How to invest in Stock Markets?

Tips and advice for stock market investors:

1. You will never succeed in Share Markets if your investment decisions are based on tips from Brokers and friends. You should study the markets, analyze the trends, take calculated risks and then invest in stocks.

2. Learn lessons from failures. Even great investors like Warren Buffett suffered losses in his early days.

3. Identify your risk profile basing on your age, economical status, risk bearing capacity and future needs.

4. Never put all your money in single investment portfolio. Diversify them.

5. There are no shortcuts to earn money in share markets. You should work hard to make money in stocks as in other fields.

6. Never follow herd mentality. Buy valuable stocks when panic investors are selling them. Sell over valued shares when all are buying them. Never afraid to buy a fundamentally strong but undervalued stock. This is the key to the success of Warren Buffett. This is called Value investing.

7. Large caps are secure while midcaps give high returns. Identify the future sector and find the best stock in that sector. Accumulate those stocks. Power and Shipping are the future growth sectors in India.

8. Never invest in Z category stocks or rupee stocks just for the sake of high returns.

9. Never invest without stop loss and target. Never change them without any specific reason.

10. Read at least 2 business news papers and investment magazines.

Take care, happy investing!

Investment tips from Warren Buffet

Tips and advice for smart investors by Warren Buffet:

1. Beware of companies displaying weak accounting.
2. Unintelligible footnotes usually indicate untrustworthy management.
3. Be suspicious of companies that trumpet earnings projections and growth expectations.
4. Suspect those CEOs who regularly claim they do know the future –and we become downright incredulous if they consistently reach their declared targets.
5. Managers that always promise to “make the numbers” will at some point be tempted to make up the numbers.
6. Derivatives are financial weapons of mass destruction.

7. A director whose moderate income is heavily dependent on directors’ fees is highly unlikely to offend a CEO or fellow directors, who in a major way will determine his reputation in corporate circles.
8. If regulators believe that “significant” money taints independence (and it certainly can), they have overlooked a massive class of possible offenders. (referring to outside directors)

Those attributes are two legs of our “entrance” strategy, the third being a sensible purchase price.
We have no exit to strategy –we buy to keep.

That is one reason why Berkshire is usually the first- and sometimes the only –choice for sellers and their managers.

This is the synopsis of Warren Buffet speech in 2003.

10 Qualities of a young Investor

Pre-requisites of a young investor:

1. Discipline – Most essential quality.
2. Ability to follow rules
3. Love for hard work.
4. Ability to identify mistakes and rectify them
5. An investor must be skilled in reading and understanding financial statements.
6. A trader should have good knowledge of technical analysis.
7. One must spend time on study, analysis and preparation of trading plans.
8. Youngsters should find good role models like Warren buffet, Mark Faber, Peter Lynch, Rakesh Jhunjhunwala etc.
9. Never hesitate when it comes to investing in knowledge.
10. Young investors would do well to make long term plans and goals and work towards achieving them.

Message to young investors:

1. Have a definitive goal in life and work towards it.
2. You should sacrifice some hobbies in order to achieve your goal.
3. Dissociate yourself from people who have a negative influence on you.
4. Dare to dream.
5. Do not afraid of failures.
6. Be open to change and in imbibing new ideas.

Please comment on this article.

Source: Business line.

Indian for day traders and long term investors

Indian stock markets may remain volatile today. In my opinion, BSE Sensex may lose around 200 points to day. Day traders should invest judiciously. Don’t take long positions in major shares. Book profits immediately. Wait for results of companies and weekend inflation rate, before entering into the markets. Closely observe the crude oil price and rupee value.

Stock Picks:

Shares for Day Traders:

Nagarjuna Construction, Punj Lyoid, wockhardt, TCS, Deccan Chronicle, ITC.

Shares for Medium – Long Term Investors:

Ranbaxy, Wyeth, Tube Investments, Crompton Greeves, ITC, India Glycols, Deccan Chronicle, Hikal, Graphite India, Bannariamman Sugars

Famous Quotes from Investment gurus:

1. Diversification is a protection against ignorance. It makes very little sense for those who know what they are doing – Warren Buffet.

2. In this business if you’re good, you are right 6 times out of 10. You’re never going to be right 9 times out of 10 – Peter Lynch.

Invest carefully. Use your own knowledge before investing in stocks.