PROJECT REPORT ON

INVESTMENT WORLD OF INDIAN STOCK MARKET

Project report submitted in partial fulfillment of requirement of award of the degree of Bachelor of Management Studies Mumbai University Submitted by: KEERTI R. MITTAL TYBMS (SEMESTER V) ROLLNO - 31 Under guidance of: PROF. ARVIND DHOND K.J. SOMAIYA COLLEGE OF ARTS AND COMMERCE VIDYAVIHAR (E) MUMBAI 400077 2008-09

DECLARATION

I, KEERTI MITTAL, student of K.J. SOMAIYA COLLEGE OF ARTS AND COMMERCE, T.Y.B.M.S (semester V) hereby declare that I have completed this project on INVESTMENT WORLD OF INDIAN STOCK MARKET in the academic year 2007-08. The information submitted is true and original to the best of knowledge.

Signature of student

CERTIFICATE

I, Prof. ARVIND DHOND, hereby certify that, KEERTI MITTAL, student of K.J. SOMAIYA COLLEGE OF ARTS AND COMMERCE, T.Y.B.M.S. (semester V) has completed the project on INVESTMENT WORLD OF INDIAN STOCK

MARKET in the academic year 2008-09. The information submitted is true and
original to best of my knowledge.

SIGNATURE OF PROJECT GUIDE

SIGNATURE OF THE PRINCIPAL

SIGNATURE OF THE EXAMINER

ACKNOWLEDGEMENT
I would like to express my sincere appreciation to Prof. ARVIND DHOND for his kind help, guidance, support and encouragement throughout my project. This project will help me to curve my personality in the best manner, which is needed for professional career. In fact this project is the mirror of my aspiration. The valuable aspect of this project is that it shows what should be Investor Behavior while investing in the Stock Market. Finally, I also like to take this opportunity to thanks to my parents, other professors and friends who helped a lot

completing this project successfully.

VISITING CARD

PREFACE
OBJECTIVES OF THE PROJECT:
To get the in depth knowledge of Investor & its Behavior while investing in Stock Market. To Study To study different Investment Strategies. To improve Stock Picking Strategies.

METHODOLOGY:
It is very important to mention about how and from which sources the data has been collected to complete this project. For preparing this project, secondary data has been used. The data had been collected through various sources like Books, e-books, Newspapers, search engines and other various websites.

EXECUTIVE SUMMARY
Investing is putting money to work. This project explains what real investing is and the investing strategies one may adopt. Today, equity is the preferred asset class due to its inherent tax efficient character. Hence we focus on equity investments in to the stock markets. Stock markets: why are they so interesting? Why are they so unpredictable? Why are we unable to understand how they behave? Stock market volatility reflects the behavior of its participants, that is, the investors. Investors react differently when they become a part of the herd. We try to understand this human behavior and become aware of certain behavioral anomalies that distort our thinking and make us take decisions that are against our financial interest. Understanding Behavioral Finance and how it affects markets is the key to a successful investment strategy. Wearing the cloak of patience, eschewing greed and conquering fear, form the basis of these strategies, but behavioral finance goes beyond commonly known principles, and helps us understand the intricate mechanisms of the smartest individuals reflexive, and yet doomed responses, to the capital market.

INDEX
CHAPTERS
I. II. III. IV. V. VI. VII.. VIII.. IX. X.

TOPICS
BASICS STOCKS INVESTORS INVESTING GUIDE TO STOCK PICKING STRATEGIES INVESTMENT STRATEGIES BEHAVIOURAL FINANCE INVESTOR LOSE MONEY RATIOS INVESTNG FUNDAS INVESTMENT TIPS FROM STOCK MARKET GURUS INVESTMENT TIPS FROM RAKESH JHUNJHUNWALA CONCLUSION ANNEXURE ARTICLE BIBLIOGRAPHY

PAGE NO.
1-3 4-9 10-12 13-18 19-29 30-35 36-40 41-47 48-52 53-55 56-58 59 60 61-62 63-64

CHAPTER I
BASICS
1.1 INTRODUCTION:
Do you dream of retiring early (or of being able to retire at all)? Do you know that you should invest, but don't know where to start? If you answered "yes" to any of the above questions, you've come to the right place. The world of finance can be extremely intimidating, but it is firmly believe that the stock market and greater financial world won't seem so complicated once you learn some of the lingo and major concepts. Investors dont have to allow banks, bosses or investment professionals to push your money in directions that you don't understand. After all, no one is in a better position than you are to know what is best for you and your money. Regardless of your personality type, lifestyle or interests, this will help you to understand what investing is, what it means and how time earns money through compounding. But it doesn't stop there. This will also teach you about the building blocks of the investing world and the markets give you some insight into techniques and strategies and help you think about which investing strategies suit you best.

INVESTMENT OPTIONS

WHO CAN INVEST???

Retail investor:

An individual who purchases small amounts of securities for him/herself, as opposed to an institutional investor. Also known as individual investor or small investor. A private investor who buys shares through a stockbroker for his/her private portfolio. Mutual Funds: A mutual fund is a company that pools money from many investors and invests the money in equity shares, bonds, government securities, debentures etc. It is a substitute for those who are unable to invest directly in equities or debt because of resource, time or knowledge constraints. Benefits include professional money management, buying in small amounts and diversification. Mutual funds are usually long term investment vehicle though there some categories of mutual funds, such as money market mutual fund which are short term instrument.

Foreign Institutional Investor: FII means an entity established or incorporated outside India which

proposes to make investment in India. An investor or investment fund that is from or registered in a country outside of the one in which it is currently investing. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds. The term is used most commonly in India to refer to outside companies investing in the financial markets of India. International institutional investors must register with the Securities and Exchange Board of India to participate in the market. One of the major market regulations pertaining to FIIs involves placing limits on FII ownership in Indian companies. Investment Company: Firm that invests the pooled funds of retail investors for a fee. By aggregating the funds of a large number of small investors into a specific investments (in line with the objectives of the investors), an investment company gives individual investors

access to a wider range of securities than the investors themselves would have been able to access. Also, individual investors should be able to save on trading costs since the investment company is able to gain economies of scale in operations.

CHAPTER II
STOCKS
2.1 UNDERSTAND THE TERM STOCK:
In financial markets, stock is the capital raised by an organization through the issuance and distribution of shares. A person or organization which holds shares of stocks is called a shareholder. The aggregate value of a companys issued shares is its market capitalization. Stock is simply a portion of a company. By owning stock, you are a shareholder. Stocks are bought and sold on stock exchanges, such as the BSE & NSE. Usually stock is issued to raise money for a variety of reasons: expansion, developing new products, to pay off debt and acquiring other companies. When a company issues stock for the first time, it is called an initial public offering or IPO. An IPO is underwritten by an investment banker that decides what the stock is worth and when it is best to issue it. Volatility is when a stock price goes up or down. Usually, stock prices rise and fall with supply and demand. Nonetheless, there are other reasons for stock prices to fluctuate. The price will rise when everyone wants the stock and is buying it, however mass sales will also drive a price in the negative direction. Prices will drop when a particular industry takes a fall, when the economy has a general downturn, when the company management is failing, or when there is too much debt. Professional analysts and investment bankers who issue buy/sell/hold ratings also affect the price.

2.2 CLASSIFYING STOCKS:

Income Stocks: The first category of stocks is income stocks, which include share of corporations that give money back to shareholders in the form of dividends (some people call these stocks dividend stocks). Some investors, usually older individuals who are near retirement, are attracted to income stocks because they live off the income in the form of dividends and interest on the stocks and bonds they own. In addition, stocks that pay a regular dividend are less volatile. They may not rise or fall as quickly as other stocks, which is fine with the conservative investors who tend to buy income stocks. Another advantage of stocks that pay dividends is that the dividends reduce the loss if the stock price goes down. There are also a number of disadvantages of buying income stocks. First, dividends are considered taxable income, so you have to report the money you receive to the IRS. Second, if the company doesnt raise its dividend each year and many dont inflation can cut into your profits. Finally, income stocks can fall just as quickly as other stocks. Just because you own stock in a so-called conservative company doesnt mean you will be protected if the stock market falls. Value Stocks: Value stocks are stocks of profitable companies that are selling at a reasonable price compared with their true worth, or value. The trick, of course, is determining what a company is really worthwhat investors call its intrinsic value. Some low-priced stocks that seem like bargains are low-priced for a reason. Value stocks are often those of old-fashioned companies, such as insurance companies and banks that are likely to increase in price in the future, even if not as quickly as other stocks. It takes a lot of research to find a company whose price is a bargain compared to its value. Investors who are attracted to value stocks have a number of fundamental tools (e.g., P/E ratios) that they use to find these bargain stocks. Growth Stocks:

Growth stocks are the stocks of companies that consistently earn a lot of money (usually 15 percent or more per year) and are expected to grow faster than the competition. They are often in high-tech industries. The price of growth stocks can be very high even if the companys earnings arent spectacular. This is because growth investors believe that the corporation will earn money in the future and are willing to take the risk. Most of the time, growth stocks wont pay a dividend, as the corporation wants to use every cent it earns to improve or grow the business. Because growth stocks are so volatile, they can make sudden price moves in either direction. This is ideal for short-term traders but unnerving for many investors. Penny Stocks: Just as their name suggests, penny stocks are stocks that usually sell for less than a rupee a share (although some people define a penny stock as one selling for less than Rs.5 a share). They are also called pink sheet stocks because at one time the names and prices of these stocks were printed on pink paper. The advantage of trading penny stocks is that the share price is so low that almost everyone can afford to buy shares. For example, with only Rs.1000 you can buy 2000 shares of an Rs 0.50 penny stock. If the stock ever makes it to a rupee, you made a 100 percent profit. That is the beauty of penny stocks. On the other hand, you could put your order in at Rs 0.75 a share, and a couple of days later the stock could fall to Rs.0.50. It happens all the time. A number of traders specialize in these stocks, although this is not easy. After all, penny stocks are so cheap for a reason. That reason could be poor management, no earnings, or too much debt, but whatever it is, there usually arent enough buyers to make the stock go higher. Even with their low price, the trading volume on penny stocks is exceptionally low.

2.3WHAT MAKES STOCKS GO UP OR DOWN:

When you invest in the market, you should pay attention to anything that may affect your stocks. As an investor or trader, you must be aware of outside events. Sometimes it helps to step back and see the bigger economic picture. If you can anticipate how an event could affect the stock market, you can shift your money into more profitable investments. Some pros believe that having a thorough understanding of the investment environment is more important than picking the right stock.

2.4 YOU BUY STOCKS FOR ONLY ONE REASON - TO MAKE MONEY:
The stock market is all about making money. Quite simply, if you buy stock in a company that is doing well and making profits, then the stock you own should go up in price. You make money in the stock market by buying a stock at one price and selling it at a higher price. Its that simple. There is no guarantee, of course, that youll make money. Even the stocks of good companies can sometimes go down. If you buy stocks in companies that do well, you should be rewarded with a higher stock price. It doesnt always work out that way, but that is the risk you take when you participate in the market.

2.5 THE PSYCHOLOGY OF STOCK MARKET PATICIPANTS:

Understanding the psychology of the participants is the key to knowing how they will behave when they are gripped by fear and greed. He who understands this psychology is able to manipulate the markets by using the different participants at different times. Now lets see what each one wants from the markets. Government: At this point when the world has become a global village and each country wants to attract foreign capital, governments need booming markets. Stock markets are the

barometer of an economy. They send positive signals to foreign investors when they are in a bull phase. Booming stock markets create confidence and spur the governments to go ahead with their economic policies. No government likes depressed stock markets. Regulator: Appointed by the government, the regulator also like booming stock markets. A rising market is evidence of good governance. It also results in additional revenue in the form of higher transaction and service charges due to the increase in turnover. Stock Exchanges: They facilitate stock transactions. During boom periods, incomes skyrocket by way of transaction charges from brokers, listing fees, etc. Brokers: In a bull markets the clientele increases and so do business opportunities. This results in higher incomes for the brokers. Banks : Their business increases with soaring stock markets as opportunities open up in lending against stocks, margin trading, depository and custodial business, etc. The feel good factor drives investors to banks for various financial services. Companies: Rising markets lead to higher stock prices. The net worth of owners increase and companies can mop up more capital for expansions. Financially healthy companies are able to attract and retain good talent, and keep their shareholders happy. Mutual funds: Higher Stock price means increased net asset values. Rising markets attract more investors which mean more money under management, and higher asset management fees. They are also able to come out with different kinds of funds to satisfy every requirement.

Media: The media plays a pivotal role in spreading information. An increase in investors means increased viewers/readers, which translates into increased advertisement revenue.

Investors: The lure of quick money draws investors in a bull market. Day traders become very active as they are rewarded with easy gains.

Operators: He is the smartest and shrewdest of all. He is aware that the Bull Run psychology creates the Bull Run. He knows the system, he understands the psychology of the participants, and he has the ability to exploit that for his own benefit. He is the kingmaker who uses his knowledge to win over investors, brokers and company management.

CHAPTER III
INVESTORS
A person who makes investments A person whose principal purpose is to invest money prudently and productively over the longer term with the investment objectives being achievement of a reasonable return and capital appreciation to preserve purchasing power. Many people find investing risky because they are not in control of one or more of these ten investor controls. However, investor may gain some insights on how he can gain greater control as an investorespecially control number 7, the control over entity, timing, and characteristics. This is where many investors lack control, need more control, or simply lack any basic understanding about investing.

3.1 THE TEN INVESTOR CONTROLS:

1. The control over yourself 2. The control over income/expense asset/liability ratios 3. The control over the management of the investment 4. The control over taxes 5. The control over when you buy and when you sell 6. The control over brokerage transactions 7. The control over the ETC (entity, timing, and characteristics) 8. The control over the terms and conditions of the agreements 9. The control over access to information 10. The control over giving it back, philanthropy, redistribution of wealth.

3.2 TYPES OF INVESTORS:

The Accredited Investor: The accredited investor is someone with high income or high net worth. A long-term investor who has chosen to invest for security and comfort may very well qualify as an accredited investor. If you can qualify as an accredited investor, you will have access to investments that most people do not. To be successful in choosing your investments, however, you still need financial education. If you choose not to invest your time in your financial education, you should turn your money over to competent financial advisors who can assist you with your investment decisions. The Qualified Investor The qualified investor understands how to analyze publicly traded stock. This investor would be considered an outside investor as opposed to an inside investor. Generally, qualified investors include stock traders and analysts. Here, we define qualified investor as a person who has money as well as some knowledge about investing. A qualified investor is usually an accredited investor who has also invested in financial education. As it relates to the stock market, for example, he said qualified investors would include most professional stock traders. Through their education, they have learned and understand the difference between fundamental investing and technical investing. Investor: 1. The control over yourself 2. The control over income/expense asset/liability ratios 5. The control over when you buy and when you sell The Investor Controls Possessed by the Qualified

 The sophisticated investor The sophisticated investor typically has all three Es. In addition, the sophisticated investor understands the world of investing. He or she utilizes the tax, corporate, and securities laws to maximize both earnings and to protect the underlying capital. If you want to become a successful investor but do not wish to build your own business to do so, your goal should be to become a sophisticated investor. From the sophisticated investor on, these investors know that there are two sides of the coin. They know that on one side of the coin, the world is a world of black and white and they also know that the other side of the coin is a world of different shades of gray. It is a world where you definitely do not want to do things on your own. On the black and white side of the coin, some investors can invest on their own. On the gray side of the coin, an investor must enter with their team. Investor: 1. The control over yourself 2. The control over income/expense and asset/liability ratios 3. The control over taxes 4. The control over when you buy and when you sell 5. The control over brokerage transactions 6. The control over the E-T-C (entity, timing, characteristic). The Investor Controls Possessed by the Sophisticated

CHAPTER IV
INVESTING
Investing is not risky; not being in control is risky. 4.1 WHAT IS INVESTING?
The money you earn is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle you may like to use savings in order to gat return on it in the future. This is called investment. There are many different ways you can go about making an investment. This includes putting money into stocks, bonds, mutual funds, or real estate (among many other things), or starting your own business. Sometimes people refer to these options as "investment vehicles," which is just another way of saying "a way to invest." Each of these vehicles has positives and negatives, which we'll discuss in a later section of this tutorial. The point is that it doesn't matter which method you choose for investing your money, the goal is always to put your money to work so it earns you an additional profit. Even though this is a simple idea, it's the most important concept for you to understand.

4.2 THREE WAYS OF INVESTING:

There are three ways by which an investor can invest to achieve superior results. One is Intellectually Difficult, the second is Physically Difficult and the third is Emotionally Difficult Path. The Intellectually Difficult Path: This path is pursued by those who have a profound understanding of investing, can see future trends clearly, and can comprehend business and the environment. They know that patience is a virtue and therefore take long-term positions. This method is all about the cash flow approach. It is the most difficult path as it requires a keen mind of study the different concepts of investing how different businesses work, and how economic policies and market forces affect the business environment. A good grasp of the various fields of management is required to understand organisations and their ability to capitalize on various business opportunities. A good knowledge of the field of liberal arts is basic to the development of various investment concepts. Here the name of the game is patience. Such investors are always on the lookout for good opportunities and bargain prices. As long-term investors, they are willing to wait for them. They are not perturbed by events, news, rumours and gossip that create shortterm volatilities. They have a strong belief in their abilities and, since their goal is investing long-term for cash flows as against capital gains, they are in no hurry to invest. They strongly believe that opportunities are always there but that when the biggest of them come, one must have the money to invest. They are therefore, very careful about allocating resources. They never buy on impulse. They can be out of the market for months, even years. They have the patience to wait till the right moment. Brokers usually do not like such investors as they do not churn their portfolios regularly. Intellectual investors as they do not churn their portfolios regularly. Intellectual investors are also emotionally strong. That is the reason they are able to exercise such restraint. We all want to be such investors but we cannot, as we believe that we are not all as intellectually blessed as they are. This is a wrong notion. The reason they are intellectually capable is because they work hard and make the effort to reach that stage. They constantly explore opportunities by talking with managements, examining different

viewpoints on business, trying to understand economic policies and its effect on business environment, etc. Their intellectual capability is derived from their hard work and their strong belief in the long-term approach to investments. Moreover, they use common sense in their judgments and are not swayed by rumors. The Physically Difficult Path: Most people are deeply involved in the physically difficult way of beating the markets. They come early to the office and stay late. They do not know what their children are doing as they dont have time for them. They choose work over the family. They carry with them all the newspapers to read whenever time permits. They are always busy with the breakfast meetings, more luncheon meetings and even more dinner meetings. Their talk revolves round finding the next best investment opportunity to make money. They visit companies and plants and talk with the management. They keep in touch with a number of brokers as they believe it will increase their efficiency in the stock markets. They are overloaded with information. They are constantly on the telephone making calls and receiving more calls though most of the time the answering machine takes the calls. They continuously monitor stock price movements. At the office they scan their terminals and the CNBC news for market movements and at home they keep tabs on the BSE and NSE. They carry home huge reports to read before the next day. When they are on the move, they are busy on their mobile phones. Market gossip excites them and they make decisions based on rumors. News regarding political developments, monsoon forecasts, inflation figures, change in a ministers portfolio, and GDP growth figures play an important role in their lives. They tend to time the markets on such news. In every way they expend tremendous physical energy and effort to beat the market by outmaneuvering the competition. But they dont realize that others are also doing the same. My experience in the stock market dealing with fund managers has been really amusing. They sincerely believe that keeping themselves busy this way makes them look important and increases their ability to pick up the winners. Once I was at the office of a fund manager and we were chatting informally. The telephone rang but he did not answer

it. After a couple of rings, the call went to the answering machine. This is how most of them behave. Show the world they are busy. The day traders also take the physically difficult path of investing. They spend the entire day collecting information and make decisions based on that information. So, with all the fund managers and the day traders treading the same path, how can any one of them achieve better results??? Good opportunities come once in a while and you spot them only when you are cool and have the time to think. The physically difficult path is based on the assumption that there are a lot of opportunities out there and you have to keep digging hard to be successful at investing. The current volatility in the markets is the result of too many people trying to invest by this method. Life is simple. We make it complicated.

The Emotionally Difficult Path: Most of us may find the intellectually and the physically difficult path too daunting. In that case we could opt for what is called the emotionally difficult path. Actually, this path is very straightforward. Simply work out a long-term investment policy that is right for you and be committed to it. This how you do it. When your friends or your broker tell you about a great investment opportunity and they say it is a great time to buy, dont buy. When the newspapers report big investment opportunities, be wary of such news. When your neighbours tell of how the stock markets have made them rich in the last couple of months, dont be tempted. When you banker offers credit facility against your shares to buy more shares, stay calm and unconcerned. When analysts on TV tell you that the market is going to crash and the stock prices will nose dive, dont sell. When newspapers report a bear phase and tell you to liquidate portfolio, dont sell. When your neighbors exit the stock markets, dont follow them. When you broker tells you to sell as he sees bad times ahead do not listen to his

advice and sell. Emotional discipline is the most difficult. It is not easy to control your emotions and go against the herd. But you need to believe in yourself and the investment policy to which you are committed. It often pays to go against popular opinion. The emotionally difficult path like the intellectually difficult pay lays stress on the virtue of patience. Both are based on the view that the long-term approach to investments is the only strategy that can enrich investors and increase their wealth. The stress is on the cash flow approach. Patience focuses an investors attention on the goal of compounding money over a long period. It can be magic even when the rate is modest. To give an example: If one were to compound money at a modest rate of seven percent the money would double at the end of 10 years and it would be 16 times at the end of 40 years. Patience also helps you to control transaction costs. The more you churn your portfolio the more you pay the broker in terms of taxes of brokerage and off course the government in terms of taxes on your capital gains. All these costs could be avoided if one has patience. The emotionally difficult path requires an understanding of how our emotions guide our decision-making especially when we deal with money. Our emotions directly affect our decisions on investments and expenditure. We have to learn to think with our emotions rather than have our emotions do the thinking. Understanding our own anomalies as also that of others will help us become better investors. 4.3 INVESTING DIVERSIFICATION OR CONCENTRATION: The basic logic for diversifying one's portfolio is,

"Do not put all your eggs in one basket." Since Diversification reduces the risk.
This theory has a solid foundation behind it. For example, if an investor decides to invest only in steel stocks, he or she is putting himself/herself at risk at times when the steel cycle starts to turn down. Now, keeping track of such trends is no easy task, and even the most seasoned of industry veterans have got it wrong occasionally. Thus, there is a case to invest in stocks across

sectors, so that in case of a downturn in any one sector, the performance of stocks from other sectors would make up for the losses suffered in that sector. Let us understand the basic rationale for diversification. It is to reduce risk. Now, there are 2 types of risks - systematic and unsystematic. Systematic risk is that which impacts all sectors and companies, and, thus, cannot be diversified. Examples of such risks include events such as 9/11, an attack on an important crude pipeline, changes in political leadership, geopolitical risks and government policies. On the other hand, unsystematic risk is a risk that is specific to a particular company, such as a strike by factory workers for Hero Honda, or a Fire at Bombay high for ONGC. Therefore diversification of a stock portfolio serves the purpose of reducing the unsystematic risk of that portfolio. As a result, a major purpose of diversification is 'optimizing' returns (as opposed to maximizing returns, which might involve a higher level of risk). One must understand that returns can never be de-linked from risk they are never mutually exclusive and always co-exist. ...and against! On the other hand, by not diversifying the stock portfolio, rather concentrating it towards a few stocks, an investor can (still) get higher returns. Of course, as mentioned above, such a strategy would more likely than not involve a higher degree of risk. For example, an investor decides to tilt his or her stock portfolio towards software stocks. Now, while the software sector undoubtedly has strong growth prospects, taking a call on which stock to invest in to outperform the benchmark index is a none-too-easy task for a retail investor, who might not have the time to study the stocks, their business models, management teams and future prospects. Therefore, in order to execute such a focused investment strategy, an investor must have the ability to spot trends in his or her sector of interest, and time it accordingly.

CHAPTER V
GUIDE TO STOCK-PICKING STRATEGIES
5.1 INTRODUCTION: When it comes to personal finance and the accumulation of wealth, few subjects are more talked about than stocks. It's easy to understand why: the stock market is thrilling. But on this financial rollercoaster ride, everyone wants to experience the ups without the downs. Here, investor will find some of the most popular strategies for finding good stocks (or at least avoiding bad ones). In other words, investor will see the art of stock picking selecting stocks based on a certain set of criteria, with the aim of achieving a rate of return that is greater than the market's overall average. Before exploring the vast world of stock-picking methodologies, investor should address a few misconceptions. Many investors new to the stock-picking scene believe that there is some infallible strategy that, once followed, will guarantee success. There is no foolproof system for picking stocks! This doesn't mean investor can't expand his wealth through the stock market. It's just better to think of stock-picking as an art rather than a science. There are a few reasons for this: 1. So many factors affect a company's health that it is nearly impossible to construct a formula that will predict success. It is one thing to assemble data that investor can work with, but quite another to determine which numbers are relevant. 2. A lot of information is intangible and cannot be measured. The quantifiable aspects of a company, such as profits, are easy enough to find. But how do investors measure the qualitative factors, such as the company's staff, its competitive advantages, and its reputation and so on? This combination of tangible and intangible aspects makes picking stocks a highly subjective, even intuitive process.

3. Because of the human (often irrational) element inherent in the forces that move the stock market, stocks do not always do what you anticipate they'll do. Emotions can change quickly and unpredictably. And unfortunately, when confidence turns into fear, the stock market can be a dangerous place. The bottom line is that there is no one way to pick stocks. Better to think of every stock strategy as nothing more than an application of a theory - a "best guess" of how to invest. And sometimes two seemingly opposed theories can be successful at the same time. Perhaps just as important as considering theory, is determining how well an investment strategy fits investor personal outlook, time frame, risk tolerance and the amount of time investor want to devote to investing and picking stocks. At this point, investor may be asking why stock-picking is so important. Why worry so much about it? Why spend hours doing it? The answer is simple: wealth. If investor becomes a good stock-picker, he can increase his personal wealth. Without further ado, let's start by delving into one of the most basic and crucial aspects of stock-picking: fundamental analysis, whose theory underlies all of the strategies explore here. Although there are many differences between each strategy, they all come down to finding the worth of a company. 5.2 FUNDAMENTANALYSIS: Ever hear someone say that a company has "strong fundamentals"? The phrase is so overused that it's become somewhat of a clich. Any analyst can refer to a company's fundamentals without actually saying anything meaningful. So here we define exactly what fundamentals are, how and why they are analyzed, and why fundamental analysis is often a great starting point to picking good companies. The Theory: Doing basic fundamental valuation is quite straightforward; all it takes is a little time and energy. The goal of analyzing a company's fundamentals is to find a stock's intrinsic value; a fancy term for what investor believes a stock is really worth - as opposed to the value at which it is being traded in the marketplace. If the intrinsic value is more than

the current share price, investors analysis is showing that the stock is worth more than its price and that it makes sense to buy the stock. Although there are many different methods of finding the intrinsic value, the premise behind all the strategies is the same: a company is worth the sum of its discounted cash flows. In plain English, this means that a company is worth all of its future profits added together. And this which the Rs.1 investor receives in a years time is worth less than Rs.1 you receive today. The idea behind intrinsic value equaling future profits makes sense if investor thinks about how a business provides value for its owner(s). If investor has a small business, its worth is the money he can take from the company year after year (not the growth of the stock). And he can take something out of the company only if he have something left over after he pay for supplies and salaries, reinvest in new equipment, and so on. A business is all about profits, plain old revenue minus expenses - the basis of intrinsic value. 5.3 QUALITATIVE ANALYSIS: Fundamental analysis has a very wide scope. Valuing a company involves not only crunching numbers and predicting cash flows but also looking at the general, more subjective qualities of a company. Here investor will look at how the analysis of qualitative factors is used for picking a stock. Management: The backbone of any successful company is strong management. The people at the top ultimately make the strategic decisions and therefore serve as a crucial factor determining the fate of the company. To assess the strength of management, investors can simply ask the standard five Ws: who, where, what, when and why? Who? Do some research, and find out who is running the company. Among other things, you should know who its CEO, CFO, COO and CIO (chief information officer) are. Then you can move onto the next question.

Where?

Investor need to find out where these people come from, specifically, their educational and employment backgrounds. Investor should ask himself if these backgrounds make the people suitable for directing the company in its industry. What and When? What is the management philosophy? In other words, in what style do these people intend to manage the company? Investor can discern the style of management by looking at its past actions or by reading the annual reports MD&A section. Investor should ask himself if he agrees with this philosophy, and if it works for the company, given its size and the nature of its business. Once investor knows the style of the managers, find out when this team took over the company. If a company is doing poorly, one of the first actions taken is management restructuring, which is a nice way of saying "a change in management due to poor results". If investor sees a company continually changing managers, it may be a sign to invest elsewhere. Why? A final factor to investigate is why these people have become managers. Look at the manager's employment history, and try to see if these reasons are clear. Does this person have the qualities investor believe are needed to make someone a good manager for this company? Industry/Competition: Aside from having a general understanding of what a company does, investor should analyze the characteristics of its industry, such as its growth potential. A mediocre company in a great industry can provide a solid return, while a mediocre company in a poor industry will likely take a bite out of your portfolio. Brand Name: A valuable brand reflects years of product development and marketing. Take for example the most popular brand name in India: Reliance. Many estimate that the

intangible value of Reliance brand name is in the billions of rupees! Massive corporations such as HLL rely on hundreds of popular brand names. Having a portfolio of brands diversifies risk because the good performance of one brand can compensate for the underperformers.

5.4 VALVE INVESTINS: Value investing is one of the best known stock-picking methods. In the 1930s, Benjamin Graham and David Dodd, finance professors at Columbia University, laid out what many consider to be the framework for value investing. The concept is actually very simple: find companies trading below their inherent worth. The value investor looks for stocks with strong fundamentals - including earnings, dividends, book value, and cash flow - that are selling at a bargain price, given their quality. The value investors seek companies that seem to be incorrectly valued (undervalued) by the market and therefore have the potential to increase in share price when the market corrects its error in valuation. Value, Not Junk!: Value investing doesn't mean just buying any stock that declines and therefore seems "cheap" in price. Value investors have to do their homework and be confident that they are picking a company that is cheap given its high quality. Buying a Business, Not a Stock: Investor should emphasize that the value investing mentality sees a stock as the vehicle by which a person becomes an owner of a company - to a value investor profits are made by investing in quality companies, not by trading. Because their method is about determining the worth of the underlying asset, value investors pay no mind to the external factors affecting a company, such as market volatility or day-to-day price fluctuations. These factors are not inherent to the company, and therefore are not seen to have any effect on the value of the business in the long run.

 The Margin of Safety: A discussion of value investing would not be complete without mentioning the use of a margin of safety, a technique which is simple yet very effective. Consider a reallife example of a margin of safety. Say you're planning a pyrotechnics show, which will include flames and explosions. You have concluded with a high degree of certainty that it's perfectly safe to stand 100 feet from the center of the explosions. But to be absolutely sure no one gets hurt, you implement a margin of safety by setting up barriers 125 feet from the explosions. Value investing is not as sexy as some other styles of investing; it relies on a strict screening process. But just remember, there's nothing boring about outperforming the S&P by 13% over a 40-year span! 5.5 GROWTH INVESTING: In the late 1990s, when technology companies were flourishing, growth investing techniques yielded unprecedented returns for investors. But before any investor jumps onto the growth investing bandwagon, s/he should realize that this strategy comes with substantial risks and is not for everyone. Value v/s Growth: The best way to define growth investing is to contrast it to value investing. Value investors are strictly concerned with the here and now; they look for stocks that, at this moment, are trading for less than their apparent worth. Growth investors, on the other hand, focus on the future potential of a company, with much less emphasis on its present price. Unlike value investors, growth investors buy companies that are trading higher than their current intrinsic worth - but this is done with the belief that the companies' intrinsic worth will grow and therefore exceed their current valuations. As the name suggests, growth stocks are companies that grow substantially faster than others. Growth investors are therefore primarily concerned with young companies. The theory is that growth in earnings and/or revenues will directly translate into an increase in the stock price. Typically a growth investor looks for investments in rapidly expanding industries especially those related to new technology.

 No Automatic Formula: Growth investors are concerned with a company's future growth potential, but there is no absolute formula for evaluating this potential. Every method of picking growth stocks (or any other type of stock) requires some individual interpretation and judgment. Growth investors use certain methods - or sets of guidelines or criteria - as a framework for their analysis, but these methods must be applied with a company's particular situation in mind. More specifically, the investor must consider the company in relation to its past performance and its industry's performance. The application of any one guideline or criterion may therefore change from company to company and from industry to industry. 5.6 INCOME INVESTING: Income investing, which aims to pick companies that provide a steady stream of income, is perhaps one of the most straightforward stock-picking strategies. When investors think of steady income they commonly think of fixed-income securities such as bonds. However, stocks can also provide a steady income by paying a solid dividend. Here we look at the strategy that focuses on finding these kinds of stocks. Who Pays Dividends? Income investors usually end up focusing on older, more established firms, which have reached a certain size and are no longer able to sustain higher levels of growth. These companies generally no longer are in rapidly expanding industries and so instead of reinvesting retained earnings into themselves (as many high-flying growth companies do), mature firms tend to pay out retained earnings as dividends as a way to provide a return to their shareholders. Thus, dividends are more prominent in certain industries. Utility companies, for example, have historically paid a fairly decent dividend, and this trend should continue in the future. Dividend Yield:

Income investing is not simply about investing in companies with the highest dividends (in dollar figures). The more important gauge is the dividend yield, calculated by dividing the annual dividend per share by share price. This measures the actual return that a dividend gives the owner of the stock. For example, a company with a share price of Rs.100 and a dividend of Rs.6 per share has a 6% dividend yield, or 6% return from dividends. The average dividend yield for companies in the S&P 500 is 2-3%.

Dividends Are Not Everything: You should never invest solely on the basis of dividends. Keep in mind that high dividends don't automatically indicate a good company. Because they are paid out of a company's net income, higher dividends will result in lower retained earnings. Stock Picking, Not Fixed Income: Something to remember is that dividends do not equal lower risk. The risk associated with any equity security still applies to those with high dividend yields, although the risk can be minimized by picking solid companies.

5.7CANSLIM:
CANSLIM is a philosophy of screening, purchasing, and selling common stock. Developed by William O'Neil, the co-founder of Investor's Business Daily, it is described in his highly recommended book "How to Make Money in Stocks". The name may suggest some boring government agency, but actually this stands for a very successful investment strategy. What makes CANSLIM different is its attention to tangibles such as earnings, as well as intangibles like a company's overall strength and ideas. The best thing about this strategy is that there's evidence that it works: there are countless examples of companies that, over the last half of the 20th century, met CANSLIM criteria before increasing enormously in price. In this section we explore each of the seven components of the CANSLIM system. C = Current Earnings:

ONeil emphasizes the importance of choosing stocks whose earnings per share (EPS) in the most recent quarter have grown on a yearly basis. For example, a companys EPS figures reported in this years April-June quarter should have grown relative to the EPS figures for that same three-month period one year ago. (If you're unfamiliar with EPS, see Types of EPS.)

A = Annual Earnings: CANSLIM also acknowledges the importance of annual earnings growth.

The system indicates that a company should have shown good annual growth (annual EPS) in each of the last five years. N = New: ONeils third criterion for a good company is that it has recently undergone a change, which is often necessary for a company to become successful. Whether it is a new management team, a new product, a new market, or a new high in stock price. S = Supply and Demand: The S in CANSLIM stands for supply and demand, which refers to the laws that govern all market activities. L = Leader or Laggard: In this part of CANSLIM analysis, distinguishing between market leaders and market laggards is of key importance. In each industry, there are always those that lead, providing great gains to shareholders, and those that lag behind, providing returns that are mediocre at best. The idea is to separate the contenders from the pretenders. I = Institutional Sponsorship:

CANSLIM recognizes the importance of companies having some institutional sponsorship. Basically, this criterion is based on the idea that if a company has no institutional sponsorship, all of the thousands of institutional money managers have passed over the company. CANSLIM suggests that a stock worth investing in has at least three to 10 institutional owners. M = Market Direction: The final CANSLIM criterion is market direction. When picking stocks, it is important to recognize what kind of a market you are in, whether it is a bear or a bull. Although ONeil is not a market timer, he argues that if investors dont understand market direction, they may end up investing a trend and thus compromise gains or even lose significantly. Against the Daily Prices and Volumes CANSLIM is great because it provides solid guidelines, keeping subjectivity to a minimum. Think of it as a combination of value, growth, fundamental, and even a little technical analysis. 5.8 TECHNICAL ANALYSIS: Technical analysis is the polar opposite of fundamental analysis, which is the basis of every method. Technical analysts, or technicians, select stocks by analyzing statistics generated by past market activity, prices and volumes. Sometimes also known as chartists, technical analysts look at the past charts of prices and different indicators to make inferences about the future movement of a stock's price. Picking Stocks with Technical Analysis: Technicians have a very full toolbox. They literally have hundreds of indicators and chart patterns to use for picking stocks. However, it is important to note that no one indicator or chart pattern is infallible or absolute; the technician must interpret indicators and patterns, and this process is more subjective than formulaic.

5.9 EYE ON THE ABOVE STRATEGIES: Let's run through a quick recap of the foundational concepts that are already covered in the above well-known stock-picking strategies and techniques: Most of the strategies discussed in this tutorial use the tools and techniques of fundamental analysis, whose main objective is to find the worth of a company, or its intrinsic value. In quantitative analysis, a company is worth the sum of its discounted cash flows. In other words, it is worth all of its future profits added together. Some qualitative factors affecting the value of a company are its management, business model, industry and brand name. Value investors, concerned with the present, look for stocks selling at a price that is lower than the estimated worth of the company, as reflected by its fundamentals. Growth investors are concerned with the future, buying companies that may be trading higher than their intrinsic worth but show the potential to grow and one day exceed their current valuations. The GARP strategy is a combination of both growth and value: investors concerned with 'growth at a reasonable price' look for companies that are somewhat undervalued given their growth potential. Income investors, seeking a steady stream of income from their stocks, look for solid companies that pay a high but sustainable dividend yield. CANSLIM analyzes these factors of companies: current earnings, annual earnings, new changes, supply and demand, and leadership in industry, institutional sponsorship, and market direction.

 Technical analysis, the polar opposite of fundamental analysis, is not concerned with a stock's intrinsic value, but instead looks at past market activity to determine future price movements.

CHAPTER VI
INVESTMENT STRATEGIES
The components of most investment strategies include asset allocation, buy and sell guidelines, and risk guidelines. Investment strategies can differ greatly from a rapid growth strategy where an investor focuses on capital appreciation to a safety strategy where the focus is on wealth protection. The most important part of an investment strategy is that it aligns with the individual's goals and is closely followed by the investor. 6.1 A GOOD STRATEGY: There is nothing wrong in speculation as such. On the contrary it is beneficial in two ways. Firstly, without speculation untested new companies like Infosys, Satyam, and in earlier times companies like Reliance, would never have been able to raise the necessary capital for expansion. The tempting chance of a huge gain is the grease that lubricates the machinery of innovation. Secondly, the risk is exchanged every time the stock is sold and bought, but it is never eliminated. When the buyer buys a stock he takes the primary risk that the stock will go down. However, the seller still retains the residual risk of the chance that the stock he sold may go up. However, speculating can go wrong, if people: Do not understand the difference between investing and speculating, Speculate without the right knowledge and skill, Speculate beyond the capacity to take a loss (that is called margin trading). The greatest problem today is that most investors are acquiring speculative habits believing that they are investing. The attraction of quick money and the advent of the futures market have lured them to margin trading. For a number of people, this has become a full-time occupation due to the advent of the Internet and online trading. This could be bad news especially when they are dealing with their life savings.

 Nothing is Right or Wrong: This conclusively proves a few points namely: Long-term investing can be very rewarding if you buy the right company at the right price, A stock can decline significantly in the short run and yet give a decent long-term return, Short-term investing (speculation) can also be very rewarding if you are able to time the markets and take advantage of short-term volatility. 6.2 MONEY-MAKING STRATEGIES: A strategy is a plan that helps you determine what stocks to buy Or sell. If you are new to the stock market, its best to keep an open mind before choosing a strategy. If a particular strategy seems to make sense to you, take the time to do more research. It can take a long time before you find an investment strategy that not only makes sense but also increases the value of your portfolio. Keep in mind that you arent limited to only one strategy. Some investors and traders use a variety of strategies, whereas others are comfortable using only one. No matter what strategy you use, here are a few things you should remember: 1. A strategy is only as good as the person using it. In other words, no matter how brilliant and ingenious the strategy, you can still lose money. 2. Not all strategies work during all market conditions. 3. Dont become so devoted to a strategy that you are blind to the fact that you are losing money. Money is the scorecard that determines whether your strategy is working.

You have to take the time to find the strategy or strategies that fit your personality and lifestyle. Unfortunately, there are no magic answers to finding success in the stock market. Buy and Hold: The Most Popular Strategy for Investors: The reasoning behind the buy-and-hold strategy is that if you buy a stock in a fundamentally sound company and holds it for the long term (at least a year), youll realize a profit. The beauty of a buy-and-hold strategy is that you can buy a stock and watch it rise in price without having to constantly watch the market. Investors who bought companies like Infosys, TCS, and RELIANCE in the early days made huge sums of money on paper without having to pay much attention to the market. The other advantage of buy and hold is that because you are not constantly buying and selling stocks, you are paying very little in brokers commissions. Buy and hold is the easiest investment strategy to use, and, in retrospect, it worked extremely well during the bull market. Buy on the Dip: An Offshoot of Buy and Hold: In this strategy, when a stock goes down in price, especially if it believes the decline is only temporary, people buy more shares. The idea is that because the market always goes up over time (or generally has in the past); the shares bought at a lower price will eventually be worth more. People who used this strategy in the past made tons of money as the shares they bought kept going higher. Momentum Investing: Buy High and Sell Higher: Momentum investors are growth investors who look for stocks that are ready to make explosive moves upward. They buy stocks at a high price but plan to sell them at an even higher price. They dont care too much about the price they paid as long as the stock goes higher. Momentum investing works best during bull markets when there is a lot of liquidity. In the 2000s, it seemed as if no matter which stock you boughtespecially if an Internet stock the stock would go higher was.

Some critics call momentum investing the greater fool theory, which means that no matter how high the stock price is, you will always be able to find a bigger fool who is willing to buy it from you. Momentum investors tend to use technical analysis to look for stocks that will make sudden and dramatic moves in a short period. Day Trading: Buying and Selling in Minutes: Unlike investors, who may wait years before selling, day traders buy and sell within seconds, minutes, or hours. Day trading is an extreme trading strategy that involves constantly moving into and out of stocks. Using technical analysis, professional day traders try to anticipate where a stock will go in the near future and trade accordingly. Usually, day traders sell all their stocks and move to cash by the end of each day. 6.3 SIMPLE INVESTMENT STRATEGY:- INVEST IN IPOS: With more and more companies coming out with tempting IPO or additional offers, there is greater need to exert caution and pick the best IPO investments. Four critical factors to be studied in an IPO offer document, before making an IPO investment. In such a scenario it is but natural for the euphoria to pass on to the primary market. We have more and more companies coming out with IPOs or additional offers. And predictably enough, these issues have generated huge interest amongst the investors and raised thousands of crores. One good thing about the IPO market vis--vis the earlier times has been that most of them have been from good companies and at reasonable prices. This trend, however, seems to be tapering off and we are increasingly seeing public issues from the relatively not-so-good or known companies and at fairly stretched prices. Therefore, it becomes necessary for the investors to become cautious and be more selective about their investments in IPOs. The four critical factors which need to studied in an offer document when making an investment decision are Promoter, Performance, Prospects and Price.

 Check promoter standing: This is the most important factor in any investment decision. A good promoter or management team is important for any business success, especially over long periods. While businesses may have their ups and downs, a good management will take all necessary steps to ensure profitable performance. Secondly, they would be constantly looking at new business opportunities, thereby ensuring regular growth in the company. Thirdly, we are reasonably certain that the company money will not be deliberately misused or siphoned off to the detriment of the shareholders. Therefore, look at the promoters background, the experience he has in the industry, the performance of the other companies promoted by him, his track record, investor complaints etc. Study company performance; The share price is the reflection of the operational performance of the company. Poor numbers say the sales, profit; EPS etc. would mean poor performance on the stock exchange. Therefore, it is important that the company has a track record of good operational performance. Understand future prospects: The future prospects of the Company and the industry would play an important role in the performance of the scrip on the stock exchange. Check the objects. How will they impact the future prospects? How will the funds raised be utilized? Will it additionally benefit the company? Is the money being raised for a new project, which will add to the bottom-line of the company? If its an offerfor-sale, it means the existing shareholders are selling a part of their stake in the Company. The amounts raised from the issue will not go to the Company. Therefore, the Company will not benefit from an offer for sale. If the purpose of the issue is to list the company on the stock exchange and the 4 Ps are positive, then one can consider investing. Look at the price:

Finally of course every product/scrip has a right price based on its fundamentals and industry prospects. Even if the above 3 Ps were favorable, a high price is likely to reduce the prospects of appreciation at the exchange, thereby defeating your purpose of investing. Look at the average industry PE and the companies EPS and try and estimate the fair price. Compare this with the issue price to see if it is undervalued or overvalued. Buy value nor price.

CHAPTER VII
BEHAVIOURAL FINANCE
7.1 CONVERSATION WITH STOCK INESTOR: If u ask a simple question to a stock investor, what is your objective of stock investment? who showed interest in knowing the stock market. Quick came the reply, I want to make money as soon as possible. Firstly, making money has never been so simple and secondly when we talk of Stock Investment, many people stick to stock and forget the word investment. Stocks or equity is one of the asset classes like savings instruments, funds, commodities and real estate for investment. Now turning focus back to stocks, this is a question to a group of people with common interest that is stock investment is an art or a science? and got varied answers. It involves ratios, numbers, calculations, so it is a science. Picking the right time to sell and buy is an art. But in a nutshell, it is a combination of both science and art. At a micro level, details of the company finance, balance-sheet, and cash flow, ratios is science. At the macro level, to understand the global scenarios, market sentiments and trends, supply/demand, interest rates and possess enough knowledge to join all the points to get the right picture and build the conviction to make up mind to buy or sell or to have patience not to buy or sell is an art. When a common person builds interest in stock markets, the first question asked is How much investment investor should start with to realize good returns? The first thing to remember is that return is relative to many factors. It is relative to the duration that youve held the stock and relative to the risk you have taken. So the most important thing before entering is a proper homework and build confidence, it does not matter how much you invest. The next common comment is Investor got only Rs 50 return for the Rs1000, investor invested, and investor was expecting more. To start with one should understand that rate of return is not relative the amount you invest. If a stock yields a return

of 5% for Rs 1,000 will also yield the same 5 per cent for Rs10, 000. So never measure the return in absolute terms but in Percentages. 7.2 CLASSICAL ECONOMIC THEORY

V/S BEHAVIOURAL ECONOMIC THEORY:

The Classical Economic Theory talks about efficiency of the markets and people making rational decisions to maximize their profits. It assumes that the markets are efficient and no one can take advantage of its movements. It also assumes that humans are rational beings and will act to maximize their gains. However behavioral economists believe that the markets are inefficient and human beings are not rational beings. Consider this example. If you and I were walking down a busy street in Colaba and you said saw a Rs. 5 coin on the road, I would say its impossible. So many people walk this road and the markets being efficient someone would have definitely picked it up. But in reality we do come across such instances. This shows that the markets are not as efficient as they seem to be. Further, if we assume that people make rational decisions to maximize profits then how do we explain people giving to charities or throwing a party to celebrate a birthday or an anniversary? Definitely this is not about maximizing profits by rational people. Behavioral finance researchers seek to bridge the gap between classical economics and psychology to explain how and why people and markets do what they do. Behavioral finance raises a couple of important issues for investors. The first is whether or not it is possible to systematically exploit Irrational market behavior when it occurs. The second issue is how to avoid making sub-optimal decisions as an investor. The goal is to close the gap between how we actually make decisions and how we should make decisions.

 Investor:

In the stock markets, Behavioral finance explains why

Hold on stocks that are crashing; Sell Stocks that are rising; Ridiculously overvalue and undervalue stocks; Jump in late and busy stocks that have peaked in a Take desperate risks and gamble wildly when our Avoid taking the reasonable risk of buying promising Never find the right price to buy and sell stock; Buy when we have to sell and sell when we should Buy because others are buying and sell because

rally just before the price declines; stocks fall; stocks unless there is an absolutely assured profit; be buying; others are selling. Psychology can play a strategic role in the financial markets, a fact that is being increasingly recognized. Students and proponents of behavioural finance create investment strategies that capitalize on irrational investor behaviour. They seek to identify market conditions in which investors are likely to overreact or under react to new information. These mistakes cause under priced or overpriced securities. The goal of behavioural finance strategy is to invest in or disinvest from these securities before most investors recognize their error, and to benefit from the subsequent jump or fall in prices once they do.

7.3 UNDERSTANGING INVESTOR BEHAVIOUR:

When it comes to money and investing, Investor is not always as rational as they think they are - which is why there's a whole field of study that explains investorsstrange behavior. Let us look where an investor, fits in? Insight into the theory and findings of behavioral finance. Regret Theory: Fear-of-regret, or simply regret, theory deals with the emotional reaction people experience after realizing they've made an error in judgment. Faced with the prospect of selling a stock, investors become emotionally affected by the price at which they purchased the stock. So, they avoid selling it as a way to avoid the regret of having made a bad investment, as well as the embarrassment of reporting a loss. We all hate to be wrong, don't we? What investors should really ask them when contemplating selling a stock is, "What are the consequences of repeating the same purchase if this security were already liquidated and would I invest in it again?" If the answer is "no", it's time to sell; otherwise, the result is regret of buying a losing stock and the regret of not selling when it became clear that a poor investment decision was made - and a vicious cycle ensues where avoiding regret leads to more regret. Regret theory can also hold true for investors who find a stock they had considered buying but did not went up in value. Some investors avoid the possibility of feeling this regret by following the conventional wisdom and buying only stocks that everyone else is buying, rationalizing their decision with "everyone else is doing it". Oddly enough, many people feel much less embarrassed about losing money on a popular stock that half the world owns - like Reliance and Infosys - than about losing on an unknown or unpopular stock. Mental Accounting: Humans have a tendency to place particular events into mental compartments, and the difference between these compartments sometimes impacts our behavior more than the events themselves.

Say, for example, you aim to catch a show at the local theater, and tickets are Rs 20 each. When you get there you realize you've lost a Rs 20 bill. Do you buy a Rs 20 ticket for the show anyway? Behavior finance has found that roughly 88% of people in this situation would do so. Now, let's say you paid for the Rs 20 ticket in advance. When you arrive at the door, you realize your ticket is at home. Would you pay Rs 20 to purchase another? Only 40 % of respondents would buy another. Notice, however, that in both scenarios you're out Rs 40: different scenarios, same amount of money, different mental compartments. Pretty silly, huh? An investing example of mental accounting is best illustrated by the hesitation to sell an investment that once had monstrous gains and now has a modest gain. During an economic boom and bull market, people get accustomed to healthy, albeit paper, gains. When the market correction deflates investor's net worth, they're more hesitant to sell at the smaller profit margin. They create mental compartments for the gains they once had, causing them to wait for the return of that gainful period. Anchoring: In the absence of better or new information, investors often assume that the market price is the correct price. People tend to place too much credence in recent market views, opinions and events, and mistakenly extrapolate recent trends that differ from historical, long-term averages and probabilities. In bull markets, investment decisions are often influenced by price anchors, prices deemed significant because of their closeness to recent prices. This makes the more distant returns of the past irrelevant in investors' decisions. Over-/Under-Reacting: Investors get optimistic when the market goes up, assuming it will continue to do so. Conversely, investors become extremely pessimistic amid downturns. A consequence of anchoring, placing too much importance on recent events while ignoring historical data, is an over- or under-reaction to market events which results in prices falling too much on bad news and rise too much on good news.

Extreme cases of over- or under-reaction to market events may lead to market panics and crashes. Overconfidence: People generally rate themselves as being above average in their abilities. They also overestimate the precision of their knowledge and their knowledge relative to others. Many investors believe they can consistently time the market. But in reality there's an overwhelming amount of evidence that proves otherwise. Overconfidence results in excess trades, with trading costs denting profits.

CHAPTER VIII
INVESTOR LOSE MONEY
8.1 WHY INVESTORS LOSE MONEY? Unfortunately, no matter how many times people try to stop Investor from losing money in the market, they often dont listen until its too late. It is only after losing most of their money that they finally admit that they made mistakes. There is nothing wrong with or unusual about making mistakes. Actually, the biggest mistake investor can make is not recognizing himself that he had made one. The most obvious clue that something is going wrong with his investments is that losing money. A loss of more than 10 percent on an investment is a signal of a problem. Remember this: Do not invest in the stock market in order to lose money.

Here, some of the mistakes which are done by retail investors are as follows: Mistake #1: Investor Dont Sell Losing Stocks: For a variety of reasons, some investor holds onto their losing stocks too long. Failure to get out of losing positions early is probably the number one reason why so many investing and trading accounts are destroyed. The reasons investor hold onto losing stocks is primarily psychological. To keep your losses small, investor need a plan before they buy their first stock. One rule is so important that investor should post it in front of their computer or on their desk: If they lose more than 10 percent on an investment, sell. They lost, so they sell the stock. They can put a stop loss order at 10 percent below the purchase price when they buy the stock, or they can make a mental note. The main point is that investor should take action when their stock is losing money.

Mistake #2: Investor let their Winning Stocks Turn into Losers: It seems as if you cant win no matter when you sell. If you sell a stock for a gain, you are left with the lingering feeling that if you had held it a little longer, youd have made more money. In contrast, some people made tons of money in the stock market, then sat back and watched helplessly while all their profits disappeared (what the market gives, the market takes away). Some are still in denial about the fact that many of their favorite stocks will never return to even. Many people lost not only their gains but their original investment as well. For these people, it would have been less painful to have never made money in the market at all than to have won and lost it all. Mistake #3:

Investor Get Too Emotional about their Stock Picks: Inability to control their emotions is the main reason why most people should not participate in the stock market. When investing in the market with substantial money at stake, many people are flooded with emotions that compel them to make the wrong decisions. In fact, becoming too emotional about your investments is a clue that you could lose money. Making money should be as boring as waiting in line at the supermarket. A common problem, and one that especially afflicts those who have tasted success in the market, is overconfidence. Although some self-confidence is necessary if you are going to invest in the market, allowing your ego to get in the way of your investing is a dangerous sign. One of the reasons the bull market was destined to end so abruptly was that too many people were making too much money and thought they were geniuses. An old but true saying is, There are no geniuses in a bull market. The point is that people thought they were geniuses, but in fact they were just being carried by the strength of a bull market. Before the bull markets abrupt end, many investors got so greedy that they couldnt think straight. They were convinced that the good times would last forever. The signs of greed were everywhere: A 15-year-old boy, Jonathon Lebed, made a million rupees pumping and dumping penny stocks. The SEC allowed him to keep half his profits. The CEOs of dozens of companies were paid hundreds of millions of rupees in salary and compensation, even though their companies were losing money. (Many made their millions through stock options, which although legal, did not seem fair to shareholders who lost money.) Thousands of people were quitting their jobs to become day traders. Stock prices in companies that had no earnings were doubling and tripling each day. Many mutual funds were going up by over 100 percent a year. Stock analysts and CEOs were treated like rock stars. Hope is a dangerous thing. People are hopeful when they should be afraid and are afraid when they should be hopeful.

Mistake #4: Investor Bet Money on Only One or Two Stocks: One of the problems with investing directly in the stock market is that most people dont have enough money to maintain a properly diversified portfolio. (In general, no one stock should make up more than 10 percent of your portfolio.) Although diversification limits your upside gains, it also protects you in case one of your investments does badly. If you feel that you must bet all your money on only one or two stocks, then buy stocks in conservative companies with low P/Es (less than 10) that pump up their returns with quarterly dividends. You want stocks in companies that are so good that they will be profitable for years. Mistake #5: Investors Are Unable to Be both Disciplined and Flexible: Almost every professional investor will rightly claim that a lack of discipline is the main reason that most people lose money in the market. If you are disciplined, you have a strategy, a plan, and a set of rules, and no matter what you are feeling, you stick to your strategy, plan, and rules. Discipline means having the knowledge to know what to do (the easy part) and the willpower and courage to actually do it (the hard part). It means that you have to stick to your strategy and obey your rules. This has always worked for successful investors and mutual fund managers. Although the pros are right in claiming that you need discipline if you are to be successful in the market, you also need to balance this with a healthy dose of flexibility. Some investors were so rigidly disciplined about sticking with their stock strategy that they didnt react when the market and their stocks turned against them. In the name of discipline, many investors went down with the sinking ship. Discipline is essential, but you must be realistic enough to realize that you could be wrong. You have to be flexible enough to change your strategy, your plan, and your rules, especially if you are losing money. Mistake #6:

Investors Dont Learn their Mistakes: Most experienced investors and traders know that you learn more from your losers than from your winners. One of the worst things that happened to many investors in the tech boom was that they made money in the market too quickly and easily. When the easy money stopped and the market plunged, many of them had no idea what to do next. Why? They didnt know how it felt to lose money. Because they had made money the wrong way, they were destined to give it all back. If you lose more than 10 percent in the market, there are a few things you can do. Instead of burying your head in the sand, take the time to understand your mistakes. Its not useful to make excuses and act as if your stock losses are only paper losses that will be made up in the future. In the market, everything doesnt always work out in the end. Accept the loss and make sure you dont make the same mistake again. Mistake #7:

Investor listens or Get Tips from the Wrong People: If an investor eyes glaze over when they read about fundamental or technical analysis, there is a simpler way to find stocks to buystock tips. The beauty of tips is that investors can make money without doing any work. If this sounds too good to be true, it is. In fact, one of the easiest ways to lose money in the market is by listening to tips, especially if they come from well-meaning but uninformed relatives or acquaintances. These people often become cheerleaders for a stock, trying to convince you to buy it. Because its hard to say no to easy money (especially when the tip comes from a trusted source), there are some steps you can take to limit your risks. Should you get your stock picks from experts? Dont forget that most of the experts who appeared on television or were quoted in magazines were terrible stock pickers. Analysts lied, economists misjudged the economy, CEOs were overly optimistic, and accounting firms fudged the numbers to make losing companies look like winners. At the same time, greedy and lazy investors must take responsibility for buying stocks based on tips.

(Everyone wanted to be a player but we ended up being played.) The best advice you should received on the market was also the simplest: Keep your ears shut Mistake #8: Investors Follow the Crowd: If investor want to lose money? Then do what everyone else is doing. Unfortunately, it is excruciatingly difficult to think differently from everyone else. If you study the lives of some of the greatest traders and investors in the recent past, you will find that they often made their fortunes by doing the opposite of what the crowd was doing. That means buying when other people are selling and selling when other people are buying. If you study the psychology of group behavior, you find many periods and events in history that attest to herd mentalityor the madness of crowds, as one author put it. Although the crowds can win, they dont win for long. As mentioned earlier, the signal that a bull market is ending is that it seems as though everyone is in the market. Conversely, a signal of a bear markets end is that people are too afraid to invest in the market. When almost everyone is avoiding the stock market, and it seems like perhaps the worst possible time to invest, the bear market will end. Unfortunately, no one rings a bell to announce the end. You have to figure it out for yourself. Keep in mind that perception about the market change very rapidly. Mistake #9: Investors Arent Prepared for the Worst: Before investor get into the market, they should be prepared, not scared. Although you should always hope for the best, you must be prepared for the worst. The biggest mistake many investors make is thinking that their stocks wont go down. They are not prepared for an extended bear market, a recession, deflation, a market crash, or an unanticipated event that will ruin the market. Even if you dont expect a financial disaster, create a crash proof plan based on logic and common sense, not fear.

Mistake #10: Investors Miss Out or Mismanage Money: Managing money is a difficult skill for most people, but its one of the most important skills to have. Unfortunately, if you cant manage money, youre destined to have financial problems. In the end, its not how much you make but how much you keep that matters. Do you want to know the secret to making money in the stock market or with any investment? Dont lose money. If you think about it long enough, youll realize that this makes a lot of sense. Obviously, its not easy to find investments where you dont lose money, but that shouldnt stop you from trying. Just as harmful as mismanaging money is missing out on moneymaking opportunities. A little bit of fear keeps you on your toes, but too much fear can cause you to miss out on profitable investments or trades. Its the fear of loss that prevents many people from buying at the bottom. Its the fear of missing out on higher profits that prevents people from selling before its too late. Usually, fear results from a lack of information. That is why its essential that you do your own research when a financial opportunity comes your way. This gives you an opportunity to make an informed decision based on the facts, not on emotion. Obviously, you arent privy to all the information that you need in order to be 100 percent right. You have to make a decision based on the best information you have at the time. Many times youll be wrong.

CHAPTER IX
RATIOS
9.1 RATIO ANALYSIS: Mere statistics/data presented in the different financial statements do not reveal the true picture of a financial position of a firm. Properly analyzed and interpreted financial statement can provide valuable insights into a firms performance. To extract the information from the financial statements, a number of tools are used to analyze such statements. The most popular tool is the Ratio Analysis. 9.2 EARNING PER SHARE

EPS:

The portion of a company's profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company's profitability.

Calculated as: In the EPS calculation, it is more accurate to use a weighted-average number of shares outstanding over the reporting term, because the number of shares outstanding can change over time. However, data sources sometimes simplify the calculation by using the number of shares outstanding at the end of the period. Diluted EPS expands on the basic EPS by including the shares of convertibles or warrants outstanding in the outstanding shares number.

EPS

9.3

PRICE/EARNING RATIO P/E RATIO:

The P/E of a stock describes the price of a share relative to the earnings of

the underlying asset. The lower the P/E, the less you have to pay for the stock, relative to what you can expect to earn from it. The higher the P/E the more over-valued the stock is. The main reason to calculate P/Es is for investors to compare the value of stocks, one stock with another. If one stock has a P/E twice that of another stock, it is probably a less attractive investment. But comparisons between industries, between countries, and between time periods are dangerous. To have faith in a comparison of P/E ratios, you should be comparing comparable stocks. A valuation ratio of a company's current share price compared to its pershare earnings.

Calculated as:

P/E

Various interpretations of a particular P/E ratio are possible:

0-13

Either the stock is undervalued or the company's earnings are thought to be in decline. Either the stock is overvalued or the company's earnings have increased since the last earnings figure was published. A company whose shares have a very high P/E either really does have an exceptionally rosy future or the stock may be the subject of a speculative bubble.

14-20 For many companies a P/E ratio in this range may be considered fair value. 21-28 28+

N/A A company with no earnings has an undefined P/E ratio.

9.4

RETURN ON EQUITY ROE:

Measuring the Financial Health of a Company A measure of a corporation's profitability, The ROE is useful for comparing the profitability of a company to that of other firms in the same industry. Calculated as: ROE Essentially, ROE reveals how much profit a company generates with the money shareholders have invested in it. Also known as Return on Net worth (RONW).

9.5

RETURN ON INVESTMENT ROI:

A performance measure used to evaluate the efficiency of an investment or

to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio. Calculated as: Return on investment is a very popular metric because of its versatility and simplicity. That is, if an investment does not have have a positive ROI, or if there are other opportunities with a higher ROI, then the investment should be not be undertaken.

9.6

PRICE-TO-BOOK RATIO P/B RATIO:

A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share. Also known as the price-equity ratio". Calculated as: A lower P/B ratio could mean that the stock is undervalued. However, it could also mean that something is fundamentally wrong with the company. As with most ratios, be aware this varies by industry. This ratio also gives some idea of whether you're paying too much for what would be left if the company went bankrupt immediately.

9.7

DIVIDEND YIELD RATIO:

It is calculated to know what % of cash is earned on investment in particular

scrip. Calculated as: Dividend yield ratio = DPS / MPS. Publicly traded companies often make periodic quarterly or yearly cash payments to their owners, the shareholders, in direct proportion to the number of shares held. By law such payments can only be made out of current earnings or out of reserves (earnings retained from previous years). The company decides on the total payment and this is divided by the number of shares. The resulting dividend is an amount of cash per

share. The dividend yield is the dividend paid in the last accounting year divided by the current share price.

9.8

DIVIDEND PER SHARE:

Since the shareholders are the owners of the business, they are entitled to

their share of the profits. This is paid out as a dividend, and is usually expressed as an amount per share. This is because the total amount a shareholder gets is reflected by their shareholdings in the company. The dividend per share shows how much the company has paid out on each individual share, and so is worked out as:DIVIDEN PER SHARE = Dividends paid Total number of shares issued

9.9

PROFIT MARGIN:
Indicates what portion of sales contributes to the income of a company.

Calculated as: Profit Margin = Net Income/Revenue This ratio is not useful for companies losing money, since they have no profit. A low profit margin can indicate pricing strategy and/or the impact competition has on margins.

CHAPTER X

INVESTING FUNDAS
10.1

FUNDAS OF INVESTING:
Tips for the Successful Long-Term Investor Many investing websites have hot stock picks and tips - most of which

never pan out? Problem is stock picks aren't what makes you a successful investor. They key to making money in the long run is understands the fundamental principles of investing. 1) Use the Stop Loss order. 2) Sell the losers and let the winners ride! 3) Never invest on tips. 4) Stop worrying about the 1/8th. 5) Pay little attention to the P/E ratio. 6) Don't try to "time the market". 7) Waiting for the market to correct. 8) Price is irrelevant. These tips are by no means the only way to make money in the market. They are, however, eight pieces of solid advice that will help you come out on top in the long run.

THE 7 INGREDIENTS TO MARKET-BEATING STOCKS:

Ingredient #1: Dont Pick Stocks - Invest in Companies (At The Right Price) Its all about the fundamentals. Think about investments from the perspective of an owner and stop renting stocks. Look for companies with wide economic moats. Dont forget about price! Ingredient #2: Focus on the Important Factors Once you filter out the noise in the stock market, you can objectively analyze stocks. Focus on factors such as profit margins, cash flow and general financial health. Ingredient #3: Avoid Big Mistakes (and Losses) After analyzing your stocks for potential red flags, be sure there is still a built-in margin of safety. Ingredient #4: Remain Confidently Contrarian When everyone is talking about something, its probably too late. Ingredient #5: Know Thyself Accurately assess your financial and personal situation and build a portfolio that is wellsuited to your financial goals and personality. Ingredient #6: Avoid Conflicts of Interest Getting investment ideas from an unbiased source is critical (just ask those who invested

in the tech stocks to which analysts had given "buy" ratings while privately calling them "junk"). Ingredient #7: Don't Lose Sight of the Big Picture Understand how the bigger picture affects a company before you invest in it.

10.3 DOS & DONTS FOR INVESTORS:

Dos: 1) Always deal with the intermediaries registered with SEBI. 2) Always keep copies of all investment documentation (e.g. application forms, acknowledgment slips, contract notes). 3) Ensure that you have money before you buy. 4) Ensure that you are holding securities before you sell. 5) Give clear and unambiguous instructions to your broker/agent. 6) IF facing a problem act promptly. Talk to broker and find a solution. 7) If your broker can't help you to resolve your problem, then talk to the stock exchange where transacted. 8) If the problem is still not resolved, write to the appropriate authorities. Explain your problem clearly and in brief. Don'ts: 9) Dont deal with unregistered brokers/sub-brokers, intermediaries. 10) Dont forgot taking due documents of transactions, in good faith even from people whom you know. 11) Dont fall prey to promises of unrealistic returns. 12) Dont get misled by companies showing approvals/registrations from Government agencies as the approvals could be for certain other purposes and not for the securities you are buying. 13) Dont transact based on rumors generally called tips.

14) Dont forget to take note of risks involved in the investment. 15) Dont get misled by guarantees of repayment of your investments through postdated cheques. 16) Dont panic when facing a problem.

INVESTMENT TIPS FROM STOCK MARKET GURUS

Outlook Profit magazine conducted interviews with 5 famous Indian Stock market analysts to know about Indian growth story, investment strategy, future themes and stock picks. I am here writing about synopsis of the interviews.

Investment ideas and Stock recommendations

1. SAMIR ARORA (Chief Investment Officer, Alliance Capital)

Past record

He invested in HDFC Bank, Infosys and Bharti Airtel in their early days.

Future theme

Infrastructure.

On Indian Stock Markets

Good long term story.

2. MADHUSUDAN KELA (Chief Investment Officer, Reliance Mutual Fund)

Future theme

Rural consumption and alternate energy.

Stock Recommendations

Jain Irrigation, Gujarat State Fertiliser Corporation, Reliance Industries, Pantaloon Retail and Suzlon

3. PRASHANT JAIN (Chief Investment Officer, HDFC Mutual Fund)

Past record

He sold all his IT holdings before stock markets crash in 2000. He sold power stocks before their crash in 2008.

Future theme

Infrastructure.

Investment advise

Invest for long term and short term is negative.

Stock Recommendations

Nagarjuna Construction, HCC, Sadbhavan Engineering and Gammon India.

4. MAINSH CHOKHANI (Director, Enam Securities)

Past record

Infosys and GMR Infra IPOs but failed miserably in Reliance Power IPO.

Future theme

Media and Metals

Stock Recommendations

Nagarjuna Construction, HCC, Sadbhavan Engineering and Gammon India.

5. RAMDEO AGARWAL (Motilal Oswal Securities, Value investor.)

Past record

He saw India growth story in 2003. He invested in Bharti Airtel in 2002.

Future theme

Banking

Stock picks

IDFC, Tata Steel, HDFC Bank, ICICI Bank and SBI.

These are excerpts from their interviews. All are believing in the long term India growth story and bearish on short term returns.

INVESTMENT TIPS FROM RAKESH JHUNJHUNWLA

Rakesh Jhunjhunwala, "Indian Warren Buffett" gave some valuable tips on investing in Indian stocks. He was nicknamed as "Young tiger" during Harshad Mehta days. Like Buffett, he started investing in shares from his young days. Stock Market Investment Tips: 1. You have to wait for right moment before investing in stocks. Never invest in any stock with proper idea on its business and fundamentals. 2. First quality every investor should have is optimism. Ups and downs are common in stock movements but patience ultimately wins. 3. Monitor price moments regularly. Don't forget the past history of stocks. Never take decisions in hurry. 4. Believe in markets. Markets always do right thing in long term. Do not speculate. 5. Never miss good investment opportunities. If you find them, grab them with both hands. 6. Price at which you buy a stock is very important. Look for the opportunities around with a keen eye. 7. Maximize the profits and minimize the losses. Don't forget this basic rule. 8. Invest in a business not a company. He made big money in Praj industries. 9. Don't look for excess profits in a over valued economy. Greed is not good for Stock Market investors. 10. Investing is not my profession. It is my passion. Investing is the most interesting thing for me in this world. 11. You should have your independent opinion. Keenly observe and read relevant information with an open mind. Means are very important. Never follow herds. 12. Learning is a continuous process. Learn to accept losses with smile. 13. Ready for challenges and risks. If you want to win a war, you have to lose many wars. 14. You are not a owner of the wealth. You are a just trustee. 15. Indian stock markets will reach peak by 2010.

CONCLUSION
Before you attempt to buy your first stock, be aware that you are entering a battlefield populated by sharks that want your money. If you are going to invest in the market, you must fight them with knowledge (a very effective shark repellant). If you arent willing to do your own homework (independently do research on companies and stocks) and must depend on a stockbroker or a stranger on television to tell you what stocks to buy or sell, you are destined to lose money. You have no one to blame but yourself when you do. If you lose money, the government wont help you, nor will your broker. Remember that making money in the stock market is serious business. It is as serious as raising children or working at a fulltime job. In the end, you must take responsibility for your own investments. Youre completely on your own. To win, you have to be faster, more knowledgeable, and more flexible than investors in the past. Dont stop until you have created a successful portfolio. On the other hand, if you decide that stocks are not for you, at least you have a better understanding of how the stock market works. This misinformation that should help you no matter what you decide to do in the future. Always be on the lookout for profitable money-making opportunities while remaining cautious. When in doubt, however, dont do it.

ANNEXURE
AN INTERVIEW WITH MR. HITESH AGRAWAL HEAD OF EQUITY RESEARCH DEPARTMENT (ANGEL BROKING)

1. What is your job profile as an To make a thorough study of the and to advice our to invest. clients as

equity share analyst? fundamentals of a company to when, how and how much

2. What are the functions of your equity research team? Investment brings back high returns and value. You might be confident of your investment plans but there is always a doubt about the company in which you are investing. Equity Research is the answer to avoid any kind of investment risk. Our team of analysts is well trained to conduct a thorough research before you decide to invest. We collect comprehensive information and critical data. We conduct a rigorous research and analysis to provide you with details such as the company financial reputation, history, about their market shares and company news and other useful information. 2. What is the typical holding period of your funds investments? We do not follow the concept of a typical holding period. However, we expect that our best buy ideas will have the longest duration, followed by best short ideas and then by pair trades. We will manage our portfolio on an active basis with market dynamics/opportunities and fund flows driving some of our decisions and hence holding periods.

3. Is equity the best investment? We should look at it from a point of view that SEBI is actually trying to regulate the market in a much more orderly manner because India has witnessed inflows of close to USD 3-4 billion in the last one month. From global perspective, it is not very big because US has witnessed capital outflows of almost over USD 150 billion in the month of August alone. So that kind of outflow from such developed economies tend to come into developed economy where the money is much safer for fund managers to invest in. So from that point of view, SEBI is trying to regulate the market in the sense that they want to assure seeing some pressure on our rupee. 4. What should investors do now? As the investment ground breaks into a financial earthquake around us, the one question retail investors are asking is: what should I do now? Should I sell and run or is this an opportunity to buy? The short answer: long term investors need not panic; short term investors need not buy. 5. What are the stock tips for successful investors? Stock picks aren't what makes you a successful investor. Never invest on tips. Don't try to "time the market" and Wait for the market to correct. 6. What are your future plans? There is a lot of future scope with the upcoming FMCG companies. the quality of money that is entering the country and also manage the capital inflows because we are

Sep 8, 2008

Monday

July 29, 2008

Tuesday

BIBLIOGRAPHY
WEBSITES:
www.investopedia.com
www.esnips.com www.stockmarketguide,in

BOOKS:
NCFM

( NSES CERTIFICATION IN FINANCIAL MARKETS) Financial Management - ARVIND A. DHOND

NEWSPAPERS:
Hindustan Times