Is it so easy to earn money from the Stock Market?

While growing up in the family of “Failed but Ever-optimistic Stock Traders”, I often heard my father and grandfather repeating one statement – “Out of 10 people, who invest in the stock market, only one earns the profit and that one person takes away the entire investments of other 9 people.”

But I often wonder that despite stock market being such a tough preposition, people flocked to it with an impression that they will come out with rich dividends every time. Arguably, it is the mirage of easy and quick money that attract people towards this mode of investment, despite falling miserably many a times in the past.

Well, I am not pessimistic abut stock markets or favor what my father or grandfather say, but just want to say that “Investing money in stock market is as major decision as it with investing your money in any other business. So, one must have a realistic plan in its mind on how to earn money from the stock market before entering into it”.

Let’s start with an example. One fine day two investors – Anil Bhai and Mukesh Bhai decided to invest 1 lakh Rs in the stock market.

Anil Bhai, like most of the investors, is excited and raring to invest his money in stock market, with a hope to get good returns in quick time. He observed that “Doolittle Technologies” has gained almost 40% in last 5 days. The stock is currently at Rs 21.

He feels tempted to enter this stock at current levels since it’s a cheap stock and belongs to the booming IT sector. He also watched analysts on TV predicting Doolittle to reach Rs. 50 in next 1 month because the company is hoping to get the banking project from Europe’s largest bank. He feels satisfied and purchases 2000 shares of Doolittle at Rs. 25.

Ahh!! All set to watch this stock going double in next 1 month. Sadly though, the news about proposed investment came out false and stock after touching 30 went down to Rs. 15. In other words, back to the initial levels.

Bechaare! Anil Bhai is now trapped in Doolittle Technologies, and like any other investor, has no other option than to wait for a good day when it will touch 21 and he will be able to come out of this failed investment.

Well, if we analyze his investment closely, here are few points that come out:

1) No underlying criteria - Anil Bhai investment was based on two criteria – it is a cheap stock and it belongs to IT sector. Both these criteria had no underlying value since a cheap stock doesn’t guarantee profits and not every IT company gives returns like Infosys or TCS.

2) Purely Speculative - Anil Bhai investment was pure on speculation basis since the “Doolittle Technologies was hoping to get the banking project” and did not confirm that it actually “got the project”.

3) No Logic, Only Emotions - Anil Bhai did not look at company’s financial performance in the past and in the end, the decision was purely an emotional one rather than the logical one.

4) No Risk Projection - And the most important is that he never had any risk projection. In other words, he never took an alternative view that what will be his stance, in case, the investment start generating losses. Ideally, he should have taken the approach of “Stop Loss” that ensures his position got squared-off if it fall to the assigned level. Thus, by using this approach, he could have limited his loss and able to come out of this clutch.

Now, let’s look at Mukesh Bhai. He is also an eager investor, though he has made some wrong investments in the past like Anil Bhai. But the only difference is that he is willing to learn from its past mistakes and is determined that he won’t repeat them again.

This time, instead of floating with the market sentiments, he decides to analyze few things before putting his hard-earned money in any stock. He is not looking at exponential gains, rather looking to get somewhat better than what he can get from fixed returns. So, instead of looking at cheap stocks or current favorite sector, he analyzed the stock on the basis of some logical parameters:

1) Financial Performance – Mukesh Bhai observed that companies with good financial platform are more likely to go up since they are more capable to override any inevitable situation and also in a better position to grow in future.

2) Future Plans – Mukesh Bhai is willing to invest his money in those companies that are likely to grow in future. In other words, companies that contain a realistic vision to become leader in their segment or if they are leaders, willing to sustain that position.

3) Sectorial View – Like Anil Bhai, Mukesh Bhai also believes in taking a call on the sector to which the company belongs to. But his opinion is a bit different. Instead of using Sector as the benchmark criteria, Mukesh Bhai considers sectorial analysis to take a deeper look at the company future prospects. In other words, sector does play an important role but cannot guarantee company’s profit by any means.

4) Past Returns – Sometimes, a good company doesn’t give good returns to investors in the stock market. It could be due to reluctant management, which doesn’t believe in sharing profits with investors or any other reason. Therefore, Mukesh Bhai decided to look at the past returns that the particular stock has given to its investors.

5) Realistic Expectations – Well, nobody will mind if his /her investments generate huge profits. But in this unpredictable stock market, Mukesh Bhai wants to be realistic with his expectation. Once deciding the stock that he wants to purchase, he also pens down the price range (on the upside) at which he will come out of the investment. Thus, by taking this approach, he is able to withhold his emotions and let logic rules over unrealistic expectations.

6) Risk Projection – Mukesh Bhai is aware about the deep losses that he suffered in the past. Thus, to limit the losses in case of any trend reversal, Mukesh Bhai has also pen down the Stop Loss Price. If the market price of his stock goes down the Stop Loss Price, he will square-off the position and come out with limited losses. Indiabulls Online Trading System enables you to place a Stop Loss order in the Capital as well as F&O Market.

Now, if I ask you who has better prospects to earn from the stock market – Anil Bhai or Mukesh Bhai, you will most probably say ‘Mukesh Bhai’ because he applied logics rather than emotions while investing money in stock market.

Well, I hope you do not make mistakes as my father, grandfather or Anil Bhai did by using their emotions rather than the logic. Be aware and realistic from your investment because it is no Magic but a pure Logic that can fetch you great returns!!!

Wish you all a very Happy Investing!!

Indian Army - fighting the battle within

Indian Army has always been a trademark of Discipline, Sincerity and Brave Attitude - be it about defeating the brutal enemy on the hills of Kargil or playing a pivotal role in UNO Peace Keeping Force.

Sadly though, the army is going through a rough patch today . In this era of Globalisation, it is facing a new enemy that doesn't come from across the borders but residing within the minds of its brave soldiers. This new enemy is STRESS - stress to serve their country on borders on one side and stress to feed their family on the other side. Furthermore, they have to live far away from their families for longer period of time, which sometimes prove disastrous on their mental strength.

For an instance, if we look closely at the recent arms leak scams. It shows the kind of turbulence that is going within the army fraternity. Today, the ordinary soldiers are finding difficult to motivate themselves when it comes to serving their country since they are not getting the kind of appreciation that they truly deserve. Furthermore, the humble salaries that they are getting are also pushing them towards crimes like spying for other countries who pay handsome amount to extract sensitive information from them.

Another glaring issue is the shooting incidents that have increased quite substantially in recent years. Within the last fortnight, 4 army men have been killed by their own fellow men in Kashmir only. Besides, suicide by a women soldier recently has also shown that one needs some urgent reforms within the army to maintain the integrity and the harmony within its ranks.

The first and the foremost issue that needs to be resolved is to provide them with adequate financial and other benefits. Though, it is true that army gets essential commodities at very less prices but there are other aspects where it needs facilities that a normal citizen gets. For ex., increased number of schools and colleges, especially around those villages from where bulk of the army men come. Further clearing my point, children of army men must get the good education to ensure that they grow up into proud sons and daughers of their deserve worthy fathers.

Secondly, is to impart army with multitude skills. Most of the army men join army at a very young age and probably many of them are deprived of studies that would like to complete. Thus, every soldier must be regularly feed with short-term courses across various areas to broaden their mental capabilities and enhance their skills.

Army has always been full of great leaders who led their battalion with an example. This Exemplary beheavior should be seen more often in army now a days. The leader of a group, team, or a battalion must care for its sub-ordinates - be it their personal issues or their professional needs. By forwarding their caring hands, stress levels within the army can be reduced substantially and one can again seen soldiers with their head helds high guarding the country borders.

I am just 24 yr old and never been to border in my life. But, seeing my dear army friends breaking down under stress has teared me from within. That's why I am here to pen down my thoughts. I do not know how right or wrong I am but I know that you have some better ideas than what I wrote. All it needs is some time to voice your concerns. Friends!! Take out some of your time and share your views on how can we help our fellow army men who keep 24X7 vigilance on the borders to give us sunny days to enjoy and calm nights to sleep.

JAI HIND!!!

Dilemma of being the parent of a child

Just three words "It is pity" reflects all. When a vice-principal of one of the prestigious schools in the capital of India is found taking donation (even bribe won't be an inappropriate word) on hidden camera, it shows where our education system is heading to.

Though currently, I’m basking in the glory of bachelorhood and don’t have any experience in managing family affairs; yet if I assume myself as a parent of one kid, I find myself helpless on how to get a good education for him.

I cannot go to a Govt school for known reasons. The conditions are pathetic and cannot let my child use stinking toilets or drink water full of germs. Besides, outdated educational methods and unavailability of sincere teachers further strengthen my concerns about government schools efficiency in bringing out out a good citizen from my kid.

Now, if I go to private schools, authorities demand exorbitant money in the form of donations and monthly fees. One school takes my interview to get my kid admitted. Other asks me to pay donation generously to their education trust if I want my son to study in their reputed school.

Amidst such frenzy atmosphere, an Education Agent contacts me and promises me to get admission for my kid in a reputed school without much hassle. In lieu, he demands commission or service charges from me. Thus, in the end, I am left with very few options. I either fit an iron lungs and kidneys to my child and send him to a Govt school or shell out all my savings to get him admitted to a private school.

Today, every parent is living in such a dilemma. Social Status and good educational background is pushing every parent to provide quality education for their children as well. But when they go out, they find no help from the government and so called Education Trusts. Sometimes, I feel wonder that why we pay education cess or tax every year when government can’t even provide basic facilities of Education and Electricity to its citizens.

Whatever happened last week was not a sensation if you ask a parent of any school going kid. Majority of them have gone through interviews and donation webs to get their child admitted in a private school. Often they are asked to pay donation for building, chairs, desks etc. Even one school in Delhi is famous for asking a 14 lac CNG bus from one parent when he went to them for his son’s admission.

But who is to be blamed?? Today, Government looks like a replica of a drunkard and lusty king who doesn’t care about ‘praja’ of its state. Though this same king leaves no stone un-turned when it comes to collecting tax from its ‘praja’ – sometimes in the form of service charges and sometimes as Education Cess.

On the other side, Education Trusts have also become a generous route to collect money from parents now a days. They collect donations (ransom) from parents in the form of social development but where that money goes can be seen from the bludgeoning profit sheet of Swiss Bank. :)

Bribe, this time in the form of Donation, has seeped deeply into our education system. Today, education is not provided rather sold and purchased and sometimes I wonder how our children can become honest and law abiding citizens when they see their parents taking wrong route to build first few steps of their long social life.

It’s time to bring a change. It's time to awaken and take steps that ensure better and promise future for the coming generations. If we can force govt to act on the issues of Jessica Lal and Reservation, we can do the same this time as well. All we need is a collective effort.

The most significant change we must bring is in our 'dena hi padega' attitude. Rather than buckling under Agents and greedy educational institutions, we must stand united against them and report such incidents to the media or active NGOs. Always remember that “EDUCATION IS THE BIRTH RIGHT OF EVERY CITIZEN AND IT IS UP TO US TO AVAIL THEM WITH FULL DIGNITY AND RIGHTS.”

Mandal Commission 2006 reignites caste-merit debate….

During my upbringing, I often came across this ironclad question, “Who came first - A hen or an egg???” Quite on the similar line, today Indian society, in wake of Mandal Commission recommendations, looks divided between the two aspects – Merit or Caste and which contains the higher priority of the two. Come!! Let’s find out… What’s the real gush all about...?

People who support Mandal Commission recommendation like janissaries swear by the fact that India’s 52% population belongs to backward section of the society. Thus, in view of this, they are entitled to half of the seats available in the educational institution. For these people, cast comes before the merit because they fear that students who hail from rural India won’t be able to compete with their counterparts residing in Urban India due to lack of modern education that is imparted to children in the urban class. Thus, to uplift rural people and bring them to the mainstream society, Reservation is a must.

On the contrary, antagonists who go against the Mandal Commission recommendations come with a view that in the 21st century, India needs talented people to uplift country from “A Developing Nation” to “The Developed Nation”. For these people, Mandal Commission recommendations come as an obstacle that could hamper country’s growth and pull down it back into the age of casteism where your last name matters more than the numbers in your mark sheet.

Like there are two sides for every coin, each aspect has its implications. With seat reservation for SC/ST/OBC and its proper implementation, one good thing that can happen to our society is the mingling of rural and urban India. In coming days, we can see students living in rural India who are really talented coming to these educational institutions and becoming a part of mainstream society as respected citizens.

On the flip side, there are some serious doubts over its implementation. My own real life experience with the wrongful use of reservation came when I appeared for Delhi College of Engineering entrance exam. One of my friends, who belonged to the SC/ST grade, got admission in the college despite scoring much lesser than what I got. What was my fault?? I was left out because I belonged to General Category. Thus, there is a genuine fear that this quota system will benefit mostly to bunch of SC /ST people who are affluent and not to those who really need it the most.

Similarly, merit system has its inherited advantages. Merit system gives an equal platform to every one in the society to prove their talent and claim the accolades. Probably, this is why IITs and IIMs today have the reputation of forking out the cream of technical and managerial skills available in the country. Undoubtly, with seat reservations, their reputation will come to stake since they need to forcefully accommodate students who might not able to live up to their expectations.

But merit system has its share of flaws as well. It is heavily biased towards the genre of students who can undertake coaching classes from premier institutes and tune themselves easily with IIT/IIM syllabus. Practically, can we expect the poor farmer who faces drought and floods every year to provide his son the quality education, which is comparable to what students get in urban cities? The answer is NO and often we see the son ending up as the assisting hand helping his father on the field. Thus, to provide equal opportunities for every section, we need some kind of mechanism, which can ensure that no particular section of the society goes heavily biased.

In sensitive issues like Seat Reservation, we need to make decisions carefully. Rather than cashing on vote banks (V.P.Singh’s Janta Party or Arjun Singh’s Congress), political leaders should resolve this issue with a right frame of mind since its outcome could influence the country strategically.

Though, the best solution in my view is to implement it for a specific period of time. In other words, we can initially reserve seats for the backward sections for next 5-7 years and during that period of time, we try to uplift these people and include them in the mainstream like by providing them free education at lower grades, subsidized fees for higher studies, providing them basic necessities like electricity, phones, hospitals etc and gradually empower them. Once we achieve this target, we can now provide everyone the platform to showcase their talent.

Friends, it was just a point of view from my side to resolve this touching issue between Caste and Merit. I know you all have something to say about this issue especially if you are young or have naughty young ones in your family.

Speak out friends… Because in democracy, this is our right as well as duty to say what we think is right…

Mayank, Delhi.

Jessica Lal Murder Case- Should we only blame Courts???

80 odd people celebrating in a party late night around 2:00 AM, 2 more added later but they were miscreants and in a drunkard state. They asked for more, which was refused politely. Soon, booze overrided their senses and they opened fire on an innocent woman.... And she died on the spot.

Soon, police came, took samples, recorded evidences and filed the case. Law took over from there and after 7 long years came out with the verdict that led all of us think atleast once that “Is Justice really blind???”

We all know that inncocent woman was Jessica Lal. We all know that accused Manu Sharma is acquitted by the Court and probably will kill somebody else next time without any hesitation because he knows law cannot chain him; instead he chained law with his powerful hands...

It is human tendency to blame others for all problems and sufferings. We don’t hesitate to point our finger to blame bureaucrat driven police and politically influenced court verdicts. But question is that should we only blame courts??? Can't we evaluate ourseleves and find out where are we standing wrong???

There were 80 odd people in the party but nobody forward to record their statement. And those who did turned hostile later. The verdict might go the other way if ‘Shayan Munshi’ hadn’t hostile at the last moment.

Courts and law are made by us and for our good. Court cannot put anyone behind the bars forever until and unless there are substantial evidences against him. Law is just a system of keeping things in right order. Eventually, it is us who need to empower this system. It is high time that we all should wake up. Rather than living life of coward, we must take the responsibility and ensure that crime is controlled and those who did wrong deeds must land behind bars.

Friends… I said what I thought was right in my perspective. Now its time for YOUR SAY on such incidents and how we can ensure that crime can be curbed and law becomes a fear factor for criminals....

Mayank, Delhi, India