 will also bring some positive response…
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Why is Facebook going to invest 43,000 crores Indian rupees in the Jio platform?Facebook will spend $5.7 billion(RS. 43,574Cr) for 10% of Reliance Industries's digital business, as the social media firm looks to leverage its popular WhatsApp messenger to offer digital payment services to small grocers in India.The deal will help Reliance cut debt that has piled up in its push to secure top spot for its Jio Infocomm telco, and help boost its new online grocery marketplace JioMart.The country's online grocery market is lucrative but competitive, with Amazon's Pantry jostling for market share with Walmart's Flipkart and BigBasket, backed by China's Alibaba.But a lot of untapped value lies in the country's kirana stores, or small grocers, lifeblood of the country's $375 billion grocery industry, according to data from the Retailers Association of India.In the near future JioMart and WhatsApp will empower nearly 30 million small Indian kirana shops to digitally transact with every customer in their neighborhood.WhatsApp has 400 million users in India, its biggest market. It has been trying to secure approval to roll out its digital payment service in India, to compete with the likes of Google Pay.Both Jio and Facebook want to tap feature phone users; both have been trying to tap payments and both want to increase grassroots adoptionA marriage of JioMart and WhatsApp services will help reach grassroots users in India who shop from small stores, he said.Facebook's investment will make it the largest minority shareholder in Jio Platforms, putting the enterprise value of the business at about $66 billions.Jio Platforms holds a host of Reliance's digital assets including Jio Infocomm, which has become the country's largest telco within about three years of its launch. It has roughly 370 million subscribers.CUTTING DEBTReliance has also expanded its retail business as profits at its oil and chemical refining business have taken a hit.But expansion has caused its debt to surge to $40 billion as of September. Reliance has said it wants to cut net debt to zero.With crude prices where they are, the main oil and gas business will be under pressure. (The Facebook deal) allows them to cut some debt, and also establish a valuation for the Jio business.Reliance is also set to sell stakes in its refining business to Saudi Aramco, and in its telecom tower assets to Brookfield.
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How does the stock market work? Who decides the price of stocks? What is the logic behind the valuation of stocks?The stock market can be intimidating, but a little information can help ease your fears. Let's start with some basic definitions. A share of stock is literally a share in the ownership of a company. When you buy a share of stock, you're entitled to a small fraction of the assets and earnings of that company. Assets include everything the company owns (buildings, equipment, trademarks), and earnings are all of the money the company brings in from selling its products and services.Not exactly. But unfortunately, that's how many new investors think of the stock market -- as a short-term investment vehicle that either brings huge monetary gains or devastating losses. With that attitude, the stock market is as reliable a form of investment as a game of roulette. But the more you learn about stocks, and the more you understand the true nature of stock market investment, the better and smarter you'll manage your money.Stock exchanges have an interesting side effect. Because all the buying and selling is concentrated in one place, and since it's all done electronically, we can track the constantly fluctuating price of a stock in real time. Investors can watch, for example, how a stock's price reacts to news from the company, media reports, national economic news and lots of other factors.Let’s start with your last question first— A stock market solves this problem. Stocks in publicly traded companies are bought and sold at a stock market (also known as a stock exchange). The reason you go the supermarket is because you can go to one place and buy all of the different types of food that you need in one stop -- it's a lot more convenient than driving around to the butcher, the dairy farmer and the baker. The NSE and BSE are supermarkets for stocks. The NSE can be thought of as a big room where everyone who wants to buy and sell shares of stocks can go to buy and sell.Let’s start with your last question first—how are stock prices determined? Shares in most large established corporations are listed on organized exchanges like NSE or BSE.Why then do prices fluctuate so much? The vast bulk of stock trades are made by professional traders who buy and sell shares all day long, hoping to profit from small changes in share prices. Since these traders do not hold stocks over the long haul, they are not terribly interested in such long-term considerations as a company’s profitability or the value of its assets. Or rather, they are interested in such factors mostly insofar as news that would affect a company’s long-term prospects might cause other traders to buy the stock, causing its price to rise. If a trader believes that others will buy shares (in the expectation that prices will rise), then she will buy as well, hoping to sell when the price rises. If others believe the same thing, then the wave of buying pressure will, in fact, cause the price to rise.Every investor who wants to beat the market must master the skill of stock valuation. Essentially, stock valuation is a method of determining the Intrinsic value (or theoretical value) of a stock. The importance of valuing stocks evolves from the fact that the intrinsic value of a stock is not attached to its current price. By knowing a stock’s intrinsic value, an investor may determine whether the stock is over- or under-valued at its current market price.Valuing stocks is an extremely complicated process that can be generally viewed as a combination of both art and science. Investors may be overwhelmed by the amount of available information that can be potentially used in valuing stocks (company’s financials, newspapers, economic reports, stock reports, etc.).Types of Stock ValuationAbsoluteAbsolute stock valuation relies on the company’s fundamental information. The method generally involves the analysis of various financial information that can be found in or derived from a company’s financial statements. Many techniques of absolute stock valuation primarily investigate the company’s cash flows, dividends, and growth rates. Notable absolute stock valuation methods include the dividend discount model (DDM) and the discounted cash flow model (DCF).RelativeRelative stock valuation concerns the comparison of the investment with similar companies. The relative stock valuation method deals with the calculation of the key financial ratios of similar companies and derivation of the same ratio for the target company. The best example of relative stock valuation is comparable companies analysis.Dividend Discount Model (DDM)The dividend discount model is one of the basic techniques of absolute stock valuation. The DDM is based on the assumption that the company’s dividends represent the company’s cash flow to its shareholders.Essentially, the model states that the intrinsic value of the company’s stock price equals the present value of the company’s future dividends. Note that the dividend discount model is applicable only if a company distributes dividends regularly and the distribution is stable.Discounted Cash Flow Model (DCF)The discounted cash flow model is another popular method of absolute stock valuation. Under the DCF approach, the intrinsic value of a stock is calculated by discounting the company’s free cash flows to its present value.The main advantage of the DCF model is that it does not require any assumptions regarding the distribution of dividends. Thus, it is suitable for companies with unknown or unpredictable dividend distribution. However, the DCF model is sophisticated from a technical perspective.
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What is the right time to invest in the stock market?Indeed, with the Coronavirus pandemic, businesses may not be doing well especially with the lockdowns and interruption of supply chains. As you may be aware, stocks represent ownership interest in a company, which provides investors with the opportunity to make profits either through dividends or capital appreciation. the stock affects the investment of the shareholder. In other words, when the stock’s value decreases, the investment also loses its value.The continuous price decline has presented investors buying opportunities, since they can acquire the stocks more cheaply. However, the stocks might take a longer time to recover. Therefore, if you are buying into the stocks, do it for the long term. You have indicated that there are stocks you are looking to invest in. This means that you have a watch list. Watch lists help investors monitor and spot investing opportunities in the stock market.On the other hand, stocks whose prices have continuously been declining while its peers are stable or appreciating are a red flag. If you are interested in the stock, understand why the price has been declining and ask yourself what other investors are seeing that you’re not. Buy a stock whose price you think will improve after the crisis. A common mantra among investors is “buy low, sell high”. You should also look at the returns you stand to gain with the stock once the situation improves.The corona virus pandemic has rattled global economies and triggered an across-the-board sell-off in equities as an asset class. Since the first corona virus cases emerged in late 2019, global markets have sharply fallen. The Dow Jones Industrial Average (DJIA) and the S&P 500 ended their 11-year bull-run—the longest ever in history—as the S&P BSE Sensex and the Nifty 50, too, entered bear-market territory with a fall of over 30 per cent each. A fall of 20 per cent or more in a stock, or an index, is typically regarded as a bear phase for that traded unit.Another silver lining as regards valuation is that in previous cases of market crash such as the GFC, broader markets (mid-and small-caps) were in euphoric zone, analysts said. Currently, broader markets do not indicate any euphoria, as they have witnessed significant under-performance since the 2018 beginning.After making huge losses by trading myself I realized that I really need a mentor. so after a lot of research here and there I decided to study market by reading books wonder it was my right decision as I started getting good results as well as I learned where I went wrong. I have been taking their services since a very long time now. I would suggest everyone out there to find your mentor if you don't have enough knowledge of stock market.Are stocks the easiest way to build wealth?Here are six reasons why, if you've not invested in stocks yet, you will definitely want to start this year:Opportunity to own an existing business: When you buy a stock, you get to buy a stake in an already existing business with the huge advantage that business already has all its employees and infrastructure in place, and is already up and running. You straightaway get a claim on the businesses future profits (in your proportion of ownership) without any of the headache or effort involved in running it.No hassles of negotiations and brokerage: With stocks, the price is right there for you to see. No hassles of negotiating with the opposite party. The brokerage is usually pretty low too (usually a maximum of 0.5%). This helps ensure that a substantial part of your investment is not eaten up by frictional costs.Little money required: Think about this. Even if you plan to start a small grocery store in your neighborhood, you will have to stake a substantial amount of money on the success of just one venture that may or may not take off as planned. Compare this to buying a stake in a business in the stock market. You can get a piece of the action with even just a few hundred rupees, let alone lakhs and crores.The prospect of a higher return: One thing at the very core of choosing to run a business instead of investing your money in a bank fixed deposits the expectation of higher returns on your investment. Thus, businesses usually strive to earn returns much higher than your run-of-the- mill investments. The trick is to buy a stock that has shown that it can accomplish the above with reasonable certainty, and to buy it at a good price.Liquidity: Buying stocks, you instantly rid yourself of all the above problems. You can instantly buy and sell your stake in the business with a single phone call or a few clicks of your mouse.Sources of information on companiesOffer documents: One of the best sources for understanding a particular sector or industry is the offer document of the company, if one can get hold to one.BSE/NSE announcements and company press releases: Apart from annual reports, it is the official company documents such as press releases, announcements, and presentations which are released in regular intervals. The source for such information is the BSE or NSE websites and the company's website.Business dailies and other media: Newspapers and news channels are a great medium for gaining updates on companies. Interviews with managements provide good information on the company's views, plans and strategies.This is not the end of investing in equities. We have seen such situations many times in the last couple of decades. As regards the COVID-19, one now needs to monitor fresh cases in the US, Europe and India. Developments in these geographies will decide the markets trajectory from here. Typically, when the markets fall so fast, there is some support once they slip around 25 to 30 per cent from the peak—and that’s where we are right now in terms of current market. The biggest correction phase in history was around 60 per cent fall from the top in 2008 during the GFC. The corresponding level now works out to be around 6,000 on the Nifty, which should act as an absolute support base,” says U R Bhat, managing director at Dalton Capital.
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What is the best and safest way to invest and get good returns in India?In today’s world, earning money may not be enough to fulfil your financial goals and take your dreams towards fruition. Instead of letting your hard-earned money lie idle in your bank accounts, you may consider investing in investment options such as stocks, equities, mutual funds, Fixed Deposit.Types of Investments.Low-risk investments.Medium-risk investments.High-risk investments.Best Investment Options.Stocks – Buying shares of companies is a one time investment plan. It is one of the easiest ways to invest your money in any business. These are part ownership units of the company which each investor buys. You can trade these shares in a marketplace called the Stock market where all trades are done electronically. It is one of the most lucrative and riskiest investment options to buy.Fixed Deposit – These are the safest investment where you are assured fixed interest at fixed intervals of time. It provides options for investing and flexibility to pay. Fixed Deposit is offered by banks and NBFCs. Short term investment plans with Fixed Deposit can help you protect your funds against inflation.Mutual Funds – These are collective investment vehicles managed by a fund manager which pools people’s money and invests in stocks and bonds of various companies and create a return. They are in the same category of risk as stocks, though slightly less.SCSS –Senior Citizens’ Saving Scheme is an investment plan for those above the age of 60 years. It is a government sponsored, long-term saving option which has been designed keeping in mind the requirements of retirees. This investment option pays a high and steady rate of interest as prescribed the government from time to time.PPF – Public Provident Fund is one of the most common and trusted investment plans in India. It pays interest rate annually and requires a minimum of Rs 500 per annum investment. It has a life of 15 years with partial withdrawals allowed of the corpus at various points. This option also pays a high and steady rate of interest as prescribed the government from time to time.There are five key ways to double your money, which may include using a diversified portfolio or investing in speculative assets.Broadly, investing to double your money can be done safely over several years, or quickly, although there’s more of a risk of losing most or all of your money for those that are impatient.
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What are some tips for beginners at day trading?Day trading is also known as intraday trading and short-term trading, commits to buying and selling shares of a stock within a single trading day. So, between the time of the market open and close, you execute and square off your position.The goal of day trading is similar to just about any other method of trading or investing: to earn a profit. But the way that you approach that goal is a little different of day trading.For example, if you buy shares of a blue-chip company, you’re binding to a long-term relationship. This is a company you believe in or at least you believe their share price will increase. While in day trading, you don’t buy a company’s shares because you believe this company has what it takes. Also, you don’t plan to cling on for long.You choose stocks based on price volatility. The stock could be going up for a variety of reasons like big news, a new contract, or a new product. You hope to take advantage of short-term price fluctuations. On the other hand, you might short sell based on negative news that could cause fluctuations.Here is an overview of some helpful strategic tips:Determine Entry and Exit PricesTry to analyze the best entry point by understanding the supply and demand which are drastically out of balance and against the market.These are often determined by looking at a stock’s historical data. Once you plan your entry and exit, stick to it.Employ Stop Loss for Lower ImpactFor those who don't know, Stop loss is a trigger that is used to automatically sell the shares if the price falls below a specified limit.This is beneficial in limiting the potential loss for investors due to the fall in the stock prices. For investors who have used short-selling, stop loss reduces loss in case the price rises beyond their expectations.Book Your Profits When Target is ReachedIt is very normal for traders to feel fear or greed while doing Day Trading.It is important for traders to not only cut their losses but also to book their profits once the target price is reached. In case the individual thinks the stock has a more possibility of rising in price, the stop loss trigger must be readjusted to meet this expectation.Manage Risk-Reward RatioIt is important that you start trading only after developing a risk management strategy. This will ensure you only lose what you can afford.The most important lesson in day trading is to understand the risk-reward ratio. Every beginner trader should maintain the risk-reward ratio of 1:3.Stable Invested Capital Per TradeIt is important to never risk too much capital on one trade. Position size should be set as a percentage of the total day trading budget which might be anywhere from 2% to 10%, depending on the budget.If we exceed the decided percentage of position size, we might miss out on an even better opportunity in the market due to all available funds being tied up in one or two trades. Plus, the risk of loss is conceivably greater as the size of the position increases.Be Patient and DisciplinedDay trading requires patience. It is not necessary to trade everyday or all-day. If you don't see any opportunities that meet your criteria, you shouldn't be executing any trades that day even if you're sitting in front of your computer, and totally into the market. That is way better than going against your understanding, out of an impatient desire to do something.Discipline is essential to achieve consistent trading results. Beginners need to set a trading plan and stick to it.Never Stop LearningYou should always study to trade smarter. You need to stay up-to-date with the news, read appropriate trading books, and stay tuned into developing circles. Always remember, markets evolve and you need to evolve right along with them.Lead With FactsMake sure your strategy is based on, supported, and backtested with facts. Humans are so emotion-driven. So, one should always beware of his/her mindset.Your decision-making processes should always be reliable on facts and figures.Manage a Trade JournalYou should keep a record of all your previous trades from entry and exit to price and volume. You can use this information to identify problems and improve your strategy.This will allow you to make intelligent decisions in the future.Learn From ExperienceTraders shouldn’t second-guess themselves, once the trading analysis is done and the trade is placed, even if it goes against them.Every day trader experiences loss, so it’s ok when the particular trade doesn’t pan out, especially for a beginning day trader. Traders should evaluate the trade to confirm that they followed their own established day trading rules and that they didn’t get in or out at the wrong time.Wish you luck with your trading journey!
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Would you suggest intraday trading for a beginner?Intraday Trading means the position that is taken when the market is opened and the same position that is squared off when the market closes down.Intraday Trading is also known as “Day Trading”Intraday Trading offers you high range of returns but with that it also associate high percentage of risk.For intraday trading, one should do his analysis properly after that only they should make trades in intraday.See, there isnt’t any criteria whether it is good or not but if the particular individuals has done his proper analysis or is taking full guidance about the intraday trading from the experts with full knowledge about its rewards and its risk. Then, the individual is qualified to start intraday trading.If the beginner is qualified and well aware of the risk and reward associated with intraday trading, you may start trading.It completely depends on the beginner whether he/she is ready to start or not.Let us discuss about some important points for Intraday for beginners if they have chosen intraday trading.Important Pointers for Beginners to know about Intraday TradingAn intraday trade order entitles you to higher leverage that means you’ll be able to pay a little margin and take an oversized open position.You need to select intraday trade when putting in the order.Ideally you should figure out the stop loss and exit point before entering the trade.When you are leveraged in an intraday trade, keep in mind that it works both ways. If your profits can multiply, so can your losses.Thus stop losses are vital while trading in intraday.As a trader, you need to make sure that any open position is closed before market ends. If you keep it open, then your broker can mechanically shut all open positions after 3:00 P.M at market value.Take responsibility of making sure positions are closed at the end of the dayIntraday trading isn’t always profitable. You will face losses as well. You are trading in span of five hours, movement might now be favorable and could trigger your SL.What matters in intraday trading isn't profit or loss every single day. Whether you are profitable or not in long run.Intraday trading is best done by reading charts. Technical is a big part of intraday.Straightforward charts are enough to change you to trading. You don't need to be professional but you need to decode the charts.Select the stocks only after verifying and doing their historical research.You should know your entry point, exit point and also the stop loss of every trade you made.Follow the market trend and understand the market closely.How should Beginners start their Intraday Trading?Start your day trading small. Increase your order size and order book step by step as you become experienced.Never take a risk more than your risk appetite. If you do, any reversal can end your journey before it even started.Begin with small, take calculated risks and step by step proportion.Stick to your strategy.Before you get into a trade, figure out the framework. Confirm your entry point, your exit point and stop loss.Once strategy is in place, you need to have the discipline to follow it strictly.Keep your losses as minimal as possible. Your risk to reward ratio has to be positive.In intraday trading, smartness lies in cutting your losses quickly once you notice the trade going against you.The market may be a nice teacher and in intraday trading you need to be humble enough to treat the market as your teacher and learn.These are the points which beginners should never forget. I have tried to explain it as simply as I can. You need to make a informed decision after considering all aspects.
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In which Indian company's stock should I invest for a long term?Investors often want to invest in the long term so that their money grows with time. But identifying which stock will deliver good results, which underlying company will have a sustainable business model has always been an issue.Another question that may arise in your mind is how long exactly is long term?It can be subjective. As an investor, you should look at the fundamentals of the company and think which stock will give you good returns in a substantial amount of time.Each trader needs to have a trading routine to find the perfect trading strategy that works for them. If you as a trader take your time on the front end to plan things out and ask yourself the right questions, then There is extreme volatility in the stock market at present. Some stocks are trading at all-time highs and others at decade lows. Economic logic suggests a product is an attractive buy if it is available at a discount. There are a number of stocks going dirt cheap right now. For example, Yes Bank is quoting at Rs 30, compared to its all-time high of Rs 404 around a year back. If you widen your search to include mid- and small-cap counters, you will find a large number of stocks going for 90% less than their peak prices. Should you buy stocks quoting at significant discounts to all-time highs? Experts advise caution. You could well be trying to catch a falling knife.Titan Company LimitedTitan Company Limited is a subsidiary of the Tata group. Titan is the fifth largest integrated watch manufacturer in the world.We are all well aware of its product ‘Sonata’, which is one of the most reputed watch brands.This brand also came up with FastTrack, one of the most popular and trending watch brand. Titan also launched ‘Tanishq’, India’s most trusted and leading jewelry brand.This company has no debt recorded in its book. Also, the return on equity has been on the higher side of the company.NMDCNMDC has been on the receiving end ever since Karnataka decided to withdraw its letter of lease renewal for the Donimalai mining block. However, investors can have a sigh of relief now because the government of India has amended the Mineral Rules 2015 and this makes sure the state government renews the mining lease of a government company. In addition to the resumption of production from Donimalai mine (EPS may go up by around 15% because of this resumption), this amendment als ..Housing Finance Companies / NBFC:My next bet is on Housing Finance Companies for Long Term Investment. as i mentioned in the previous post. The reason for selection of Housing Finance Company is that their balance sheets are cleaner compared to banks. According to recent reports, the NPA’s of banks are much higher than what is being reported. It can be as high as 13%. On the other hand, NPA’s of most of the Housing Finance Companies are less than 1% which means they are better managed. For Long Term Investment, i considered IndiaBulls Housing Finance and DHFL. Most of the analysts are more Bullish on these 2 HFC’s along with LIC Housing Finance. In my analysis, i found IndiaBulls Housing Finance more promising and growth potential is HIGH. Another reason was the inclusion of IndiaBulls Housing Finance in MSCI ACWI Value Index. It brings additional funds of approx RS 15 Mn to the stock.Kotak Mahindra BankKotak Mahindra bank has earned its position in the top banks in India, though being much younger than many other banks. Kotak Mahindra has delivered phenomenal growth, starting from its inception in 2003. This bank is the third largest bank in terms of market capitalization after HDFC and ICICI.Pidilite IndustriesPidilite Industries Limited is the manufacturer of the famous product ‘Fevicol’. They are the market leaders in the adhesive segment.The brand value and brand equity associated with Fevicol is very high and hence, there are only a few substitutes in the market.Sun PharmaThe next stock is also for pharmaceutical space – Sun Pharma. Sun Pharma is the manufacturer of drugs for diabetes, cardiology, neurology etc. After the acquisition of Ranbaxy, Sun Pharma has become world’s 5th Largest generic pharmaceutical company.Indusind BankDiversification always helps the investor in mitigating risk. Keeping this thought in mind next stock pick for long term investment is from banking sector – Indusind Bank. Indusind Bank is one of the leading private sector bank of India.Asian PaintsAsian paints is next stock in the list. Asian Paints deals in wide range of paints, varnishes and synthetic resins. The company also produce special type of chemical and latex products. Asian paints is holding a major share in the domestic color market.UltraTech CementUltraTech Cement is next stock pick for the long term investment. UltraTech cement is leading cement manufacturer in India. UltraTech is also one of the largest exporters of cement clinker. It is part of Aditya Birla Group.Aurobindo PharmaAurobindo Pharma features among the top 10 companies in India in terms of consolidated revenues. Aurobindo exports to over 125 countries across the globe with more than 70% of its revenues derived out of international operations.Larsen & ToubroLarsen & Toubro Limited, commonly known as L&T Limited is an Indian multinational conglomerate company headquartered in Mumbai, Maharashtra, India. . The company has business interests in basic and heavy engineering, construction, realty, manufacturing of capital goods, information technology, and financial services. As at March 31, 2018, L&T Group comprises 93 subsidiaries, 8 associates, 34 joint-venture and 33 joint operations companies.
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How do I successfully pick stocks?Which stocks you trade is going to depend on a number of issues, including your level of experience, how much capital you have available, and what style of trading you are doing. Whether you are trying to find the best stock for day trading, or you prefer other styles like swing trading, position trading or investing, your criteria for how to pick stocks should be written down as part of a trading plan. Your trading plan is dynamic, and, thus, will evolve as you continue to learn and uncover your strengths and weaknesses.Here are a few things to consider before you pick stocks:Understand your level of risk and decide what is appropriate.No Matter your personality, develop a smart strategy for choosing stocks to invest in.Start by picking one stock and then analyze the results.Use trading charts to understand movement of stocks and the overall market.Finally, stick with your plan.Determine Your GoalsThe first step to picking investments is determining the purpose of your portfolio. Everyone's purpose for investing is to make money, but investors may be focused on generating an income supplement during retirement, on preserving their wealth, or on capital appreciation.Three Types of InvestorsIncome oriented investors focus on buying stocks in companies that pay good dividends regularly. These tend to be solid but low-growth companies in sectors such as utilities. Other options include highly-rated bonds, real estate investment trusts Investors who aim at wealth preservation have a low tolerance for risk, by nature or because of their circumstances. They prefer to invest in stable blue-chip corporations. They might zero in on consumer staples, the companies that do well in good times and bad. They do not chase initial public offerings.Investors who are looking for capital appreciation are looking for the stocks of companies that are in their best early growth years. They are willing to take a higher degree of risk for the chance of big gains.The Diversified PortfolioAny of these investor types might use a combination of the above strategies. In fact, that's one of the prime motives of diversification. A conservative investor can devote a small portion of a portfolio to growth stocks. A more aggressive investor should earmark a percentage for solid blue-chip stocks to offset any losses.Control your anxiety.One should keep one's anxiety in check while chasing stocks for rumour and speculative news. Do not rush to buy a stock based on such buzz without properly checking the valuation for such new developments, Chokkalingam added. Once the trade is executed, it cannot be reversed for the mistake made on valuation. It is better to let go the "opportunity", which seems to have been created by rumour and speculations, rather than burn your savings, he tells.The stock-picking process involves identifying companies. There are three simple ways to do it.Find the exchange-traded funds which track the performance of the industry that interests you and check out the stocks they're investing in. This is as easy as searching for "Industry X ETF." The official ETF page will disclose the fund's top holdings.Use a screener to filter stocks based on specific criteria, such as sector and industry. Screeners offer users additional features such as the ability to sort companies based on market cap, dividend yield, and other useful investment metrics.Search the blogosphere, stock analysis articles, and financial news releases for news and commentary on companies in the investment space you've targeted. Remember, be critical of everything you read and analyze both sides of the argument.
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How easy is it to get rich by investing in stocks?If you follow the right path, It is straightforward. One of the exciting things about investing is that it only takes one excellent investment, held for a long time, to change your family's destiny forever.Here are 9 of the most proven tips for reaching your goals:-Focus on Hot Stocks Hitting New HighsAs you get started with your stock market dreams, make sure to focus on hot stocks. Do your research, look into their patterns, and place your focus on stocks that are already growing as you plan to stick with them until they reach new heights. Do not look to stocks hitting new lows.You Can Buy and Short SellSome people think they need a bull market to get rich. This isn't the case. Don't ignore short selling.Cut Your Losses QuicklyIf you want to be successful in the market, take your ego entirely out of the situation. If you face a setback, cut your losses, and move on fast.Don't Be Afraid to Take Partial or All ProfitsThe thing about your earnings is that they don't really profit until you take them.Embrace New TechnologiesThe world is changing and it is changing fast, so you need to be changing with it if you want to be successful in the stock market. Now is not a time to be afraid of technology companies.Stick With Liquid Stocks (Most Active)If you want to earn some serious income, then it is best to stick to liquid, highly traded stocks.Don't Believe Anything the Stock SaysIn the trading world, talk is cheap. Don't listen to promises or hype; look only on the action of the stock.You Don't Need to Buy Bottom, Sell TopSo many new traders are focused on the adage that you need to buy right at the bottom and sell right at the Top. Yes, it would be nice if you could as that would mean the most profits possible,Always Make a PlanIf you want to indeed find long-term success in the stock market, the best thing you can do is to go into every trade with a particular plan.
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Which 5 stocks in India have the potential to grow 1000 times in 10 to 15 years time to buy in 2020?After analyzing over 100 stocks which can get us amazing returns once we are out of this Corona virus pandemic!There are few stocks can get up to 1000 times returns.Reliance: As we see recent deals in JIO and Facebook, the stock has given returns of 10% within a week. As soon as Jio IPO will be in market the stock will be a multibagger.Sunpharma: As we see now India and rest of the world will be focusing on medication the stock looks good for some great returns in Nearby future.Dmart: As we see rising population in India, we may see dmart will be a future multibagger with returns of 100% within 5–10 years.IRCTC: With government increasing spending's in railways sector, and introduction of new trains this stock can give 1000% returns within 5–10 years.These are the 4 stocks according to me can give Multibagger returns in future.
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What are some stocks that are going to be multibaggers in 2020?No one knows before hand what stock will turn out to be a multibagger.Radhakrishan Damani, saw four of his top five bets bleed profusely. D-Mart gained 15.56 per cent for the year, but Delta Corp, India Cements, Food & Inns and Advani Hotels all declined between 17 & 21 %US-based investor Mohnish Pabrai, with a portfolio worth Rs 2,000 crore, saw his holding in Sunteck Realty rise 19.19 %. But other stocks in his portfolio such as Rain Industries, Kaveri Seed, Edelweiss Financial and Kolte-Patil Developers fell up to 40%.Value investor Anil Kumar Goel – often referred to as the Sugar Baron – saw his holdings like Dhampur Mills, Triveni Engineering, Dwarikesh Sugar work for him, rallying 48-62 %. Another holding, KRBL, stayed flat.Vijay Kedia had a good year, with four of his top five holdings performing well. The list included Sudarshan Chemicals (up 19 per cent), Vaibhav Chemicals (14.52 per cent), Cera Ceramics (up 13.68 per cent) and Repro India (up 1.24 per cent). This was when midcap and smallcap indices ended lower for the year.Among his recent investments, Kedia purchased 10 lakh shares in JMC Projects on August 30 and 2.5 lakh shares in Neuland Laboratories on September 27.Chennai-based Dolly Khanna, known for her stock selection in manufacturing, textile, chemicals and sugar segments, saw three of her popular stocks -- Rain Industries, NOCIL and Nilkamal – fall between 12 and 26 per cent.Porinju Veliyath of Equity Intelligence India had exposure to 12 stocks and a networth of over Rs 26.6 crore. Four of these holdings -- Archies, Emkay Global, Praxis Home Retail and Kaya – fell 37-52 per cent last year. Shalimar Paints, another major portfolio, gained 12.16 per cent for the year.Ashish Kacholia had DFM Foods, Vaibhav Global and NIIT working for him. His top holding, NOCIL, did not do well.Big Bull Rakesh Jhunjhunwala, major investments are in Titan Company, in which his holding is valued at Rs 6,943.4 crore, followed by Crisil, Escorts, Lupin and Federal Bank. In 2019, while Titan and CRISIL gained 28 per cent and 20 per cent, respectively, Escorts, Lupin and Federal Bank did not deliver.Few investments made on his wife’s name (Rekha Jhunjhunwala), too, had bad times, as her key holdings NCC, Delta Corp and TV18 Broadcast all bled.From these excerpts it is crystal clear that no one knows before hand what will turn out in future. The whole point of finding a multibagger, is you make investments in 5–7 stocks in sound businesses, wherein there is lot of potential for growth along with good corporate governance and strong financials.Over the period you need to weed out the losers and keep adding on the winners. That's how an investment turns out as a multibagger, eventually only 2–3 will outshine, however the gains from these 2–3 will make more than the losers (provided you cut them off well within time).And multibaggers happen over time not just in a year. It is a patience game as well.
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What is the shocking secret of Ratan Tata?1. 65% of his earnings goes to Charity: Ratan Tata couldn’t place himself in the billionaire list because a large amount goes in the charitable trusts ( around 65% of his earnings). He is one of the most generous person in India. Salute to his great work.2. Donates every year for education: Ratan Tata is very known widely for his donation activities in the country and he also donates a huge amount in the education sector. He gave $50 million to Harvard Business school and $25 million to Cornell University, specially for the Indian students.3. Parents got separated: In the year 1940, Ratan Tata’s parents got separated and at that time he was just a 3-year old kid. After that he was looked after by his grandmother.4. IBM offer: When Ratan Tata completed his education, he got a job offer from IBM but he refused to take that job and joined his family business.5. Education: Ratan Tata studied in best school and colleges, he went for schooling at Cathedral and John Connon School and before that he went to Bishop Cotton School at Shimla and also to Campion School Bombay. He went to famous colleges like Cornell University, New York for architecture and Harvard Business School.6. Trained pilot: Ratan Tata is a trained pilot and he enjoys flying, he flew the F-16 Falcon in the year 2007 and was the first Indian to do so.7. Gave Worldwide recognition to Tata Group: Tata is running 96 businesses today and out of it 28 are listed on various stock exchanges. He made his company a global business and has acquired Jaguar, Land Rover, Corus and Tetley. All thanks to Ratan Tata.8. Ratan Naval Tata first job: Ratan Tata’s first job was at the Tata Steel which he took up in the year 1961. His first responsibility was to manage the blast furnace and shovel limestone.
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Who are India's best stock traders?IF you write the same question on Google answer will come to Rakesh Jhunjhunwala, Vijay Kedia, Porinju Veliyath,etc. while someone wrote also on Radhakishan Damani, Ramesh Damani, and Raamdeo Agrawal all are wrong because they are investors not traders.Below are the top successful stock traders in India which I picked from reading many stories of traders.1 Tasneem MithaiwalaA single mother of two daughters who is pursuing professional courses, Tasneem picked up trading because that was the only thing she could do by sitting at home and taking care of her ailing mother.The first woman successful trader in India is an example of what a strong mind can achieve. An Arts student who doesn’t have any financial knowledge and financial background, Tasneem today trade options successively for a living.While Tasneem looking for opportunities to work from home one of her cousin said that he was doing trading in equity markets and he guided her explore equity trading opportunities. At that time her cousin would give her trades or leads and she does buy and sell according to his suggestions.She was an art student so she won't have any financial background despite that her discipline and focus on trading given more success in trading. She started her ‘trading’ journey with a capital of Rs 5 lakh and by the end of 8 months, She found that the capital had come down to Rs 1.75 lakh. After that, she realizes that for trading need financial knowledge and she understates stock traders' behavior and become successful traders.More than the strategy she trades, Tasneem’s story is about mental strength and discipline and is an inspiration to all those traders who are unable to find their moto.What did we learn from Tasneem Mithaiwala?Never depends blindly on someone else and before doing trading get some financial knowledge and trading knowledge.2. Kirubakaran RajendranKirubakaran Rajendran from Chennai developed Trading Bots which we can say automated trading system which generates trades automatically using a given set of rules to do his trading. His current lifestyle was achieved after years of hard work and learning from every possible mistake one can do and probably more.His work is over by 10 am, after which he sits and reads a journal or a book or watches the TV series – Billions. At the end of the day, the trader goes to the gym. Fridays are compulsorily meant for friends, and he takes about 2-3 road trips with his family and friends in a year.Kirubakaran Rajendran started his job in Infosys with a salary of Rs 15000 per month. A day before Infosys' results he had built a position of Rs. 1.5 lakh in Infosys strangles because of this he could not sleep that day with such a huge position. The next day, results were announced before market hours and when Infosys opened that morning, the value of his strangles had come down to Rs 20,000. He had lost more than 3 months of his salary in a single day. Lessons are never do trades in news base stocks because next day anything can happen we don’t know.This was a big lesson for him in trading career and he understands that rather than running away from the market he started reading and researching what makes a successful trader click. This is when he decided to move from news-based trade to rule-based trade.The second mistake he made in trading he borrowed money to trade in the market. Which most of the new traders doing currently.Advice from Kirubakaran Rajendran for new TradersFor an aspiring trader, he would say always have a clear set of simple rules. Do not trade if you cannot explain in two lines. The more you complicate, the less likely the strategy would work.People generally go for strategies that give higher returns without looking at the drawdowns. For example, if a strategy gives a return of 40 percent per annum with a drawdown of 15 percent, it is certainly better than a strategy giving 90 percent returns but having drawdowns of 40-45 percent. Chose the ones where risk is lower.3. Abhinand BasavarajAbhinand Basavaraj, 29, hails from Mysuru and is almost a hermit in the trading world. A self-taught trader his first trade was at the age of 19. But it was only after seven years of agonising work that he found his mojo.He entered into the stock market at the age of 19 with his cousin who was taken the franchise of broking. He borrowed money from the father to open a Demat account. He started trading the same way other trades do front line stocks like Reliance Industries and HDFC Bank and at that time he was not following any trading strategies and he made a loss. He was one of the traders who lost money in Satyam scam. After this, he turned stock to options for trading and he didn’t tell his father also that he was lost his money. For financial support, he took help from a brother who was a banker but again he made a huge loss and he decided to stop trading for some time. After some time he started learning about technical analysis and understand how trading works and financial knowledge. He borrowed money also for trading with the high cost and he decided to tell all stories to his father. At that time his father one of the major backbone to give the confidence to go forward.After that, he joined his brother real estate startup and continue trading with business. He trades in the Nifty option and specifically more on buy-side. He using many technical strategies like trend line or MACD, etc.Persistence, self-confidence and family support all played an important part in his success. Though he still claims to be an evolving trader, few can claim to have achieved the kind of success that Basavaraj has.Lessons from Abhinand BasavarajFirst learn about stock market than create own strategy and never take loan for trading plus always shared to someone who knows you better.4.Naresh NambisanNambisan is from the old school of trading where he prefers putting in manual effort rather than automating it. Obsessed with charts, he can look at charts for hours without getting bored. And, when he is not looking at them, he likes to read and travel.His wife was a software engineer in Bangalore and he had experience in both India and Gulf so he transferred from the gulf to India for the job. When he came to India he found that getting jobs in India was difficult and Gulf experience not worked in India. During this time he connected with his friends and he came to know about technical analysis so for that he Google a about technical analysis. For more knowledge, he joined the Yahoo group also for technical analysis but on that group, only trading calls are coming to no knowledge he getting from that. In 2008 he was also doing trading and lost 40000 Rs. So from that, he learned Never depends on other no doubt he earned a good amount from that group so to become independent traders he taking out information about technical analysis form Google and YouTube. After some time he understands price chart strategy and he liked it. Today also he working on the same strategy for trading.Currently, Naresh Nambisan living in the village and doing trading.Advice from Naresh NambisanKeep your trading as simple as possible. Do not complicate the charts with too many indicators. Try to eliminate what is not needed. Looking at every data point like open interest, FII and DII buying and selling data do not work.Test the indicators yourself. Improve yourself one step at a time. Take up your system and sharpen it by looking inside the system and correcting it rather than jumping to a new one if the earlier one did not work on a few occasions. Trust your chart. Baaki sab is bakwaas (rest all is rubbish).Lessons from Naresh NambisanNever depends on others and create own strategy5. Madan KumarMadan Kumar born and brought up in a middle-class family when he was in school his teacher insulted him because his family not paid fees. Madan Kumar's mother always an inspiration to his mother knows only education can remove poverty. Madan Kumar completed B.Tech from Madras and moved to the US for post-graduation. He was also got a job in the US which was work from home so he gets a good time to learn about trading.Madan Kumar one of the good things I liked he read many books for the market and then be gone for trading.“He tells his friends who want to be traders that if they do not have a supportive spouse do not be a trader,” he says.Full-time trader and a successful one at that, Madan Kumar has a rags-to-riches tale to tell. And he credits his success to his mother and wife for each of them had a large part to play. His mother because she instilled an inclination towards education and his wife as she supported his family financially when he returned to India from the US.
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