i m very much a beginner.. but i ve been investing through SIPs in mfs(both tax asving n equity diversified).. but i find that most of the schemes have invested in common stocks like icici/infy/tcs/sbi/reliance etc.. so does it make sense to be invested through sips or buy shares of those companies?
currently i have shares of icici bank & itc...
Ram
it make sense to be invested through sips or buy shares of those companies?
Problem is, wot makes sense n wot non-sense is proven only in the hindsight :D
Considering the mkt scenario, this doesn't seem to be a good time to rejig ur portfolio.. stay invested with ur current distribution across equity n MFs, or u may consider booking part profits too..
Entirely my views, open to debate.. the mkts have this tremendous ability to make one n all eat one's words.. :)
Problem is, wot makes sense n wot non-sense is proven only in the hindsight :D
Considering the mkt scenario, this doesn't seem to be a good time to rejig ur portfolio.. stay invested with ur current distribution across equity n MFs, or u may consider booking part profits too..
Entirely my views, open to debate.. the mkts have this tremendous ability to make one n all eat one's words.. :)
I agree to the point that one should book profits now, atleast partial profits.
The kind of levels the stock are trading really can give a run for their money to the taxi meters in India
read this one.....
lot of queries from investors across the country. Here's a sample:
'I bought this scrip last week and it is down. Should I sell?'
'The markets are trading at a peak. Is it right to invest now?'
'I want to make maximum returns in minimum time. Suggest some stocks.'
'Which are the stocks worth buying with price less than Rs 50?'
'When will the market correct? I want to invest in some good shares.'
This kind of approach to investing in equity is a recipe for disaster.
There are some serious problems here. Let's pick up some important lessons.
Lesson 1
The moment the prices of scrips drop, say, by 5-10 per cent, we get worried. In that anxiety, we want to sell and get out.
Let's say the Reliance share you bought last week is down 10 per cent. So what? Will Reliance business close down? Or will Mukesh Ambani run away with your money? No.
The movement in stock prices has no impact on the business. Reliance will continue to make profits and grow. Mukesh Ambani will continue to build world-class projects. If that is the case, Reliance shares will see new heights in future. Why bother about these falls, which likely will only be temporary?
The problem is, we buy stocks, not businesses. The Tatas and Birlas have been around for over 100 years. Hundreds of successful companies have run for decades and continue to grow irrespective of the stock market volatilities.
Yes, some businesses succeed, some fail. There are ups and downs. That is the inherent nature of a business. But, in the long run, they will make profits and grow. That is where management counts. Good managements run profitable operations.
Second, that's why we diversify. Even if we lose money in a few stocks, we will still make lots of money in others.
Moral: Buy businesses, not stocks.
lot of queries from investors across the country. Here's a sample:
'I bought this scrip last week and it is down. Should I sell?'
'The markets are trading at a peak. Is it right to invest now?'
'I want to make maximum returns in minimum time. Suggest some stocks.'
'Which are the stocks worth buying with price less than Rs 50?'
'When will the market correct? I want to invest in some good shares.'
This kind of approach to investing in equity is a recipe for disaster.
There are some serious problems here. Let's pick up some important lessons.
Lesson 1
The moment the prices of scrips drop, say, by 5-10 per cent, we get worried. In that anxiety, we want to sell and get out.
Let's say the Reliance share you bought last week is down 10 per cent. So what? Will Reliance business close down? Or will Mukesh Ambani run away with your money? No.
The movement in stock prices has no impact on the business. Reliance will continue to make profits and grow. Mukesh Ambani will continue to build world-class projects. If that is the case, Reliance shares will see new heights in future. Why bother about these falls, which likely will only be temporary?
The problem is, we buy stocks, not businesses. The Tatas and Birlas have been around for over 100 years. Hundreds of successful companies have run for decades and continue to grow irrespective of the stock market volatilities.
Yes, some businesses succeed, some fail. There are ups and downs. That is the inherent nature of a business. But, in the long run, they will make profits and grow. That is where management counts. Good managements run profitable operations.
Second, that's why we diversify. Even if we lose money in a few stocks, we will still make lots of money in others.
Moral: Buy businesses, not stocks.
contd.....
Lesson 2
Recently, I read that if you had invested Rs 100,000 in Infosys at the time of IPO, it would be worth about Rs 64 lakh (Rs 6.4 million) now. But how many people made that kind of money? None, I guess, except the employees and a lucky few who bought the shares but forgot about it.
Answer honestly: wouldn't you have sold the shares when it doubled or tripled or became a ten-bagger? How many of us would have had the patience to hold on?
The problem is, we watch stock prices, not businesses. If people had kept track of the business, they would have seen the company had the potential to grow at 30-40 per cent per annum. Then they would have never sold their shares.
I know many people who got out at 10,000 Sensex levels, thinking the markets will correct and they will re-enter at lower levels. They are now ruing their decision. The problem: they were so obsessed tracking the Sensex that they didn't see strong economic and business growth.
Moral: Watch business growth, not rise in stock prices.
Lesson 3
The moment people buy a stock, they expect it to double soon. They see the stock ticker 10 times a day. They call their broker a couple of times daily to find out what is happening.
I have one question for such people. Can you set up a steel plant in one day? Can you build a power plant over the weekend? Can you start a mobile company and expect to have 1 million customers on Day 1? No.
Businesses take time to set up, acquire customers and generate profits. Only when the companies increase their profits will the share price also increase.
Therefore, having bought a good business and good management, give it time to prosper. If you don't have the patience, you might as well go to a casino or call-up Shah Rukh Khan at KBC.
Moral: The stock market is a serious long-term business, not a make-money-overnight casino
Lesson 2
Recently, I read that if you had invested Rs 100,000 in Infosys at the time of IPO, it would be worth about Rs 64 lakh (Rs 6.4 million) now. But how many people made that kind of money? None, I guess, except the employees and a lucky few who bought the shares but forgot about it.
Answer honestly: wouldn't you have sold the shares when it doubled or tripled or became a ten-bagger? How many of us would have had the patience to hold on?
The problem is, we watch stock prices, not businesses. If people had kept track of the business, they would have seen the company had the potential to grow at 30-40 per cent per annum. Then they would have never sold their shares.
I know many people who got out at 10,000 Sensex levels, thinking the markets will correct and they will re-enter at lower levels. They are now ruing their decision. The problem: they were so obsessed tracking the Sensex that they didn't see strong economic and business growth.
Moral: Watch business growth, not rise in stock prices.
Lesson 3
The moment people buy a stock, they expect it to double soon. They see the stock ticker 10 times a day. They call their broker a couple of times daily to find out what is happening.
I have one question for such people. Can you set up a steel plant in one day? Can you build a power plant over the weekend? Can you start a mobile company and expect to have 1 million customers on Day 1? No.
Businesses take time to set up, acquire customers and generate profits. Only when the companies increase their profits will the share price also increase.
Therefore, having bought a good business and good management, give it time to prosper. If you don't have the patience, you might as well go to a casino or call-up Shah Rukh Khan at KBC.
Moral: The stock market is a serious long-term business, not a make-money-overnight casino
contd......
Lesson 4
Another interesting aspect is da stories we hear in local trains, buses, parties, offices, of how so-and-so doubled/ tripled his money
We end up feeling like fools nt 2 invest in the market. At the first opportunity, we buy a few stocks widout proper research and understanding
I m not saying they r lying. But I would like 2 ask them about their other investments too. More often than not, for every successful investment, they would have made five other poor investments and lost money. They won't tell you about those
The point is, when our investment is motivated by others' half-truths, we never have the patience and discipline required for successful equity investing
Moral: Don't be fooled by others' so-called success stories
Lesson 5
As I mentioned earlier, people sold looking at the Sensex levels and lost out on the huge potential profits. There are many waiting for the Sensex to fall to the 'right' levels to enter the market.
There are two points here. I highlighted one earlier: watch the economy not the Sensex
Second, timing. Given that humans can switch from irrational exuberance to extreme pessimism and back in a matter of days, I believe even God will find it difficult to time the markets
Moreover, I bet not even 1 per cent of you will enter the markets if they started crashing from tomorrow. The Dalal Street was totally deserted during the historic crash of May 2006, which was actually a great time to buy
So I suggest let's get over this fixation with timing the markets. Let us look at business potential and invest with a long-term perspective
Moral: Time in the market is more important than timing the market.
Discipline and patience - that is da mantra 2 creating wealth on da stock markets. Unfortunately, both r in short supply. If u hav thm, u make your riches. If nt, you could be in trouble
I m nt very sure how many would agree wid da above lessons or even follow thm. Such is human nature: guided by greed and fear, than by reason and logic.
hope u like it........keep invested........happy investing
Lesson 4
Another interesting aspect is da stories we hear in local trains, buses, parties, offices, of how so-and-so doubled/ tripled his money
We end up feeling like fools nt 2 invest in the market. At the first opportunity, we buy a few stocks widout proper research and understanding
I m not saying they r lying. But I would like 2 ask them about their other investments too. More often than not, for every successful investment, they would have made five other poor investments and lost money. They won't tell you about those
The point is, when our investment is motivated by others' half-truths, we never have the patience and discipline required for successful equity investing
Moral: Don't be fooled by others' so-called success stories
Lesson 5
As I mentioned earlier, people sold looking at the Sensex levels and lost out on the huge potential profits. There are many waiting for the Sensex to fall to the 'right' levels to enter the market.
There are two points here. I highlighted one earlier: watch the economy not the Sensex
Second, timing. Given that humans can switch from irrational exuberance to extreme pessimism and back in a matter of days, I believe even God will find it difficult to time the markets
Moreover, I bet not even 1 per cent of you will enter the markets if they started crashing from tomorrow. The Dalal Street was totally deserted during the historic crash of May 2006, which was actually a great time to buy
So I suggest let's get over this fixation with timing the markets. Let us look at business potential and invest with a long-term perspective
Moral: Time in the market is more important than timing the market.
Discipline and patience - that is da mantra 2 creating wealth on da stock markets. Unfortunately, both r in short supply. If u hav thm, u make your riches. If nt, you could be in trouble
I m nt very sure how many would agree wid da above lessons or even follow thm. Such is human nature: guided by greed and fear, than by reason and logic.
hope u like it........keep invested........happy investing
Guys,
I have a basic doubt. If I have a company shares which are quoting at a high price and want to sell them, is there any guarantee that i will be sold at that price? Or is it that the DP only (icicidirect.com) will buy it from me and later they will sell them on their own?
For example: I bought GMR at 210, its trading at around 850. So if i want to sell them, will they be sold at the prevailing price? And what abt the settlement period and crediting amount to my bank a/c? Is it T+2 only? (its the case in icicidirect.com)
Guys,
I have a basic doubt. If I have a company shares which are quoting at a high price and want to sell them, is there any guarantee that i will be sold at that price? Or is it that the DP only (icicidirect.com) will buy it from me and later they will sell them on their own?
For example: I bought GMR at 210, its trading at around 850. So if i want to sell them, will they be sold at the prevailing price? And what abt the settlement period and crediting amount to my bank a/c? Is it T+2 only? (its the case in icicidirect.com)
You can sell at the CMP (current market price) or you can set your price limit and wait (in queue) till it is reached during the day's trade.
(hope I am confusingly clear) 😐
Guys,
I have a basic doubt. If I have a company shares which are quoting at a high price and want to sell them, is there any guarantee that i will be sold at that price? Or is it that the DP only (icicidirect.com) will buy it from me and later they will sell them on their own?
For example: I bought GMR at 210, its trading at around 850. So if i want to sell them, will they be sold at the prevailing price? And what abt the settlement period and crediting amount to my bank a/c? Is it T+2 only? (its the case in icicidirect.com)
Yes,T+2
If you sell the sahres on Monday, you will get the money in your account by Wednesday,But as I know ICICI has some facility whereby one can withdraw the funds same day or next day by paying a high brokerage
1) Guys, so you mean to say that any share can be sold at the current market price? Even the ones that are not trading daily/frequently (but listing on bse)?
2) I have icicidirect.com a/c but fed up with the slow site. Any alternatives which has a 3 in 1 a/c (demat,bank,brokerage) like icicidirect.com. I heard that 5paise,sharekhan etc needs hdfc,uti bank a/c and the integration is not proper.
3) ur take on purvankara - ipo to open on july31.. I think its a bit overpriced though.. Any suggestions..?!!
@ sagaram
abt PURAVANKARA IPO
really very expensive.............when comparing with all other leading realty stocks, issue definitely looks expensive at both the ends
its a average kind of ipo....i personally feel Subscribe' with long term perspective....
gray market premium around 30 buks..............rating 46 % and recommend GOOD (medium term )
EVERONN rocks!! . Though got only 50 shares on a fully-loaded (read 1 lac, the limit for retail investor) 'only one account' application.
Just dropping one of my observations:
Catch EDUCOMP whenever its RSI (relative strength index) drops to 51-50. It has a tendency to move up to an RSI of 75-78. Get out then with a sizeable profit:). Conditions: Mkt. is not in a totally bearish sentiment. Even in an average mkt., it has shown upmoves from an RSI of 50-51.
cheers!!
SHEKHAR
EVERONN rocks!!
Just dropping one of my observations:
Catch EDUCOMP whenever its RSI (relative strength index) drops to 51-50. It has a tendency to move up to an RSI of 75-78. Get out then with a sizeable profit:). Conditions: Mkt. is not in a totally bearish sentiment. Even in an average mkt., it has shown upmoves from an RSI of 50-51.
cheers!!
SHEKHAR
pardon my ignorance ... but what does this RSI indicate ?
How do I find it :p
Ps. could have googled it .. but let the knowledge flow on PG
1) Relative Strength Index (RSI) - StockCharts.com
2)
Relative Strength Index - RSI
One look at the formula (in the 1st link) & you'll see why even if a stock remains stagnant its RSI decreases. Its one of the many technical indicators used to time the entry/exit into a stock. Its a momentum indicator.
As you'll read, the 70 & 30 are the indicators of overbought & oversold. But some high volume, volatility stocks show 80-20 levels. That is, a great momentum in the upsurge stock, crosses 75,76 levels: sell.
Deeper detailing and other technicals, no don't ask . I'm myself just starting with it & don't even know whether will go ahead into further technicals as aspiration is to become an investor and not a speculator/trader :).
How does one finds it:
BSE's website. Choose 'charting' in the dropdown. When you have moved to the stock, choose 'daily' from the first dropdown on the left hand side (lhs) vertical box and on rhs in the horizontal box, among many technical parameters, you'll see RSI.
cheers!!
SHEKHAR
I got a doubt. If we want to sell a highly quoted share, will it be sold? I mean who wants to buy a Reliance or iNFosys shares at 2000, 1900 respectively?
sagaram SaysI got a doubt. If we want to sell a highly quoted share, will it be sold? I mean who wants to buy a Reliance or iNFosys shares at 2000, 1900 respectively?
Hi,
Don't worry, you will always find potential buyers for good and reputed companies like Reliance and Infosys at every possible price...
@ Anshul, thats not a correct way to put it...
Reliance and Infosys quote high prices due to the following:
Every share yields a regular earning. This earning could range from zero to any amount depending on how profitable the company is.
Usually the price of a share is traded within P/E limits where P is the price of purchase of a single share and E is the earning it yields. The P/E ratio varies from 15 all the way to 25 for high market optimism. Stocks are rarely ever higher than P/E and if they are, they experience very high volatility. P/E's of 17-19 are most stable (I know a 100 ppl will wanna argue this, but this is MHO)...
Thus when you read reports of companies making lower profits, the investors realise that the earning will be lower and thus lower the price of the share by becoming more willing to sell it - thus unconsciously keeping the p/e ratio more or less constant.
People buy with high 'P's coz they're expecting high 'E's. Hope this cleared a doubt or two...
@ Anshul, thats not a correct way to put it...
Reliance and Infosys quote high prices due to the following:
I agree to your view point that my method f explanation wasn't correct but i was just trying to put in layman's language....
folks,
any idea of good ipos due for release shortly? which site gives free advise/suggestions on ipos/seondary market?
appreciate your time/effort.
folks,
any idea of good ipos due for release shortly? which site gives free advise/suggestions on ipos/seondary market?
appreciate your time/effort.
try Moneycontrol Message Board > India's #1 Message Board for Stocks Discussion
hope it serves ur purpose!