Tag: investors

VWAP INDICATOR
DEFINITION:

“Volume Weighted Average Price (VWAP) is a technical analysis tool used to measure the average price weighted by Volume. VWAP is typically used with intraday charts as away to determine the general direction of intraday prices. VWAP is similar to a moving average in that when price is above VWAP, prices are rising & when price is below VWAP, prices are falling VWAP is primarily used by technical analysts to identify market trend.”

Full form of VWAP is Volume Weight Average Price. The average price weighted by volume. VWAP is a trading tool calculated by taking the number of shares bought times the share price & dividing by total shares.

Volume Weighted Average Price is an Indicator, or used for Intraday trading. VWAP equals the dollar value of all trading periods divided by the total trading volume of the current day.

The VWAP appears as a single line on intraday chart (1min,5min,15min & so on), similar to how a moving average looks. The calculation starts when trading opens & when it closes. Because it is good for the current trading day only , intraday periods & data are used in the calculation.

HOW TO CALCULATE VWAP:

VWAP is calculated through the following steps:
1. For each period, calculate the typical price, which is equal to the sum of the high, low, and close price divided by three [(H+L+C)/3]. One bar or candlestick is equal to one period. What this period is set at is up to the trader’s discretion (e.g., 5-minute, 30-minute, etc.).
2. Take the typical price (TP) and multiply by the volume (V), giving a value TP*V.
3. Keep a running tabulation of the TP*V totals as well as a running tally of volume totals. These are additive and aggregate over the course of the day.
4. VWAP is calculated by the formula: cumulative TP*V / cumulative volume
This calculation, when run on every period, will produce a volume weighted average price for each data point. This information will be overlaid on the price chart and form a line, similar to the first image in this article.

Moving VWAP is simply adding up various end-of-day VWAP figures and averaging them out over a user-specified number of periods.

VWAP will be calculated automatically in one’s charting software. There should be no mathematical or numerical variables that need adjustment. On the moving VWAP indicator, one will need to set the desired number of periods.

HOW TO ANALYSIS VWAP:

VWAP initiate at the opening price level, & will move up or down with price movement & volume as the session continues. It can help to eliminate a lot of the noise within a stock throughout the day, even more so than a moving average would. It is compared at time to a moving average, & though it shares similarities, they are not the same.

It’s said when price is below the indicators, the stock is in downtrend or there is a downtrend bias to the day and when price is above the indicator, the stock is a uptrend.

Find the average price the stock traded at over the first five-minute period of the day. To do this, add the high, low, and close, then divide by three. Multiply this by the volume for that period. Record the result in a spreadsheet, under column PV.

Divide PV by the volume for that period. This will give the VWAP value.

To maintain the VWAP value throughout the day, continue to add the PV value from each period to the prior values. Divide this total by total volume up to that point. To make this easier in a spreadsheet, create columns for cumulative PV and cumulative volume. Both these cumulative values are divided by each other to produce VWAP.

VWAP Pullback Entry:

Entry Option 1 – Aggressive Traders

Wait for a break of the VWAP and then look at the tape action on the time and sales.

You will need to identify when the selling pressure is spiking, and the tape is going crazy.

This, my friend, is more art than science and will require you to practice reading the tape.

The goal is to identify when the selling pressure is likely to subside and then enter the trade.

This approach will break most entry rules found on the web of simply buying on the test of the VWAP. The problem with this approach is you don’t know if the price will breach the VWAP by 1% or 4%.

I learned the hard way, and if the VWAP were at $10, I would place my limit order at $10. At times there were traders who couldn’t care less about the VWAP, and it would slice through the indicator with such swiftness, the lasting sting to my psyche persists until this day.

This technique of using the tape is not easy to illustrate looking at the end of day chart. You will need to practice this approach using Tradingsim to assess how close you can come to calling the turning point based on order flow.

VWAP Breakout Entry:

Entry Option 2 – Risk Averse Traders

This is what I would recommend to traders that are new to the VWAP indicator.

Essentially, you wait for the stock to test the VWAP to the downside. Next, you will want to look for the stock to close above the VWAP.

You will then place your buy order above the high of the candle that closed above the VWAP.

While this is a more conservative approach for trade entry, it will open you up to more risk as you will likely be a few percentage points off the low.

You will need to determine where you are in your trading journey and your appetite for risk to assess which entry option works best for you.

It goes without saying that while we have covered long trades; these trading rules apply for short trades, just do the inverse.
1 June, 2019
WHAT IS PUT CALL RATIO
DEFINITION:

“The ratio of the volume of put options traded to the volume of call options traded, which is used as an indicator sentiment (bullish or bearish).”
Put-call ratio (PCR) is an indicator that forecast the trend of the INDEX/STOCKS.

A “Put” or put option is a right to sell an asset at a predetermined price. A “Call” or call option is right to buy an asset at a predetermined price. Many traders use options for directional beta; buying call when market bullish & buying put when market bearish.

PCR is a popular derivative indicator, specifically designed to help traders gauges the overall sentiment of the market. The ratio is calculated either on the basis of options trading volumes or on the basis of the open interest for a particular period.

This indicator will show you which gang is dominating the market; the bearish gang (short masters), or the bullish gang (long masters).

The put call ratio can be calculated for any individual stock, as well as for any INDEX, or can be aggregated.

HOW TO ANALYSES PCR:

The put call ratio is calculated by the dividing the number of OPEN INEREST of put option by the number of OPEN INEREST of call option.

PCR (OI) = PUT OPEN INTEREST ON GIVEN DAY/ CALL OPEN INTEREST ON SAME DAY:

PCR for marker wide position can be also be calculated by taking total number of OI for all OI call options & for all OI options in a given series.The PCR can be calculated for indices, indivu

Eg.

PUT (OI) CALL (OI)

CURRENT MONTH CURRENT MONTH
NEXT MONTH NEXT MONTH
FAR MONTH FAR MONTH

PCR = PUT (OI)/ CALL (OI)
PCR = ?
- A rising put-call ratio, or a ratio greater than .7 or exceeding 1, means that equity traders are buying more puts than calls. It suggests that bearish sentiment is building in the market. Investors are either speculating that the market will move lower or are hedging their portfolios in case there is a sell-off.
- A falling put-call ratio, or below .7 and approaching .5, is considered a bullish indicator. It means more calls are being bought versus puts.
Also Read | What is Index?
1 May, 2019
DIFFERENCE IN TRADING A/C & DEMAT A/C

TRADING A/C

A trading account can be any investment account containing securities, cash or other holdings. Most commonly, trading account refers to a day trader’s primary account. These investors tend to buy and sell assets frequently, often within the same trading session, and their accounts are subject to special regulation as a result. The assets held in a trading account are separated from others that may be part of a long-term buy and hold strategy.

DEFINITION

The account which is prepared to determine the gross profit or gross loss of a business concern is called trading account.

DEMAT A/C

Demat account or dematerialised account is an account that holds the shares and securities of an individual in an electronic form. When an individual indulges in trading or investing in shares or securities all the transactions are done through the DA. To put it another way, just like the banks hold the money of the individuals. Similarly, the DA holds the shares and securities of the individual in the account.

https://www.youtube.com/watch?v=uwWbBq4mL4o

DIFFERENCE BETWEEN TRADIN A/C & DEMAT A/C

1. The functionality of a Demat Vs a Trading Account

One major difference between the two accounts pertains to the functions each performs. A trading account is used for the buying and selling of the securities by means of it getting debited from your demat account and sold in the market.

A demat account, on the other hand, allows investors to keep their financial instruments in an electronic format. This also works in a way where you can change your electronic format securities into physical form as well.

2. BENEFITS of using DEMAT A/C & TRADING A/C

DEMAT A/C-

In the demat account, all the shares and securities are held in electronic form. There is no paper work at all. Thus, it reduces the risk of theft, wrong delivery of shares, etc. In addition, any company related activity like a stock split, bonus etc. are credited to the demat account.

Before demat account, trading of shares was done in lots. However, after demat account, this problem no more exists. Now the shares can be transacted in any numbers. All the transactions in the DA are automatically updated. The DA holds all the details of the account holders like address, name, time of the transaction, etc. So the companies always have details of all the transactions. The biggest benefit of demat account is that it acts like a bank and holds not only shares in the account. In fact debt instruments like bonds, etc. can be held in a single account.

TRADING A/C –

The moment you open a trading account, you get access to different kinds of stock exchanges that are there in the country. This will help you to make your investments better and stronger and of course you will have more options to explore. You can personalize your account, like set alerts and notifications as per your requirement with an online trading account. You will also enjoy the benefit of accessing your account from any media and any device.

HOW TO OPEN DEMAT A/C & TRADING A/C

OPENING DEMAT A/C

Step 1: To open a demat account; you have to approach a depository participant (DP), an agent of depository, and fill up an account opening form. The list of DPs is available in the websites of depositories: CDSL (Central Depository Services (India) Ltd) and NSDL (National Securities Depository Ltd).

Step 2: Along with the account opening form, you must enclose photocopies of some documents for proof of identity and proof of address.

Step 3: You will have to sign an agreement with DP in the depository prescribed standard format, which gives details of rights and duties of investor and DP. You are entitled to receive a copy of the agreement and schedule of charges for future reference.

Step 4: The DP will then open an account and give you the demat account number. This is also called beneficial owner identification number (BO ID). All your purchases / investments in securities will be credited to this account. If you sell your securities, your demat account will be debited.

OPENING trading a/c

Step 1: Begin with selecting a Broker or a firm.

Step 2: Make sure to make a comparative study of the brokerage rates and the services included.

Step 3: Contact the shortlisted broker for opening your account.

Step 4: Fill an account opening form that also requires you to provide KYC details. Along with your ID and address proof submit this.

Step 5: Undergo an application verification process.

Step 6: Get the details of your trading account.

Step 7: Start Trading.

28 April, 2019
What Is A Stock & Why To Invest In It
DEFINITION:

“A stock is a general term used to describe the ownership certificates of any company. A share, on the other hand reffers to the stock certificate of particular company . Holding a particular company’s share makes you a shareholder.”

The stock (also capital stock) of a corporation is all of the shares into which ownership of the corporation is divided. In American English, the shares are company known as “stocks”.

A stock is an investment. When you purchase a company’s stock, you’re purchasing a small piece of that company called a share.

A stock is a type of investment that represents an ownership share in a company. Investors buy stocks that they think will go up in value over time.

A share of company held by an individual or group. Corporations raise capital by issuing stocks & entitle the stock owners (shareholders) to partial ownership of the corporation. Stocks are bought & sold on what is called an Exchange. There are several types of stocks & the two most typical forms are preferred stock & common stock.

Owning a stock gives you certain rights & those rights can differ depending on the types of stock you own.

There are two main types of stock:
1. COMMON STOCK
2. PREFERRED STOCK
1. COMMON STOCK:

Common stock is a form of corporate equity ownership. It being primarily used in the united states. They are known as equity shares or ordinary shares in the UK.Common stock comes with voting rights; as well as the possibility of dividends & capital appreciation.
Each share of common stock represents a share of ownership in a company. If a company does well or the value of its assets increases, common stock can go up in value. On the other hand, if a company is doing poorly, a common stock can decrease in value. Simply put, common stock allows investors to share in a company’s success over time, which is why they can make great long-term investments.

2. PREFERRED STOCK

“Preferred stock is also known as preference stock. The word “Preferred” refers to the dividends paid by the corporation. Each year, the holders of the preferred stock are to receive their dividends before the common shareholders are to receive any dividend”.Preferred stockholders generally do not have voting rights, though they have a higher claim on assets & earnings that the common stockholders.

Preferred shares can be converted to a fixed number of common shares, but common shares don’t have this benefit.Like bonds, preferred stocks are rated by the major credit rating companies. The rating for preferred stocks is generally lower than for bonds because preferred dividends do not carry the same guarantees as interest payments from bonds & because preferred stock holders claims are junior to those of all creditors.

Some things you need to know about stocks:

a. P/E RATIO –

The price to earnings ratio (P/E ratio) is the ratio for valuing a company that measures its currents share price relative to its pre share earnings (EPS)…. P/E ratios are used by investors & analysts to determine the relative value of a company’s shares in an apple to apples comparison.The ratio is used for valuing companies & to find out whether they are overvalued or undervalued.Earnings are important when valuing company’s stock because investors want to know how profitable a company is & how profitable it will be in the future.

b. CHART –

Chart reading is the single most important investing skill you’ll ever learn. To understand why stock chart are so valuable. Chart tells you a whole story about stocks. The weekly chart helps you see longer term trends. And daily chart helps you spot specific buy & sell signals while daily price fluctuation perspective.

c. Dividend –

If you don’t have time watch the market every day, and you want your stocks to make money without that kind of attention, look for dividends. Dividends are like interest in a savings account. You get paid regardless of the stock price. Dividends of 6% or more are not unheard of in high quality stocks. Before purchasing a stock, look for the dividend rate. If you simply want to park money in the market, invest in stocks with a high dividend. (For more, see Why Dividends Matter.)

d. Taxes Can Take A Bite Out Of Your Profits –

The FANG stocks – Facebook FB +0%, Amazon.com AMZN +0%, Netflix NFLX +0% and Google GOOGL +0% (Alphabet) — had a great run in 2015, with returns ranging from 34% to 134%, but from a tax perspective any investor who bought last year and eyeing the exits wants them to keep climbing. That’s because the one-year mark is a line of demarcation for the tax man.

Selling stocks, you’ve held for less than a year triggers a short-term capital gain, taxed as ordinary income. That could mean kicking back anywhere from 25% to 39.6% to Uncle Sam. But hold those same stocks for at least 12 months and the tax rate drops to 15% for most tax brackets.

WHY TO INVEST IN IT

Investing in the stock is the only way most people have of building real wealth. Stock is just one of many potential places to invest your money. Investing in stock is often risky, which draw attention to huge gains & losses of some investors.
- One of the primary benefits of investing in the stock market is the chance to grow your money. Over time, the stock market tends to rise in value, though the prices of individual stocks rise and fall daily. Investments in stable companies that are able to grow tend to make profits for investors. Likewise, investing in many different stocks will help build your wealth by leveraging growth in different sectors of the economy, resulting in a profit even if some of your individual stocks lose value.
- Stocks are risky This means they don’t have a guaranteed return and sometimes lose money. However, the long-run trend of the stock market has been undeniably upward. Stocks have the highest return of any investment asset over the long term. According to the Federal Reserve, the stock market has grown by an average of more than 10 percent a year over the past 50 years. During this same period, government bonds only grew by 5 percent a year. If you can stomach the market swings, you will see the highest return on your money with the stock market.
Purchasing stocks of companies operating in different sectors as well as segments is possible, which helps in optimizing the asset-allocation and provides diversification.
24 April, 2019
10 things you should know about stock Market

1. Do Not Borrow Money to Invest in Stocks.

One other mistake new investors make is utilizing borrowed funds to pay for shares. That is nearly at all times a horrible concept that may result in disaster. Once you borrow cash to spend money on shares, you might be inviting one other particular person or establishment which can not have your greatest curiosity at coronary heart into the decision-making course of. Cease the entire nonsense about “good debt” and “dangerous debt” and notice that threat discount is usually extra vital than your compound annual progress fee.

2. Know What You Need, And What You’re Paying For.

The evolving brokerage business is a beehive of competitors to supply the most recent and biggest buying and selling choices, however for many buyers the essential necessities could be discovered wherever.

Ensure you know the kind of purchase or promote order you are coming into. A market order, as an illustration, will likely be executed as quickly as doable, regardless of the prevailing market value; a restrict order against this will solely full the transaction inside value parameters you have established.

3. Different brokerages have different strengths and weaknesses.

Naturally, totally different brokerages have very totally different strengths and weaknesses. Some have very excessive charges on transactions however will provide a ton of assist to particular person buyers. Others may provide decrease charges however be very hands-off. Some may cost nothing for sure sorts of transactions (often if you’re shopping for the corporate’s personal investments, which I’ll clarify beneath).

What brokerage do I take advantage of? I take advantage of Motilal Oswal. That is largely as a result of I make investments my very own cash in it for which they don’t cost any excessive transaction charges. You’ll be able to examine Motilal Oswal brokerage companies in my subsequent weblog.

4. The Chart

Studying to learn a chart is a talent that takes time, however primary chart studying takes little or no talent. As famed investor Dennis Gartman says on a regular basis on CNBC, if an funding’s chart begins on the decrease left and ends on the higher proper, that is a very good factor. If the chart is heading down, keep away and do not attempt to determine why. There are literally thousands of shares to select from with out choosing one that’s shedding cash. If you happen to actually imagine on this inventory, put it in your watch checklist and are available again to it at a later time.

There are lots of individuals who imagine in investing in shares which have scary wanting charts, however they’ve analysis time and sources that you simply most likely do not.

5. Buy Low, Sell High.

Sounds so easy proper? And but investing is a uncommon a part of our monetary lives the place issues getting cheaper seems like a nasty factor. Few shoppers are lamenting cheaper costs on the pump amid the collapse in oil costs over the past yr and a half, but a reasonable market fall is handled because the dying knell for the bull market.

These are information that aren’t mutually unique: the present bull market will finish, and over nearly any long-term horizon shares have confirmed to be useful investments that usually grind increased.

6. Trade what you see, not what you Think.

As a dealer, you could have most likely learn that you should management your feelings and give attention to logic and objectivity as an alternative of giving into the impulses of greed, hope, and concern. Nevertheless, it’s one factor to know you shouldn’t commerce emotionally and one other to truly know HOW to NOT commerce emotionally and how you can implement this information.

Whereas “buying and selling what you see” describes the optimum state of affairs during which merchants make goal choices primarily based on sound value evaluation, “commerce what you assume” is the precise reverse and it’s how nearly all of merchants make their buying and selling choices – pushed by feelings, impulses and wishful considering.

As a way to turn out to be a persistently worthwhile dealer it’s needed to plot a plan utilizing our extra logical and goal frontal lobe part of the mind, which is the latest space of the human mind and permits us to plan, motive, and comprehend sophisticated concepts.

By studying to commerce what we see, and never what we expect, we will ensure that we’re working on logic and objectivity as an alternative of emotion.

7. Watch out for red flags.

There are a number of pink flags to look at for when selecting shares. Simply to call a number of, rookies ought to keep away from the next sorts of shares

Corporations that do not earn any earnings

Shares whose share costs appear to at all times drop (have a look at the three- or five-year chart)

Corporations which are beneath investigation

Corporations with a lot of debt

Shares with current dividend cuts, or an unstable dividend historical past

8. Don’t put all Eggs in one basket.

It is a piece of recommendation which signifies that one shouldn’t focus all efforts and sources in a single space as one may lose every part.

Don’t pull all of your eggs in a single basket; means don’t threat every part . If you happen to maintain all of your egg in a single basket, if the basket will get stolen or somebody drop the basket then you find yourself shedding all of your eggs. However however in case you had stored your eggs on a number of baskets and if one had been dropped by somebody or received stolen. Then you definately would have free solely a few of your eggs not all.

This proverb can be relevant in stock Market.

If you happen to make investments your total cash on one shares, and if the share goes down, it can take you down. That’s the reason it’s suggested by no means totally depending on one share. As a substitute make investments on a number of shares. Thus if one goes down you lose few cash not all.

9. If you cannot control your emotions, you cannot be in share market.

Unless you can watch your stock, holding decline by 50% without becoming panic, you should not be in stock market.

Don’t let feelings cloud your judgement. Many buyers have been shedding cash in stock markets because of their lack of ability to manage feelings, significantly concern and greed.In a bear market, however, buyers panic and promote their shares at rock-bottom costs.

Greed augments when buyers hear tales of fabulous returns being made within the stock market in a brief time frame. “This leads them to take a position, purchase shares of unknown corporations or create heavy positions within the futures phase with out actually understanding the dangers concerned.”

As a substitute of making wealth, these buyers thus burn their fingers very badly the second the sentiment available in the market reverses. In a bear market, however, buyers panic and promote their shares at rock-bottom costs. Thus, concern and greed are the worst feelings to really feel when investing, and it’s higher to not be guided by them.

10. Buy right and hold tight.

In share market before buying anything one should have a total knowledge about it, because right buying is one of the most important factor in share market. Before buying any share there are certain parameters one should look. Buying right in shares means you have to see the Fundamental Analysis should be strong.

It should be technically strong and its should up trending. One should also see that the company must be listed at least from last 5-7 years. Also should check the dividend ratio of last few years.

And once this all parameters are in favor, the shares are purchased the the role come of hold tight. Try to hold the shares for longer time to take the benefits of it. Just because the rates are falling or rising that dosen’t means it’s a right time to sell it. We should have a control on it and try to hold the shares. Selling of shares should be depend on it’s graphs, charts & company condition and not the price. Yes, price may also be one of the reason for selling the shares, but should not be the only factor.

14 January, 2019
MOST SUCCESSFUL INVESTORS
The most successful investor is an individual who has achieved remarkable success in the world of investing through their exceptional knowledge, skills, and decision-making abilities. They possess a deep understanding of the financial markets, economic trends, and various investment instruments.

This investor demonstrates a unique ability to identify lucrative investment opportunities and accurately assess their potential risks and rewards. They possess a sharp analytical mind and extensive experience, allowing them to make informed investment decisions that consistently yield impressive returns.

What sets this investor apart is their long-term perspective and the ability to see beyond short-term market fluctuations. They have a strategic mindset and understand the importance of patience and discipline in achieving consistent growth over time.

The most successful investor is highly adaptable and stays updated with the latest market developments and emerging trends. They possess excellent research skills and are constantly seeking new knowledge to enhance their investment strategies.

RADHAKISHAN DAMANI

BORN: BIKANER

AGE: 61

NETWORTH: 1,040 CRORE USD

He entered the market at an age of 32. Radhakishan Damani is a stock market investor, stockbroker, trader, the founder & promoter of Dmart retail store in India.Radhakishan Damani is also known as“Mr. white & white” because of his simple dressing. Radhakishan Damani is a veteran stock market investor & founder of Supermarket chain Dmart. Mr. white & white is a master in picking multibagger stock. He is famous as a man with Midas touch.

The Badshah of Dalal Street Rakesh Jhunjhunwal calls him a mentor / guru. Rakesh Jhunjhunwala has credited Damari for guiding him in the stock market.

His retails chain accounts for 91 stores across India & is the third biggest in the industry. Radhakishan owns 52% stocks in the parent company of Dmart called Avenue Supermarts & Bright star investment- his investment company, holds other 16% stake. Overall – Dmart’s success is focused on three things: Customers, Vendors & Employees.

RAKESH JHUNJHUNWALA

BORN: MUMBAI, INDIA

AGE: 58

EDUCATION: UNIVERSITY OF MUMBAI, SYDENHAM COLLEGE OF COMMERCE & ECONOMICS

NETWORTH: 240 CRORE USD

Rakesh jhunjhunwala entered the Indian market in 1985. Rakesh jhunjhunwala also known as “India’s Warren Buffett” & “The Big Bull” is one of the most renowned & successful Stock Market investors in India.His father was also interested in stocks.

He is a Chartered Accountant. He manages his own portfolio as a partner in his asset management firm, RARE Enterprises. The name RARE is derived from the initial of his name & his wife’s name.

He is also the chairman of APTECH LIMITED & HUNGAMA DIGITAL MEDIA ENTERAINMENT PVT LTD. Rakesh jhunjhunwala follows the ideology of warren Buffett & believes in long term investment. He strongly advocates the growth of India & its rising company. Mr. Rakesh Jhunjhunwala is also confident in learning from mistakes. He often says- “Mistakes are your learning friends. The idea is to keep these mistakes small.”

https://www.youtube.com/watch?v=QGep7gSWRNI&t=26s

CHANDRAKANT SAMPT

         “Markets & Mistakes are the best education. The convential education just close the mind.”

Chandrakant Sampt was known to many as the Warren Buffett of India & was regarded as a veteran stock market investor. The 82-year-old investor lead an active yet simple life that included daily jugging & yoga exercises. Sampt hardly looked like one of the most successful investors in the country. He believed in investing in companies with strong cash flow & predictable business. He made a killing in the 1970’s with the introduction of the Foreign Exchange Regulation Act Or FERA.

He began accumulating shares of blue chip like Hindustan Unilever (then Hindustan Lever), Procter & Gamble, (Initially Richardson Hindustan), Gillette (then Indian Shaving Products) & Colgate, from the time they went public.

“His greatest contribution to the Indian market was that he shared his immense knowledge about investing by mentoring many as prising investors”, Ramesh Damani.

“The one man who has had a lasting impression on him is none other than the greatest management theorist of all time”, Peter F. Drucker.

His investment philosophy; identify great businesses & let the power of compounding to the rest. Invest in a business you understand the company should have either zero or very little debt, the share should be available at a P/E ratio of 13 to 14 times the current year’s earnings & lastly, it should be available between 3.5% & 4%, “it is that simple!” he says.

RAMESH DAMANI

AGE: 61

EDUCATION: HR COLLEGE, MUMBAI (Bachelor’s degree in commerce) CALIFORNIA STATE UNIVERSITY (Master’s Degree in Business Administration)

OCCUPATION: FOUNDER OF RAMESH S. DAMANI FINANCE PVT LTD.

Ramesh Damani, the investment guru & one of the most successful stock market investors in India, started his journey to riches in 1990’s when Sensex was 600 points. He holds a bachelor’s degree in commerce from HR college, Mumbai & master’s degree in business Administration from California state university.

Investor Ramesh Damani has been known for his investment in both unlisted & listed companies. Damani is popular for his high- quality value picks, that can be retained in the portfolio for long periods of time. He follows the Warren Buffett model of investing, which favors companies with strong management credentials & processes.

Ramesh Damani works at privately owned Ramesh S. Damani finance PVT Ltd.

Ramesh Damani’s first famous investment was ‘Infosys’. Coming from a techie background in the US, he knew the Infosys has great future potentials. So, when Infosys become public in 1993, he invested Rs.10 lakhs in it. By 1999, this investment has given him more than 100 times return.

“I learned that just become a stock double, it is not a reason to sell it.”

PORINJU VELIYATH

BORN: 6 JUNE,1962, CHALAKUDY

AGE: 56

EDUCATION: BACHELOR OF LAWS

Porinju Veliyath is one of the most successful stock market investors of India. He has become one of the most respected value stock picker of India. Porinju Veliyath is an Indian investor & fund manager. He manage his own portfolio & the portfolios of investors in his fund management firm Equity Intelligence been called a Small- Cap Czar by economic times. “I buy lesser known, high quality businesses to derive maximum portfolio value. I didn’t shy away from smaller companies like other ‘knowledgeable people’ do. And I don’t buy a lot of great companies with clean balance sheet, honest management & clear business visibility. If you invest in such companies even bank FDs would beat your portfolio returns”, Porinju Veliyath.

PORINJU VELIYATH INVESTMENT STYLE
1. Identify & invest in future muilti baggers.
2. Make strategy when to exit from stock.
3. Buy lesser known, high quality businesses to derive maximum portfolio value.
4. Invest in companies with clean balance sheet, honest management & clear business visibility.
Also Read | Best Stocks For Long Term Investment
13 October, 2018
TYPES OF EQUITY MARKET

TYPES OF EQUITY MARKET:

A.          PRIMARY MAKET:

                                         The primary market is also known as new issues market. Here, the transaction is conducted between the issuer & buyer. The primary market is the part of the capital market that deals with issuing of new securities. Primary market creat long term instruments through which corporate entities raise funds from the capital market. In short, the primary market creates new securities & offers them to the public. It is a public issue, if anybody & everybody can subscribe, for it. If the issue is made to select group of people then it is termed as private placement.

Capital & Equity can be raised in the primary market by any of the following four ways:

1. Public Issue

As the name suggests, public issue means selling securities to the public at large, such as IPO. It is the most vital method to sell financial securities.

2. Rights Issue

Whenever a company needs to raise supplementary equity capital, the shares have to be offered to present shareholders on a pro-rata basis, which is known as the Rights Issue.

3. Private Placement

This is about selling securities to a restricted number of classy investors like frequent investors, venture capital funds, mutual funds, and banks comes under Private Placement.

4. Preferential Allotment

When a listed company issues equity shares to a selected number of investors at a price that may or may not be pertaining to the market price is known as Preferential Allotment.

B.           SECONDARY MARKET:

The secondary market also called the after market & follow on public offering is the financial market in which previously issued financial instruments such as bonds, stock options, & futures are bought & sold.

THE SECONDARY MARKET IS FURTHER DIVIDED INTO 2 KINDS OF MARKET:

1. AUCTION MARKET

An auction market is a place where buyers & sellers convene at a place & announce the rate at which they are willing to sell or buy securities. They offer either the ‘BID’ or ‘ ASK’ prices, publicly. Everything is announced publicly & interested investors can make their choice easily. Where trading & settlement is done through the stock exchange & the buyers & sellers don’t know each other.

2. OTC

OVER THE COUNTER/ OFF EXCHANGE TRADING is done directly between two parties, without the supervision of on exchange. Is based in Mumbai, Maharashtra.It does not take place, however, on the stock exchanges.OTC MARKETS are the informal types of market where trades are negotiated.

DIFFERENCE BETWEEN PRIMARY MARKET & SECONDARY MARKET

Also Read | Option Market

29 June, 2018
Know about Mutual Fund
DEFINITION:

“A mutual fund is a professionally managed investment scheme, usually run by an asset management company that brings together a group of people & invests their money in stocks, bonds & other securities.”

INTRODUCTION:

Mutual funds are the most popular investment types for the everyday investor. Because they are easy to use in many in many ways, investing for dummies. A mutual fund is a kind of investment that uses money from many investors to invest in stocks, bonds & other types of investment. A fund manager decides how to invest the money & for this he is paid a fee, which comes from the money in the fund. All the MUTUAL FUNDS are registered with SEBI.

In simpler terms, mutual funds are like baskets. Each basket holds certain types of stocks, bonds or a bland of stocks & bonds to combine for one mutual fund portfolio.

Eg: An investor who buys a fund called XYZ international stock is buying one investment security, the basket that holds dozens or hundreds of stocks from all around the globe, hence the “International” monike.

TIP’S FOR BEGINNERS INVESTING IN MUTUAL FUNDS
- Start saving & investing early in life.
- Try to understand the fund in which you are investing.
- Check the past performance of your mutual fund.
- Don’t avoid Index fund.
- Experience of fund managing team
- Do not commit common mistakes
- Understanding the risk involved
- Keep your investment objective clear.
- The NAV does not matter.
- Diversify your investment over time.
- Have an investment discipline.
- Invest in stocks if you are prepared to take risks.
- Never forgot your mutual fund investment.
- Stay invested for a longer period of time.
NAV ( NET ASSET VALUE )

NET ASSET VALUE is the total asset value (net of expenses) per unit of the fund & is calculated by AMC (asset management company) at the end of every business day. In order to calculated the NAV of a mutual fund, you need to take current market value of the funds assets minus the liabilities, if any & divide it by the number of share outstanding. NAV is calculated as follows.

NAV Rs. = MARKET/FAIR VALUE OF SECURITIES + ACCRUED          INCOME + RECEIVABLE + OTHER ASSETS + ACCRUED   EXPENSES – PAYABLES – OTHER LIABILITIES

/ NO.OF UNITS OUTSTANDING OF THE SCHEME/OPTION

Eg. If the market value of securities of mutual fund scheme is Rs. 500 lakh & the mutual fund has issued 10lakh units of Rs. 10lakh each to investors, then the NAV unit of the fund is Rs.50.

ADVANTAGES OF MUTUAL FUND

DIVERSIFICATION

Mutual funds provide the benefits of diversification across different sectors & companies. A single mutual fund can hold securities from hundreds or even thousands of issuers. This by investing in a mutual fund, you can gain from the benefits of diversification & asset allocation, without investing a large amount of money that would required to build an individuals portfolio. The diversification considerably reduces the risk of serious monetary loss due to problems in a particular company or industry.

AFFORDABILITY

You can begin buying units or shares with a relatively small amount of money.

Eg. Rs. 500 for the initial purchase.

Some mutual funds also permits you to buy more units on a regular basis with even smaller installments.

Eg. Rs.50 per month.

LOW TRANSACTION COST

Due to economics of scale, mutual funds pay lower transaction costs. The benefits are passed on to mutual fund investors which may not be enjoyed by an individual who enters the market directly.

TRANSPARENCY

Funds provide investors with updated information pertaining to the markets & schemes through fact sheets, offer documents, annual report etc.

DISADVANTAGES OF MUTUAL FUNDS

·      High Expense Ratios and Sales Charges

If you’re not paying attention to mutual fund expense ratios and sales charges, they can get out of hand. Be very cautious when investing in funds with expense ratios higher than 1.20%, as they will be considered on the higher cost end. Be weary of 12b-1 advertising fees and sales charges in general. There are several good fund companies out there that have no sales charges. Fees reduce overall investment returns.

·      Management Abuses

Churning, turnover and window dressing may happen if your manager is abusing his or her authority. This includes unnecessary trading, excessive replacement and selling the losers prior to quarter-end to fix the books.

·      Tax Inefficiency

Like it or not, investors do not have a choice when it comes to capital gain payouts in mutual funds. Due to the turnover, redemptions, gains and losses in security holdings throughout the year, investors typically receive distributions from the fund that are an uncontrollable tax event.

·      Poor Trade Execution

If you place your mutual fund trade any time before the cut-off time for same-day NAV, you’ll receive the same closing price NAV for your buy or sell on the mutual fund. For investors looking for faster execution times, maybe because of short investment horizons, day trading, or timing the market, mutual funds provide a weak execution strategy.
24 June, 2018