Investments and Equities Trading - Lets help each other!

[ajayverma1973]

investment

maanana to padega, ek kaam karo aap ek survey karva ke dekh lyo ya phir khud kar ke dekh lo, How many (male/femal) Chairman, MD, CEO, CFO, HODs in India as well as abroad. Apne aap doodh ke doodh aur paani ka paani ho jyaga.

Nahi ji bilkul nahi maan arr na maanu jib tak aap mere saare sawaalo ke jawaab na de pao .... aapte mere sawaalo ke jawaab to diye na jaate better kith te maan leyu aapne ... arr aap te 3 saal te follow karte aaye ho inhe arr fer bhi daro ho aur tips maango ho arr hum deve hain ... to kaun hua better

 

[kapdal]

As Anil bhai suggested... let us start with basics:

They very first and importnat point in share trading is selection of best broker or site using which you do share trading.

I liked ShareKhan.com for this as I had used ICICIDIRECT in the past. Their rates are very high. Sharekhan charges much lesser than ICICIDIRECT.

Anyone else knows the better share trading site?

Sharekhan should and would charge much lesser as it is a smaller company. What people ignore is counterparty risk. When you put money with sharekhan brokerage, you are sort of taking a risk that if the company defaults, you can lose your money. Technically, that should not be the case as brokerages should be keeping client accounts separate from their own. But in practise, it can be very muddled. Lots of hedge funds have still not got their money back that they had put on trading accounts with Lehman Brothers. So if sharekhan defaults, in the best case, your money would be locked for a long time till the bankruptcy proceedings get over. And in the worst case you won't get it back. You may still want to trade with Sharekhan, but important thing is to be aware of this risk.

Market is actually punting on ICICI default as well. Don't think Indian ovt. can allow that to happen, but still there is a risk. Personally, I'd recommend HDFC. Lesser counterparty risk and seems like they have a good trading platform (haven't used it yet, but from whatever I can gather from various sources).

 

[caravi2910]

Please..............

hmm............Please mind that where this thread is heading

 

[anilsangwan]

Right Kapil bhai.. Lekin they keep customer and their accounts separate as you rightly mentioned. But still no guarantee..! Anything can happen anywhere.....

But, sharekhan is no more a small company. It has grown really big.

I have not yet tried HDFC... will check with my friends and will put information here.

Sharekhan should and would charge much lesser as it is a smaller company. What people ignore is counterparty risk. When you put money with sharekhan brokerage, you are sort of taking a risk that if the company defaults, you can lose your money. Technically, that should not be the case as brokerages should be keeping client accounts separate from their own. But in practise, it can be very muddled. Lots of hedge funds have still not got their money back that they had put on trading accounts with Lehman Brothers. So if sharekhan defaults, in the best case, your money would be locked for a long time till the bankruptcy proceedings get over. And in the worst case you won't get it back. You may still want to trade with Sharekhan, but important thing is to be aware of this risk.

Market is actually punting on ICICI default as well. Don't think Indian ovt. can allow that to happen, but still there is a risk. Personally, I'd recommend HDFC. Lesser counterparty risk and seems like they have a good trading platform (haven't used it yet, but from whatever I can gather from various sources).

 

[bagamalik]

maanana to padega, ek kaam karo aap ek survey karva ke dekh lyo ya phir khud kar ke dekh lo, How many (male/femal) Chairman, MD, CEO, CFO, HODs in India as well as abroad. Apne aap doodh ke doodh aur paani ka paani ho jyaga.

Ajay Ji,

Eb baat ban javegi or koa rasta nahi bacha madam thore

But my view girl do many thing, in many area they have perform well but some thing they remember (the are women).

 

[sachinb]

Bhai I asked for Reliance Money, can you through some light

Right Kapil bhai.. Lekin they keep customer and their accounts separate as you rightly mentioned. But still no guarantee..! Anything can happen anywhere.....

But, sharekhan is no more a small company. It has grown really big.

I have not yet tried HDFC... will check with my friends and will put information here.

 

[crsnadar]

Risk to hai hi...
Market down market down..to hum sabhi dekh hi rahe hain
But those who are experienced had already made money even at this recession period.

Even in Satyam some people made money.
Once it was arond Rs 20 week ago some people in our office purchased & are claiming to have made a handsome profit already as it is near Rs 50 as of now.

Gamble to hai hi ye..so i would not go for any such investment at least for 1 year.

 

[anilsangwan]

20 is high you are talking about brother. It was even Rs 6 per share and people made money... Imagine one could buy 1000 shares in just Rs 6000. !!!

Risk to hai hi...
Market down market down..to hum sabhi dekh hi rahe hain
But those who are experienced had already made money even at this recession period.

Even in Satyam some people made money.
Once it was arond Rs 20 week ago some people in our office purchased & are claiming to have made a handsome profit already as it is near Rs 50 as of now.

Gamble to hai hi ye..so i would not go for any such investment at least for 1 year.

 

[kapdal]

Equity trading is neither good nor bad, its just what & how one do it and what it results into.

Making gain or suffering loss doesnt depends on market scenario but on factors like what stock you are picking, for how long you wish to retain it etc.

There are many a kind of strategies which people adopt. For example, few people insist on picking up stocks of blue chip or renowned companies only, whereas few others always trade in mediocre shares and this also results in heavy profits at times.

The later one being lesser practised, I would like to bring it to your notice specifically. In this strategy people pick stocks of mediocre level companies after observing their movements for some time. At times there are companies who are nearly defunct or with minimal operations, but if someone gets to know that its quite likely that the company is going to be referred to BIFR for its reconstruction or is going to get someone government aid, its share starts rising. Face value of shares of such companies is also less and therefore lesser amount is required to purchase its shares.

Then comes the risk part for the novices. Then the safest way to start investing is to start with a lesser amount and invest it in multiple stocks. Then slowly when you start making some gains take out your money from the process that you originally invested and then you will be just trading on your profits - then you are safe atleast in regards to your principal amount.

Shwetaji- I don't really agree with the highlighted part. Systemic risk, that is the market scenario, should be the most important factor when one is looking to invest. You can pick the best stocks, but if the prevailing sentiment is negative and people are going to sell en masse because of fear, you are going to lose. People like to think that they can pick the best stocks, but it is not really a science and a lot of luck element is involved. This is not to suggest that one must not do his research or follow a strategy for investing. But to be aware that markets don't follow any rules or strategies. If we are in a prolonged recession scenario, markets would be guided mostly by sentiment (I have put a separate post earlier on why India would be affected even if it doesn't have a recession). Now, there can be relief rallies even in a bear market, but they are guided by sentiment and not much by fundamentals of a company.

As for the mediocre companies' point, I would like to warn you specifically. Lots of insider trading happens in such cases as the market float (shares being traded in the market) is very low. Bulk of the shares are with a few individuals who have much more information than the rest. They can easily jack up the prices by creating a false impression of bullishness on the stock and then dump them later on. Small investors see the stock price going up and read some nice reports (which are planted) and get lured. Of course, the small investor can still make money if he is not caught on the wrong side of the trend. So one may want to do it, but should be extra cautious. Because it is a gamble.

 

[kapdal]

Right Kapil bhai.. Lekin they keep customer and their accounts separate as you rightly mentioned. But still no guarantee..! Anything can happen anywhere.....

But, sharekhan is no more a small company. It has grown really big.

I have not yet tried HDFC... will check with my friends and will put information here.

When I say small, I meant relative size. If Sharekhan defaults tomorrow, the Indian govt. is not going to sweat as it is just a brokerage and not a bank. But if ICICI is going to default, the govt. has to save it as thousands of people have their deposits with the bank. Also, during a credit crunch, the smaller companies' borrowing costs go much higher, thus increasing their chances of a default. As I said, if you really like Sharekhan and know that the company is being run soundly, you can stick with it. I have seen so much happening around me in the last year that I have become quite risk averse

 

[ajayverma1973]

investment

One can invest small capital in such share when they are at lowest level, satyam was at Rs 6.30/share but it is very difficult to purchase on that lever as one should have to be on trader terminal all the time which is not possible for all of us as we have to do our job/business also, but buying satyam about Rs. 20/share is not very much risky, one can have 100 shares by investing just 2000 agar itna risk bhi nahin utha sakte to don't talk about equity.

Aur haan jo terna (swimming) seekhna chahte hain unhe pani main to uterna hi padega (No gain without pain) simple sa fanda hai dosto.

Risk to hai hi...
Market down market down..to hum sabhi dekh hi rahe hain
But those who are experienced had already made money even at this recession period.

Even in Satyam some people made money.
Once it was arond Rs 20 week ago some people in our office purchased & are claiming to have made a handsome profit already as it is near Rs 50 as of now.

Gamble to hai hi ye..so i would not go for any such investment at least for 1 year.

 

[anilsangwan]

OOOO bhai... daraawe mat na... mera toh salary account bhi ICICI mein sei.... dekhiye bhai... baalak bhookhey marr jaangey

When I say small, I meant relative size. If Sharekhan defaults tomorrow, the Indian govt. is not going to sweat as it is just a brokerage and not a bank. But if ICICI is going to default, the govt. has to save it as thousands of people have their deposits with the bank. Also, during a credit crunch, the smaller companies' borrowing costs go much higher, thus increasing their chances of a default. As I said, if you really like Sharekhan and know that the company is being run soundly, you can stick with it. I have seen so much happening around me in the last year that I have become quite risk averse

 

[anilsangwan]

Aur haan jo terna (swimming) seekhna chahte hain unhe pani main to uterna hi padega (No gain without pain) simple sa fanda hai dosto.

True Ajay ji. Simple rule is "More is the risk..more is return".

Thats why I started my thread saying that most of us do not show interest in EQs. If you want no risk...then go for Fixed Deposits in SBI or Punjab National Bank..etc... there money is safe... but remember.. very low / almost no returns !!!

 

[shweta123]

Shwetaji- I don't really agree with the highlighted part. Systemic risk, that is the market scenario, should be the most important factor when one is looking to invest. You can pick the best stocks, but if the prevailing sentiment is negative and people are going to sell en masse because of fear, you are going to lose. People like to think that they can pick the best stocks, but it is not really a science and a lot of luck element is involved. This is not to suggest that one must not do his research or follow a strategy for investing. But to be aware that markets don't follow any rules or strategies. If we are in a prolonged recession scenario, markets would be guided mostly by sentiment (I have put a separate post earlier on why India would be affected even if it doesn't have a recession). Now, there can be relief rallies even in a bear market, but they are guided by sentiment and not much by fundamentals of a company.

As for the mediocre companies' point, I would like to warn you specifically. Lots of insider trading happens in such cases as the market float (shares being traded in the market) is very low. Bulk of the shares are with a few individuals who have much more information than the rest. They can easily jack up the prices by creating a false impression of bullishness on the stock and then dump them later on. Small investors see the stock price going up and read some nice reports (which are planted) and get lured. Of course, the small investor can still make money if he is not caught on the wrong side of the trend. So one may want to do it, but should be extra cautious. Because it is a gamble.

Kapil ji I wished to put forward the fact that its not that just because of systematic risk one should drop the very idea of trading in equities.

I made the statement keeping in mind the aprrehensions put forward by someone here regarding not investing in equity 'nowadays' owing to markets being already down.

Undoubtedly, there is no universal strategy and this everyone knows very well who has a bare idea of the market movements. But then how to move forward? There are various bullish/bearish strategies which people follow as per their liking & assesment of the market movements. One has to start from somewhere & any action would obviously emanate from some self made or generally adopted strategy. This was just an example of what people do.

And regarding your contentions about insider trading, this is a risk just like all other inherent risks of trading & is prevalent even in case of bigger companies just like it is being suspected in the Satyam case investigations. Thing is that in case of mediocre shares usually people indulge in short term trading and often come out with profits. Many people even earn good margins during intra day trades.

Risks are omnipresent in any activity being done in stock markets. Thing is that which possible risk you choose !

 

[kapdal]

OOOO bhai... daraawe mat na... mera toh salary account bhi ICICI mein sei.... dekhiye bhai... baalak bhookhey marr jaangey

Hahaha...darana nahin chaahta dost. Actually just checked, ICICI ka Credit Default Swap 580 pe trade karr raha hai, that is a implied probab. of default of 38% by the market. Ek time tha pichhle saal jab yeh 1300 pe chala gaya tha. I heard rumors ki ICICI ke UK waali division ne US ABS wagairah pe bada punt maara hua tha. Now it has tightened significantly. 580 is not a bad level considering that GE is trading around the same point. Personally, I don't think that it'd default. Even if the worst possible thing happens, Indian govt. should step in to save them. But then I thought the same thing for Lehman.... Let me put it this way- it is safe but not as safe as SBI. And thing is I'd prefer to be safe than sorry

 

[kapdal]

And regarding your contentions about insider trading, this is a risk just like all other inherent risks of trading & is prevalent even in case of bigger companies just like it is being suspected in the Satyam case investigations. Thing is that in case of mediocre shares usually people indulge in short term trading and often come out with profits. Many people even earn good margins during intra day trades.

Risks are omnipresent in any activity being done in stock markets. Thing is that which possible risk you choose !

Well, my point is that all risks are not the same. Investing in such companies is riskier than Satyam. Now, in retrospect anyone can say that Satyam was riskier. But Satyam was an exceptional fraud in the sense that it was a regulated company. This is more like a routine fraud. And anyone who knew anything about IT sector would have vouched 2 years back that Satyam was riskier than Infosys and TCS. Just like ICICI is riskier than SBI and HDFC right now. Similarly, my earlier argument was that the market risk right now is much bigger than company specific risk. Now, you may still want to take any of these risks, but a rational trader would take the risk only if he is being compensated commensurately for taking that risk. For example, if both ICICI and SBI are paying 10% return on their 5 year FDs, it'd be irrational to put my money with ICICI. But if ICICI is paying 15%- then it might make sense.

And for all those people who make money in day trading, there are people sitting on the opposite side of the trades who are losing money. So "there are people who make money" won't be a rational argument according to me to invest. Just like "there are people who lose money" won't be a rational argument not to invest.

 

[anilsangwan]

Any other trading site people here are using? I guess it will be of help to people who are new to this field.

 

[coolphool]

Haan Bhai Sangwan, you sound like a Financial Engineer! What do you do for a living!

 

[anilsangwan]

Brother, thodda off topic ho gaya... but I am working as Program Manager in an IT company.. .... khaan peen joggi salari yahaan se aa jaati hai.. baaki Finance field mein mera interest sa sei bhai..

Haan Bhai Sangwan, you sound like a Financial Engineer! What do you do for a living!

 

[anilsangwan]

DISHTV shares got a sudden increase of around 20% two days back... Does anyone have any info about health of this share?

The kind of business they are in, it requires only one time investment and then only returns..... baaki bera na kisa sei yoh share...!!