Tuesday, February 25, 2014

New age startups back to 2000?

AHA! the buzz is all around about internet startups all over again. The Amazon's of India are coming in all colors and sizes. Everybody wants to sell through the internet. Irony is a firm which did not sell ads and adds real value to the system just got sold for 19bn USD (watsapp). Which makes you wonder whether you really need to earn revenues and show ads?

My brain is too small to get the big picture right on technology. But from the basics of business nothing sustains that people don't use. If there is one common theme to all business valuations its the value they create for the end user. Obviously for each one that is being created to add value nine others are going to get busted.

My focus here is on the ones who will get busted. 100 times sales are not here to stay. VCs have to place bets so they will, the promoters are getting cash and pay so they will tell you why are they the next big things, so if you are neither of the two you have to understand how not to get blown away by them. First is not to join them and second is not to get distracted by them. True, a lot of them would be minting money but the fact of the matter is it's not sustainable. A lot of businesses that sustain at their very core are boring businesses. We all know what happened to Kingfisher and you should know that nothing changed in life of its promoter due to it.

Coming back to the headline of the article, from the look and feel around a lot of these young kids and post financial crisis passouts are taking it for granted and think it requires a bunch of cool dudes to run businesses which gives me the sign the end may be very near for most of them. Lets see!   

Monday, February 24, 2014

Never pay for market research and subscriptions

As I regularly come across sites like moneycontrol are flush with ads of subscription. Why would an expert claim to have the best ideas and ask money for it. If you think a little its like saying I know how to make money from markets but I will tell you for a small amount of money. Why would somebody leak out strategies to make money to you without implementing it themselves? The answer is these strategies DO NOT work. They might have certain probabilities to make you money and its all too random. I would rather park my money with a person claiming to generate return and pay him a cut out of the profits instead of paying him subscription for strategies or research and then taking the headache of implementing it myself.

So next time you come across these articles give them a pass. 

Saturday, December 1, 2012

7 rules of trading

The learning from trading

1) Don't Quit: Never give up
2) Limiting downside: Define risk limits and never breach them, maximum people lose the trick here
3) Risk-Reward: Always take prudent risk-reward decisions
4) Preparation: Never undermine the importance of keeping updated about each movement of the market and news flow surrounding it
5) Selection: The opportunities are unlimited, you only have to take limited ones to make it big. So don't worry, be patient and strike only once a trade idea fits in your approach and risk-reward metrics
6) Breaking rules is a recipe for disaster (from personal experience)
7) ALL RULES ARE A MUST, you can't give less than 100% 

Tuesday, December 1, 2009

Importantance of technicals realized

As I take steps towards a career in the financial markets let me share something which I've been picking up for the last few days. I had given hope in the last few entries here in the short term trading. But maybe I was wrong. Being a novice I have a right to be wrong. There is something called technical analysis and there is something hidden in it.

As a trader one should think technicals rather than fundamentals. In the short term, you've got to learn technical analysis so as to avoid mistakes which I've been making for the past one year or so. And if you are looking at the long term value then go for the fundamentals. So bottom line for an investor fundamentals and for a trader technicals are a must.

So I take back whatever was said for the short term trading. Guess, its possible to make money in the short term also and that too with reason and not solely based on luck.

Rakesh Jhunjhunwala made his initial money in the markets by trading and I would be shocked if told that he didn't use technical analysis to do that. So there's a lifeline again for me to jump into the markets with renewed enthusiasm with something backing apart from the fundamentals. Technicals looks so obviously important now and wonder how I miss them for the past one year.

One more learning added then. Both go together if the aim is to get in depth into the market movements. The fundamentals as well as the technicals.

Thursday, October 8, 2009

The feelings after first year!

The feeling just doesn't sink in that at this point in time I am making terrible losses. Surely stocks are one place where goddess Saraswati and Lakshmi find hard to co-operate. Although its been few weeks since I have stopped intra-day trading, the losses have their tails up. Who would have placed a bet on the markets at 17k after last October and even in this kind of markets if you manage to lose close to what I have lost it'll really take some effort. Its a terrible feeling which I am undergoing. I am really passionate about the stock markets and to do so horribly bad after one year it gives me immense sadness. Its not guilt, its not that I am blaming myself but its kind of a thing which happened and could have happened to anybody. When I started the markets were falling like never before in some years and when I withdrew after losing hope and patience there has been this sharp rally. The fundamentals don't change so quickly and even though I also conform with its ultimately fundamentals that drive and decide the fate of markets but the underlined word here is ultimately. The wait has to be for years. All the more when luck is not on your side. We have seen some astounding recovery in some of the sectors where stocks have quadrupled or quintupled but there are stocks which have been giving negative returns when indices are up around 100% from the bottom(no points for guessing I've been stuck in those). I write this pretty much to give myself patience more than anything else and a consolation that these bad times won't last and the passion would pay back. I have already stopped taking very short term calls and in the future try to take as longer calls as possible. But still you need somethings to go your way to earn money here. I don't know what is that. But I have learned that if you invest wrong or greedily sooner or later you get punished. There is no quick money in the markets and believe me if at all there are they are very few who are exceptions to this.
One more point for those who'll start like me and end up reading this. The analysts always make an effort to keep a dichotomy of views and there is no doubt in my mind that they are not dependable. I mean if you observe their recommendations they always had their fingers on "sell" when markets were 8k-12k and if you saw your screen in the last two months(15k-17k) its always been "buy". If you use them as a source of data for earnings or gathering information about a company its fine but the moment you start believing in their recommendations you are in for trouble. It has got to be your study, your understanding of a company, its business and fundamentals and your feeling and intuition that is going to make you money in the markets if at all you have to. Otherwise there are a lot of mutual funds where you can park your money in. If its a passion to invest yourself then be prepared to sweat it out, to learn it the hard way and to make efforts to get better earnings to beat everything around. Eventhough I've lost in my initial stint at the markets I hope and would like to believe that there is more in it for me in the future and I'll get better returns than all out there and I'll be one of the best in this business.

Thursday, September 10, 2009

Why is it important to make money

Its always been one of the most important ones to quantify success This five-letter word is not so small. The question is why is it important to make money.

As life evolved people divided themselves into different professions. Some got into food, some houses, others clothes, some brought water, some gathered information etc etc. Slowly we named them farmers, manufacturers, builders, retailers, traders, teachers, engineers, doctors etc. People divided work and with mutual consent agreed on sharing. Then based on performance and requirements people got categorized into classes and became more or less "important". That laid the foundation of money. You got rated on what you have, how you perform and how useful were to others. I don't know whether all these processes and evolution was fair or not but all this led to the importance of "money".

The things you get, the respect you earn, the perception you and others have about you, the general well being feeling are based on primarily money or wealth. Opinions might differ and there will be exceptions but in general the argument holds. And in there lies the importance of money. I know I can do away with my needs with lesser money. But if my need involves my fulfillment of dreams and aspirations and if they don't end with basic needs I need money. Money gives power to buy things, realize my dreams, to live life on my own terms, it reduces stress, it makes me feel stronger, it buys me time. That's most of the many reasons I want money and want it badly.

Thursday, November 6, 2008

Reason to appreciate my markets

Stock Markets have money in them : true. Stock Markets have only money in them : false. People like to stay away from them. Not sure what the reasoning behind is. Gambling for some and fear of losing is probably the reason they don't do it. There's something to gain also. It involves an individual, a company, a business, a sector, an economy, a nation and then the world. It leaves the choice to you and gives you an option. Everybody is welcome and everybody is equal in the stock market's world. You are your master and you are the boss. The decision is left to you, the analysis is yours, the perspective is yours, the loss is yours the profit is yours. There are no differences there is no unequal treatment. You are as good as your view and your vision. There's freedom to back your opinion and to make a point. It only you for you but it's not only you it's the whole world with you which is playing with you. Enjoy the difference of opinion. The difference may not dwell only from logic or knowledge. The feeling and sentiment are equally important. And yes it's the sentiment of people that is important to understand. It gives you puzzles to solve which are not only mathematical and may not be objective. Here you'll find experts contradicting each other. If you think you have read all the books understood all the concepts you can answer the toughest questions stock markets will prove you wrong. If you are one of those who believe in everything's possible and you can master the tricks of trade it might change your belief. There are no laws here there is no limit there is no definite strategy there is fun there is uncertainty there are challenges.