Mistakes we made-How we lost our first million(s)?
Printed From: The Equity Desk
Category: Market Strategies
Forum Name: Fundamental
Forum Discription: Discuss the operations and finances of any of your companies.Make the other participants aware on the investment opportunities available in a stock on PE free cash flow etc
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=290
Printed Date: 16/Apr/2025 at 9:01pm
Topic: Mistakes we made-How we lost our first million(s)?
Posted By: monu_duggad
Subject: Mistakes we made-How we lost our first million(s)?
Date Posted: 07/Sep/2006 at 6:36pm
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Forum
Its fashionable to bask in the glory of success...we love to talk about our multibaggers and decisions which went well.....
I think we should also discuss the mistakes that we have committed regarding stock selection,when greed got the better off us....when we falterred in our search of hidden gems...etc....so that we learn from each other's mistakes and carry this "baggage" while making future decisions...
e.g. basantji,in one of the articles on this forum "smart vs overmsmart money" talked about his mistakes during the techboom...(dsq,adhikari brothers of the world)...
lets share our mistakes if u r comfortable doing tht...(many of us dont want to revisit scratch the itchy surface...)...
i will inaugarate the discussion...
...am new to investing...but yes...i ventured into day trading...one day i made quick buck on bombay dyeing by shorting it.....next day (i mean it) i lost all that when i shorted it again....it went up like anything ....and yours truly hasnt applied stop loss.....was a big jolt to me..and since that day i havent touched bombay dyeing ------------- If you think you can,You Can |
Replies:
Posted By: prosperity
Date Posted: 07/Sep/2006 at 6:45pm
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I sold a stock that i was very convinced about - when it became a 3 bagger ... But now, i look back after 2 years of selling it .. it is 20 bagger !
Biggest risk is not taking one :)
Smartness is to take a calculated risk ... than an uncalculated random risk, OR than not taking one at all
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Posted By: basant
Date Posted: 07/Sep/2006 at 7:24pm
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I love talking about my tech boom days. I had this sectoral approach then also but mixed it up with PE and EPS. It goes something like this. In 1997 I bought Satyam and sold off because I was making 25% in one week. Satyam used to move like crazy then. The best part (coz I learnt from it) was in the year 1999. I reentered software buying DSQ, Silverline, Pentamedia and Sri Adhikari (yes no Global and no HFCL missed it). In about 8 months I had a list of 5 and ten baggers with me. My over all portfolio was up seven times I had also invested in some non performing consumer and Pharma companies and I started to get worried. I thought that software stocks would fall and was working on the idea of converting everything to Infy and Satyam but I stopped. The red chips that I was owing traded at a PE of 100 times and the blue chips I wanted to own were at a PE of 100 times. Now I did not want to sell a low PE stock to buy the higher PE ones. As prices fell these stocks fell further so relatively their attractiveness improved. I bought more at each decline by borrowing from a Bank. But the prices kept falling and the margins had to be met by pledging more shares - since there was no surplus cash. At one point in time I had pledged all my shares and would buy new ones only if they were bank approved. Finally inevitable happened. the bank sold off my shares and credited the a/c with the balance. I learnt the most important lesson of my life 1) Always invest in the sector leader either No. 1 or No. 2 2) DO not buy any thing that you do not understand .Better to buy things that you can see. 3) If you have made a 400% on a stock you need to lose only 80% to break even. 4) Do not look at the PE alone. “An investor shall not live by PE alone” I have tried putting http://www.theequitydesk.com/forum/forum_posts.asp?TID=177 - My investing strategies on a different section at this forum. Most of it has been created through reading and experiencing (losing) and hardly anything by listening. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vivek Sukhani
Date Posted: 07/Sep/2006 at 8:18pm
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well, my biggest folly has been teledata informatics. I saw the Ad on CNBC and rushed to buy it, when I came to know that its Annualised EPS is 38 rupees and its trading at 45.I managed to get rid of this baggage @ 20. The Lesson that I learnt was that never have a stock which Advertise advocating the purchase of its share.This was perhaps the only time I hadnt devoyed any time before trading long, and perhaps will also try to make this the last time.
Vivek
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Posted By: kulman
Date Posted: 07/Sep/2006 at 8:34pm
| Brokers chase clients to trade in F&O for their own good, which is fat brokerage fee. |
Posted By: reetesh
Date Posted: 07/Sep/2006 at 9:19pm
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This is one of your point that you learned from year 2001. If you have made a 400% on a stock you need to lose only 80% to break even. What do you mean by this can you elaborate further.. ------------- When going gets tough, that’s when tough (people) gets going. |
Posted By: basant
Date Posted: 07/Sep/2006 at 9:41pm
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A stock that you buy at Rs 100 goes to Rs 500 and that it 400% returns. WHen it falls back to rs 100 it is only a 80% loss on Rs 500.
That is why they say "It is easier to destroy somethinga 100 times faster then it was built"
When the market fell from 12,700 to 8800 we lost 31%. Now to recover that 31% we need to grow 44%.
It may sound simple and academic but it means a lot. It tells you how tough it is to make money and also to keep it. A slight error at a markjet top (known only when it is made) can cost you years off hard work.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: reetesh
Date Posted: 07/Sep/2006 at 9:51pm
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Great point. ------------- When going gets tough, that’s when tough (people) gets going. |
Posted By: Ajith
Date Posted: 07/Sep/2006 at 11:11pm
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A few things I wish to share from my mistakes and gains in shares:
1.Sucess is bad because it makes you overconfident'
2.Diversify widely.There are plenty of opportunities and a concentrated portfolio will narrow your thinking.
3.Ideally we should be investing to make money and not for work as an end so buy those shares at great prices that you need not sell unless you have to.
4.Most importantly,look out for the greatest opportunities,the biggest multibaggers and grab them and stick with them.
5.Keep sufficient safe liquid reserves no matter how great the opportunities. ------------- Ajith |
Posted By: monu_duggad
Date Posted: 08/Sep/2006 at 12:30pm
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great to hear such experiences....so much to learn....basantji...what went thu your mind when you saw those 7 baggers and 20 baggers tumbling down ?..also any experience with derivatives n f&o ? or to stretch further...commodities? ------------- If you think you can,You Can |
Posted By: basant
Date Posted: 08/Sep/2006 at 12:51pm
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Nothing I felt sleepy the whole day long. You know I slept with the closing bell at
So when the twin towers fell I was invested but this new money that had just come was with me. I bet big with software post the fall. SSI at Rs 105 and HCL Tech at also the same level. I pledged these shares at the Bank and bought more of the others. These stocks doubled in 4 – 6 weeks and I shifted to something else. In about 3 months I had made a decent capital by selling out and getting in. Made some money in Polaris as well. – Pure luck I would call it today. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: BubbleVision
Date Posted: 08/Sep/2006 at 2:05pm
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Effectively, you are trying to imply that the market "GODS" saved you. Congrats... Much to learn from every entry in this topic.
I actually started my stock market career on Sept-11 2001. I went Long Sterlite Optical Futures (it was in F&O Then). during the day and was sheduled to travel to delhi the same night. I was just 20 then. When i came back after a week, I saw that my initial Capital was lost and so was my trading virginity. It was then i decided to learn and read as much as i could on the markets. I made good money in the fall of 2002 and early 2003. I made money on sterlite Opt by shotring the stock until the day the stock was taken out of F&O, when it was Rs 35/- Odd.
Infact (still) my best trading day has been 10-Apr-2003, when INFY (down 30%) and Mastek (down 50%) Cracked. I was short and made a ton of Money. This gave me a bearish bias. I subsequently missed a part of the original rally in sensex from 2900 to 4500.
Since then i am always balanced (In my analysys and also in portfolio). I still always have one short or another to balance my portfolio.
I am basically an index Trader, but do keep shorts for an unexpected Fall (when the underlying bias is bullish) in the market to reduce the sharp ratio as well as the risk. Last year and earlier this year, The best shorts were ArvindMills And Polaris. Currently i am short on Hero Honda.
I am a Technical Analyst now.
------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: monu_duggad
Date Posted: 08/Sep/2006 at 5:36pm
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great basantji what you did needs mountains of convication and courage...dint your family and friends oppose you ,fearing a disaster?
bubble...great..i think index trading is comparatively safe...rite?.hero honda..many people are bearish on it...fundamentally also this stock looks bit weak thanks to lower than expected august numbers..plus TA's are also bearish on this stock.....whats your current take on index? short or long ....going by whats happening in global markets....
even IT sector..whats your view in short term....i read conflicting reports today on TCS..karvy in its morning newsletter advised traders to short IT stocks(tcs infy wipro satyam etc) and icici advised people to go long on tcs futures....its always helpul i guess to look at what is happening in f&o sector before making a final decision
------------- If you think you can,You Can |
Posted By: basant
Date Posted: 08/Sep/2006 at 6:13pm
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Yes you guessed it correctly. My family was against it tooth and nail. But once I was in it they backed me when things went off hand temporarily. For instance they would morally boast me when the Bank called in for margins I was leveraged (up to my neck) with Bank finance in 2001 and needed the NASDAQ to close higher so that my bank did not call me for margin. I played the "game" in the way I told you Rs 10 is meaningless if I am looking at Rs 50 for a decent standard of living. All throughout the last 5 years http://www.theequitydesk.com/forum/forum_posts.asp?TID=177 - . I do not play blind in the sense that for each of the companies that I have invested I have read the history of how the global peers evolved and then comparing strategies. In one of the companies that has an internet presence I am anxious to know from the management as to how they would increase revenues and values. I have also tried putting my strategies across and they have been listening and improvising significantly on that. You do not need conviction when you have not made any money. You need tons of it after you have made it because then there is the risk of losing all or a substantially part of it. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: BubbleVision
Date Posted: 08/Sep/2006 at 6:44pm
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Hi Monu...I like to trade the index as the EOD volatility is much less.. something which is suitable to my stomach. Yes, i would agree, that one cant make multibaggers out of index, but we can make decent return, as we can use leverage.
HeroHonda.. i am short as i dont expect that one to rally more than the market.. i am trading that as a hedge, to decrease the overall protfolio volatility. It does not need to fall. It can stay stable and i am happy.
IT sector.. is currently the best sectoral index currently (from a more longer term view.. Not an intraday or a 1-2 day view). It is a buy and i would rather buy CNXIT than any stock specific. Yes, the volumes dry up when the market falls, but then we can short Infy, as that is the largest weight on the index and if that falls, then the index Falls.
I generally dont follow any stocks on charts as i am working with Currencies. There i am bullish on US$.... with a 1-2 years point of view as long as the $-Index (85.55) is above 84.00. (monthly close) That would be additional source of bullishness for the software sector.
I see the Euro-$ trading AT PAR in 1-2 years.. from 1.2678/82 currently
World Index -- i track that very closely and have to admit, that is not nearly as bullish as the Indian Markets. India was the best performing index in the world (after Morrocco which was up 10%) and gained 8% in August. The EM index gained 2% (approx) ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: manishdave
Date Posted: 08/Sep/2006 at 11:17pm
| I had sold CIPLA in early 90s and Satyam in late 90s too soon. Last year I had sold Sanghavi Movers below 100 for no reason. I was telling everybody that it is multibagger and I held almost all other positions. I still don't know why I sold it. |
Posted By: xbox
Date Posted: 12/Sep/2006 at 6:05am
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When I see my track record, I see more of bad sell decisions than bad buy ones. I explain few from both sides.
1. GE sipping. Buy at 200 was good call but selling at 212 due to failure of demerger was bad call. Stock within week touched 270. I had 1100 shares.
2. JP cement. I don't know if buying in Yr 2000 was good call at 37 but selling in 2003 was very bad call. Now it is around 400.
3. SAIL. Buying sail at 9 ruppees in Yr 2000 was definately good call but selling at 40 was bad call.
4. Buying silverline in 2000 was definately BAD call. Nopoint talking sell call.
5. Buying maxIndia in yr2000 at 86 was good call but selling in 2003 was bad call.
6. Buying mnm in Yr 2000 was good call at 90 but selling in 2003 was very bad call.
Now I feel stock market is lot more simple than I have though. Buy from either BSE500 and just take care of sell call. SIMPLE!! right. ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: Vivek Sukhani
Date Posted: 12/Sep/2006 at 8:55am
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Hi Vipul,
I remember one of the lessons which my daddy has given to me and still gives to me is something which I will explain now...
He asks what do you think we are investing when we are buying a stock. To most of us, it will be money. To a fewer of us, it will be time. To a still fewer of us, it will be effort/energy. And to the very rare-breed, it will also be faith.It is that breed of investor, who knows how to invest in faith will ultimately be the winner.We simply lack faith or what Basant says, conviction. If I look at your mistakes, I would like to say fw things, especially about GEShipping and SAIL, as these 2 companies I like tracking.You know what, when these analysts were saying so much rubbish about governance atGEShipping I was eagerly waiting for the company's stock price to fall.Because, if you sinmply think, the failure was not a significant one in my eyes, like the way they were saying( created post for the same on this forum).For me corporate governance is more than disclosures and successes. To me, it is acceptance of the wrong and admission of mistakes. To me, its shareholders' rewards.To me, its sensitivity towards' shareholders.And as a matter of disclosure, I must say that I myself hold these company's share and have been an accumulator since it reached 136 odd levels last year.
I think SAIL is an enigma.It has such a wonderful turnover and profits that it seems mind blowing to get it at this price. We complain of its huge equity but then the floating stock is quite appropriate. I beleive, you made a fair exit at 40 and by something else with your money would havefetched you better results, I suppose.
Mahindra and mahindra was indeed a bad exit.But then Vipul, I think you are being too modest, you must have made lots of money with whatever, you must have bought at that point of time..
 ... that was such a great period of investment.... |
Posted By: kulman
Date Posted: 13/Sep/2006 at 6:47pm
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Vivek Jee
After reading your Father's advice, I recall what is written on Sai Baba's (Shirdi-wale) photo:
SHRADDHA & SABOORI
These two are very important in life, not only in markets. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: BubbleVision
Date Posted: 13/Sep/2006 at 8:15pm
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I am likely to make all the mistakes that Vipul has made If i am Value investor... So i just decided to be trader...Vipul.. you can take help from BasantJi so that these things are not repeated next time. ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: basant
Date Posted: 13/Sep/2006 at 8:24pm
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Hey Bubble no one is an expert here I have made bigger mistakes losing money in JUNK companies at least Vipul lost an opportunity toi make larger profits. Again I use the copy and paste function: Every One has to bear.. The Pain of discipline Or the pain or regret and dissapointment ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 24/Nov/2006 at 12:45pm
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Members please share some of your mistakes here.
It is always better to learn when some one else has lost ,money then to lose your own money. SO the money that each one of you lost could be used as charty by contributing their histories on this section.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nikhil090
Date Posted: 24/Nov/2006 at 12:58pm
| I for one have made lot of mistakes and still continue to do that. In 1998, I identified Pantaloon at 13 but did not followed it.. In 2003, I tracked Pantaloon at 50 and then left. In 2004, I bought pantaloon at 130 and sold at 170. same for financial technologies, bought at 60 and sold out at 120. this is case of missed opportunities.. Lot of money lost on junk companies also.. that in another post sometime later.. |
Posted By: India_Bull
Date Posted: 24/Nov/2006 at 7:05pm
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My mistake was I was following the strategy `Buy the loosers and sell the winners. I was a short term investor then (2 yrs back ..I found Rajesh export , it became multibagger after I sold at 2 bagger.I sold L&T at 600 some years back.I sold Siemens at 2000 . (and bought back at 4000. still holding) .I always thought that these stock have reached its peak..
Of course some of the calls were proven right..
(Bought Balrampur chini last year at 70 and sold at 160).
I was a fan of Gujrat NRE (bought at 50 , become multibagger sold at 125 (after bonus)... both stks not doing well currently.
------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: Crimsonarcher
Date Posted: 28/Dec/2006 at 3:23am
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Last 3 bull runs I've been looking to buy L&T and still today i have not bought it while it has gone up phenominally. Same for financial technologies and Indiabulls. Indiabulls infact was started by my collage seniors who recommended it to me. I just failed to recognize the potential in that company :-( |
Posted By: xbox
Date Posted: 28/Dec/2006 at 4:47am
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Well there are couple of misses from me. Otherwise I could be CrorePati ..
1. In 2004, when there was tussle between Mahindras and dalmia for gesco. It was at 18. I put numerous buy orders at around 17 or 17.5 but it did not reach there and I remain poor. At 150 I again saw the counter and thought now it is too expensive. Event: Mid 2004
Lessen : Chase the price when you are 101% convinced.
2. I wanted to buy Bajaj Hindustan in late 2004, It was around 45 and then I was little greedy so I missed it and I remain poor. Event: Mid 2004
Lessen : Chase the price when you are 101% convinced.
3. I wanted to buy unitech when it was 600 (pre split and bonus) but then I was little greedy so I missed it and I remain poor. Event: Mid 2004
Lessen : Chase the price when you are 101% convinced.
4. I wanted to buy Dhampur sugar at 15 but then I was little greedy so I missed it and I remain poor. Event: Mid 2004
Lessen : Chase the price when you are 101% convinced.
Somehow, I spotted multi-bagger very well but then greed restricted from being rich.
 Overall Lessen : Always Make Only Those Transactions, Which Have Potential To Change Your Life. ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: kulman
Date Posted: 28/Dec/2006 at 8:16am
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A small suggestion, if you don't mind....please modify the tag-line by putting a word positively at appropriate place...Just to make things crystal clear..
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: xbox
Date Posted: 28/Dec/2006 at 8:35am
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A small suggestion, if you don't mind....please modify the tag-line by putting a word positively at appropriate place...Just to make things crystal clear..
-----------
Dear http://www.theequitydesk.com/forum/member_profile.asp?PF=127&FID=2 - kulman , Adding tag 'positively' is too difficult for me. I hope I have midas touch like RJ and other's has, and then it could have been quite easy to me to add this tag. ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: kulman
Date Posted: 28/Dec/2006 at 8:41am
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Sure...you're probably right. I just felt it...so suggested.
Have a nice weekend...and new year celebrations! Woh TV18 waala bottle khatam hua kya? ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: basant
Date Posted: 28/Dec/2006 at 9:22am
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Sure...you're probably right. I just felt it...so suggested.
Have a nice weekend...and new year celebrations! Woh TV18 waala bottle khatam hua kya?
__________________________________________________________
I liked your opinion on adding the word "positively". You have really a very keen eye. FOr that Tv18 thing I am slowly becoming normal - maybe we need to see the price come down a bit so as to reduce the hangover.
I was also thinking that since we made 50% from the last day of trading to the day of relisting all the investors held on to the stock but had it gone up by 3%-4% esch day not sure how many would have held on.WHen price goes up slowly that way the inclination to take profit is always higher. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 29/Dec/2006 at 5:24pm
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because the animal called "profit booking" would not be there....
-----------------------------
Yeh TAU log beech beech mein naye naye jaanwar laayenge naa...Un se bachna padega.......Maine socha hain ke VIP se achha ek-tho* FAULADI chaddi banwata hoon!!
*This suffix tho is meant for guys from Bengal, Bihar side!
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: nikhil090
Date Posted: 14/Jan/2007 at 1:48pm
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Today I remember another one of my mistakes.
One day, there was a big result on the 1st page of ET(somewhere in 1999), Manna glass has declared superb numbers and have declared a dividend of 30%. At that time Manna glass was at Rs 9. Me and my friend bought the stock at 9.5 in hope of 30% returns. The dividend never came and we still hold the stock but the stock does not trade... After that I have always been cautious about front page results of not so known corporates..
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Posted By: PrashantS
Date Posted: 22/Jan/2007 at 11:53am
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But The most important thing is damage control...though we learn a lot from the buffets and Peter lynch....indian markets dont depend on that ...no fundamentals no technicals....operators drive people crazy..... imagine one day your happy you have made 30 to 40% money and the next week your loosing 10% of your real investments...i think ....we can all start a thread and collect data to do damage control....coz no one wants to loose their reall capital... Is it better to remove the real capital you have invested from time to time... again we would still make money...as being a small investor i cant take stake liek jhunjhunwalas....please share your expereince and i am sure TEd members can come out witha plan to control your fear and save the real capital you invest.... One of the ideas i do as a small investor is i pull out the reall investment and hold the profit in stocks...........there might be many ways ....but if u make a loss it really hurts very badly and the guys who are rich get stronger...and make the markets volatile for small guys like us and give us sleepless nights....... So lets discuss...i dont want to loose if not gain to much...in equity markets..and people have been wipped out in such markets.......I BET I DONT WANT TO BE ONE...AND I AM SURE YOU DONT WANT TO BE IN SUCHA STATE.... |
Posted By: basant
Date Posted: 23/Jan/2007 at 12:18pm
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Some day, sometime this market will get you me and everybody no doubt but the trick is to earn enough to be able to lose a bit. For example if you have a 20 bagger portfolio and you lose 50% you can still walk away with a 10 bagger.
SOme months back we had a brain storming session related to this at:
http://www.theequitydesk.com/forum/forum_posts.asp?TID=307 - http://www.theequitydesk.com/forum/forum_posts.asp?TID=307
Om Shivaya: Any updates trhat you might share with us about that thread or you are too busy with Nucleus these days ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: omshivaya
Date Posted: 23/Jan/2007 at 2:05pm
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Uhmm, well Basant sir...Nothing as such to share. And nopes, am not busy with Nucleus at all. I dont run Nucleus. I just buy a share and then get to other things, so nothing to be busy about. Any updates on Educomp btw? How do you see the results? ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: xbox
Date Posted: 05/Feb/2007 at 9:12am
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First sector and then stock. There are broadly 3 phases in investing life (I have lived all 3, not sure if more left)...Basant jee is there anymore ?
phase 1. When one acts based on broker/friend. In this phase silverline looks more compelling as compared to INFY. This is learning cycle. More you lose money earlier you get out from here. This is quite diversified state.
phase 2. This phase starts after a considerable gap. Here, you remember your dark past. and try to pick all solid companies. You look at PER, BV, dividend yield and management etc. Here you are not loosing money but you are also not making multi-baggers (you wanted). Sometimes you don't get even index return. Sometimes you think that phase 1 was better given a little luck (as by then all you picks in phase 1 might be multi-baggers). This is quite diversified state.
phase 3. This phase starts immediately after phase 2. Here one try to bet on sectors & management. By this phase you are aware of many scripts and market functions. Here you apply what you learnt from earlier phases. You not only pick phase 2 type of companies in identified sectors but also you pick phase 1 type of companies in same sectors yet you feel quite relaxed. This is moksha state (no more birth/deaths, no more buys/sells). This is quite concentrated state.
I have lived every word of these 3 phases. I reached phase 3. One has to traverse all the way from phase 1. God bless all. ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: SORUB
Date Posted: 05/Feb/2007 at 9:30am
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i did lot of mistakes but didnt get battered...i have lot of opportunity cost...bad sell desisions...no desipline.no money management...
bought ashok leyland at 19 and sold at 29 bought hinzinc @200 and sold at 900 guj amb@64 and sold at 79 vijbank @10 and sold at 74 pentamedia @13 sold at 10 slasteel @26 and sold at 12 .....big list....but i didnt make big losses but huge lost opportunity... one should be a good learner to survive in market...markets are great ninja masters where you can learn about life... |
Posted By: BubbleVision
Date Posted: 05/Feb/2007 at 9:35am
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Hi SORUB
markets are great ninja masters where you can learn about life...
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What's a Ninja? ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: Vivek Sukhani
Date Posted: 05/Feb/2007 at 9:43am
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Vipul,
Although I agree with you somewhat yet I have some difference of opinion as well. You can escape Phase 1 if you are so attuned, if you have the discipline. With some bit of education of investment science( although, you may also call it a art), you can also straightaway enter into stage 2.Also, sometimes you dont transit from stage 2 to stage 3 for your entire life. Some rigid fundamentalists never got into stage 3. This is especially true for people who never look at anything else apart from the figures. they work in this matter with a very scientific rather than a artisitc bent of mind. Investment Gurus like Walter Schloss or Benjamin graham will fit this bill.
In my opinion, the transition of phases is also very blurred. You will find numerous examples of people staying in stage 1, making rich gains during the bull run and later squandering all their gains ... they promise to themselves they will never make the same mistake but the lure of good profits and a dangerous seelf confidence( rather, over-confidence) that they will call it quits at the most opportune time, make them stay in Stage 1....
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Posted By: SORUB
Date Posted: 05/Feb/2007 at 10:01am
| bubble ji,i like cartoons and action movies...you can see master teaching students in a very tough manner to teach them decipline...for me markets and these ninja/kung fu masters are same... |
Posted By: BubbleVision
Date Posted: 05/Feb/2007 at 10:04am
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Thanks Sorub... A new word and and and art learnt. ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: basant
Date Posted: 05/Feb/2007 at 10:57am
Excellent thoughts. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 05/Feb/2007 at 11:00am
You are right Vivek but I feel unless a person sees stage 1 he would never go to stage III. People who enter the market in Stage II remain there that way irrespective of what happens around them. Nothing wrong in that because finally at the end of the day we chose our way of life.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 05/Feb/2007 at 11:11am
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for me markets and these ninja/kung fu masters are same... ---------------------------------------Sorub jee......very well said....
Lekin, dono mein thoda sa fark hain.....us baare mein MTV thread mein ek competition hain.....all members are invited to participate with their contributions/views. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Vivek Sukhani
Date Posted: 06/Feb/2007 at 5:39pm
| Agreed, basant... you need to lose to understand how multibaggers are created. If this is what you wanted to say, I beleive its a right presumption. Stage 2 type of investors will never be able to get into emerging sectors.the difference between the 2 is like what Mr. Pranab Kumar Bhattacharya(PKB200) told me on yahoo messenger... CHETAK and an elephant.But frankly speaking, I have always adopted the elephant style as against CHETAK.... I beleive value stocks are good when they have the capacity to grow for it is growth which changes the value of the value stock. However, if a growth stock grows there is no change is value brought about... unless it can super grow, then growth stock will grow. I beleive its more risky to stick with growth stocks especially if they are in transition. A case can be made of Mahindra GESCO, and many logistic plays which were looking so good just 8 months back..... today we hear so little about them. sugar was once touted as the most growing sector when ethanol related stuff was doing the buzz.... today its neither a growth nor a value sector.Growth stocks have very high betas which make them out-performers but as a result of which, they have a very high dispersion of returns. value stocks have very low betas as the dispersion of return is also very very low. Its ultimately buying and selling appropriately is what matters. |
Posted By: Vivek Sukhani
Date Posted: 06/Feb/2007 at 5:52pm
| So, in a nutshell its all in the type of field( read, markets) you are fighting on... So, if the field is flat and plain( read bull market) a Chetak is what will do for you.... however, if the field be muddier( read bear markets) an elephant will stand you in far greater stead.... |
Posted By: basant
Date Posted: 06/Feb/2007 at 9:44pm
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Yes you make an interesting point but we as investors have a right to decide whether we want to be a chetak or an elephant.What I wanted to say is that it is very difficult to be both and the entry(learning) costs are far higher in being a chetak then in an elephant. We all choose our own ways methods of investing so as long as we are disciplined then it is OK but if we try to become monkeys (mungerilals) one day in the hope of becoming an elephant or a chetak then the odds are that we would become neither. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Mohan
Date Posted: 10/Feb/2007 at 4:49am
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Vipul,
I have gone thru all the phases 1,2,3 that you have mentioned here.
You can say Been there and done that.
1. bought kachra on tips in the hopes of fast buck
2. bought blue chips while they flatlined.
3. shorted stocks that shot up and had to sell bluechips to pay for losses.
4. hit bottom when I lost it all the day of Cargill attack when I had forward positions that broker squared off to pay for margin.
Went to Zero.
Ever heard of Haarela Jugari.....
I claim complete responsibility for my actions.
------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: basant
Date Posted: 10/Feb/2007 at 9:22am
Excellent. This is what I say gaining (experiencing) from other people's losses.Thank you for sharing your experiences with us. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Mohan
Date Posted: 10/Feb/2007 at 10:48am
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Its been a pain. ( Unfortunately, I cannot say Pleasure) Hopefully, Most of you all are not Laato ke bhoot, like me.
Baato se maanjao ge  ------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: BubbleVision
Date Posted: 10/Feb/2007 at 10:57am
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Mohan -- great experience shared by you. Thanks.
In equity markets everyone (i think) is Laat ka Bhoot... ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: kulman
Date Posted: 10/Feb/2007 at 11:14am
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Mohan jee......ek sheyr arz hain: Akl aati hain bashar* ko, thokare khaane ke baad Rang laati hain heena**, pathhar pe pees jaane ke baad!
* bashar=human being
** heena=mehandi
p.s.: can't translate such couplets
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Vivek Sukhani
Date Posted: 10/Feb/2007 at 11:24am
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Hi Mohan and Basant,
I dont know whether its possible to learn from other's mistakes but nonetheless it helps a lot. With whatever little experience I have, I know just 1 thing, that go long in a particular co's stock in which you have the confidence to buy double the quantity if prices get halved which one has initially bought. Its a very very difficult thing to master, for most people are taught to do pyramiding and advised against averaging. But I find this abhorance for averaging to be most intriguing especially if someone calls himself a fundamental analyst. For technical analysts, the situation may be different as they trade long on break outs and trade short on break downs.So, they are more in sync with pyramiding. I have also learnt that abhorance for charting is also a very dangerous thing to do. Sometimes, what may appear a fundamental excellent buy may not be the case, if the charts appear to be destroyed. Its the long term charts which has the biggest teaching value. Its when you look at the 10 year chart, you realise what bear markets are capable of doing to your morale. When things fall in a heap, to keep heads steady, is one of the most difficult things to do. I remember a post here where someone mentioned about his acquiantance having made a fortune in stocks by simply sticking to trading in A-Group shares and buying when everybody was selling and selling when every one was buying. He created many assets from stocks. I beleive that is what one has to do. Discipline is all that is required, but its like saying you need to have the Amrit to become Amar in this world.
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Posted By: kulman
Date Posted: 10/Feb/2007 at 11:34am
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Discipline is all that is required, but its like saying you need to have the Amrit to become Amar in this world.
---------------------------------------
At first u need to be Abhay!
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: BubbleVision
Date Posted: 10/Feb/2007 at 11:56am
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Its the long term charts which has the biggest teaching value.
------
I agree Vivek... Its the Long term charts which ultimately count. That is why i talk about the long term charts in my posts. Long term (Weekly) gives us the direction... The short term (Daily) gives us the entry and exit. ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: Vivek Sukhani
Date Posted: 11/Feb/2007 at 12:37pm
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Well, Abhimanyu was also Abhay but ultimately he was slain....its the discipline of Arjun which is required to get into and also (and more importantly) to get out of chakravyuh....else having Abhay you may be brave, but may also get martyred....which none of us want, I beleive...
I am rephrasing it Kulman....Having Abhay is a necessary condition to get Amrit, but having the discipline is the suffcient condition to get the Amrit. So, in case you are not Abhay, there is no way you can get Amrit, but even if you may have abhay, you will only get Amrit if and only if you also have discipline....
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Posted By: BubbleVision
Date Posted: 11/Feb/2007 at 12:41pm
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Discipline is the only (yes ONLY ) way to make money in the markets in my view.
Very good explanation Vivek ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: basant
Date Posted: 11/Feb/2007 at 1:33pm
Very relevant but I still feel that discpline cannot be learnt but can only be earned (by losing money). ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 11/Feb/2007 at 2:35pm
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U r absolutely right, Vyaas Jee....err....Vivek bhai. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Vivek Sukhani
Date Posted: 11/Feb/2007 at 2:50pm
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I will give you an example of lack of discipline which I displayed.... I bought a well known company by the name of Teledata Informatics @ 44, and sold it @ 20. The reason I bought it was I saw an an ad on revered CNBC saying its annualised EPS was 38 rupees.... Perhaps the only time I rushed to buy a stock was when I immediately asked chachaji throygh whom I trade to go long on this company. Thereafter it started sliding and I decided to sell it 20 when I said to myself enough was enough.... now in the hindsight I realise how much wrong I was....I am not repenting that I sold it at 20.... FOR I BELEIVE I SHOULDNT HAVE HAD THIS CO. AT THE FIRST PLACE.... now that its above 40 doesnt make me repent that I sold at 20.... that I bought this sort of a stock, is what I repent. Thats where the discipline comes in... now I have perfectly geared up mu mind that I will biu a stock if and only if, I have the courage( read, abhay) to buy double the quantity I had initially bought if its price gets halved.... else I am not going to enter that company, be it look excellent on charts or on the basis of fundamentals. Having made up my mind on this count, I look at the chart of that company to arrive at my entry points. Also, I have reduced my trading days to a bare minimum, and I buy after I sell something and I sell only if I have to buy something. I have realised keeping cash in useless exercise for such a mentality never allows you to invest at lower levels... you become so fearful that after it has got halved you think it will get to a qyarter and what happens is that it becomes four times and you are left with nothing but cash. . It is the cash flow planning which you have to do, and I have realised that dividends are a far more reliable source of income compared to capital gains so, I no longer rush to book profits as I earlier used to.
I also agree that bear markets are very very different but then you cant wait for it looking up in the skies.....have a necesarry balance of cash and stocks and never be lopsided on one of them... thats the time you are most likely to be hit. I beleive its way too risky, to be either fully invested in stocks or to be completely out of stocks. Have a proper cash flow planning and remain invested with the scrips you have utmost faith in and chances are , you will reach there, if you dont allow yourself to be shaken up unnecesaarily by either greed or fear.
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Posted By: Vivek Sukhani
Date Posted: 11/Feb/2007 at 2:55pm
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Hey Kulman, me too young to be a bearded rishi.....and too inexperienced to be a saint....
By the way, in case I be uttering anything non-sense I will be glad if someone makes me know that....so that i may refrain from using my tongue a bit too much....
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Posted By: kulman
Date Posted: 11/Feb/2007 at 3:03pm
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In this modern globalised world where, one man's terrorist could be another's freedom fighter...........
applying similar analogy........
what makes sense to you could be....*&%$%*&!!....... & vice versa too......!!! ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Vivek Sukhani
Date Posted: 11/Feb/2007 at 3:17pm
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Its really difficult to resist calling you Uncle.... |
Posted By: basant
Date Posted: 11/Feb/2007 at 5:07pm
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I have realised keeping cash in useless exercise for such a mentality never allows you to invest at lower levels... you become so fearful that after it has got halved you think it will get to a qyarter and what happens is that it becomes four times and you are left with nothing but cash.
____________________________________________________________
Thank God I have finally got someone to second me on this. This is my take on this whole cash business:
http://www.theequitydesk.com/forum/forum_posts.asp?TID=177&PN=6 - http://www.theequitydesk.com/forum/forum_posts.asp?TID=177&PN=6
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: omshivaya
Date Posted: 11/Feb/2007 at 6:51pm
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Agree with you on this one Vivek ji. Cent-per-cent! ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: basant
Date Posted: 20/Feb/2007 at 3:22pm
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It takes courage to be a pig. It takes courage to ride a profit with huge leverage....
________________________________________________________
Bubblevision I have experienced being a pig and I want to tell everyone that while emotionally it might not be the best way to feel things financially it is the most rewarding. I had shared those experiences http://www.theequitydesk.com/forum/forum_posts.asp?TID=290 - in this section .
I love leveraging. Buying stocks on borrowed capital (not futures/ options). Banks charge interest rates at 10%-12% and if we are confident of doing 20% the incremental returns add up to our total portfolio return. But I would advise to keep this borrowed money at less then 20% of the total portfolio. This is because the investor has to take care of the margin requirements as well.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: BubbleVision
Date Posted: 20/Feb/2007 at 3:44pm
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I am more than willing to be a "Pig" in the market ... at any given time.
I leverage using (Index) Futures but NOT options.
I guess by being "Pig" we know that we may be slaughtered but then its all a question of Risk and Reward and if the potential reward is huge... one has to go for the Jugular.
To stop from being slaughtered compeletly... keeping a SL is advisable for most of the people (Everybody may not agree with this)...At the end of the day we have live another day to fight a new battle.
In Commodities also i use leverage but only very selectively. I dont trade Energy personally.
I had advised someone to short COPPER at 2 times leverage in Oct-2006. By the start of 2007 we kept adding on fresh rallies and declines and ultimately reached a Leverage of 5 times, and then the copper Collapse happened in Jan-07. It was basically a trade on my conviction as the client was only doing exactly as i directed.
 However similar trade on CRUDE did NOT result in any profit and in the sharp rally from the bottom we gave most of the profits which were accmulated from October....Sometime it pays off and sometime it dosent.
 BasantJi.. please move these posts to http://www.theequitydesk.com/forum/forum_posts.asp?TID=290&PN=7 - this section ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: omshivaya
Date Posted: 20/Feb/2007 at 8:06pm
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Basant sir/Bubble jee, can you please explain this leveaged business in detail. I mean using a practical example, like if I have enough money to buy 100 shares of TV18 let us say at price of 580, then how will leverage help me in this regard to multiply my earnings? When I use my broker, I see two ways to buy any share: cash & margin
If I buy using margin, what are the different parameters in it and what do they mean?
Suppose I buy a share of TV18 by choosing margin in the drop-down box, then can I hold onto that share for as long as I want or sell it whenever I want or is there is time limit to when I can sell it? Like any share I buy using margin has to be closed on that day itself. That is daytrading and I wouldn't like to do that. Any better alternative?
Like buying a share in leverage and keep buying further and sell all of them later on, let's say 1 year later.
If someone can explain in a really layman term, I would really appreciate it and enjoy it..! I wanna try it out once and see if it suits my style! ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: PrashantS
Date Posted: 20/Feb/2007 at 8:20pm
| margin trading is really risky omshiva.if that is what you are taking about...suppose say u have 100 bucks and you have the power to buy 400 bucks ...now if the stock goes down by 25% and u have to meet your margin and u land up with nothign ..so if that is what your asking ..i would say it dents your intial capital employed....on the postive side if you gain 10% or more u gain out of margin trading ...it is like gaining 40% on intial capital ...i am sorry if that is not what you are asking |
Posted By: BubbleVision
Date Posted: 20/Feb/2007 at 8:46pm
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Using the practical example of TV 18 which you have given... Suppost that you have 58000 and you want to purchase the maximum TV 18 (current at 580) which you want... You can get 100 shares (100*580).
Now leverage can be done in 3 Ways
--------------------------------------------
1) Put the stock as a margin and take a LOAN from the bank under "Loans against stock" category. Banks usually extend a loan upto 60% of the Market value of the stock (it varies to the category of the stock). With the loan money you buy fresh quantity of TV18...(which would account for leverage). However the banks generally charge Higher interest on this loan. One cant sell stocks which are pledged.
When you repay the loan along with the interest... the pledge on the stock is removed and one can sell as you wish.
Risk: If the market value falls after you pledge the stock to the bank then the bank will call you to repay the loan (or to reduce the loan according to new market value) within a very short period, failing which the bank will sell the stock off to pay itself.
2) Financing through Broker...Same as above just replace the word "Bank" with "broker"...
Broker usually makes the client sign a client agreement of Margin lending before accepting the client under Margin...
3) Leverage using Futures...(only possiable on stocks which are in F&O)
Stock Futures require only a small amount of margin (usually 20%) to buy the stock. Using any stock eg..Infy..Lot 100
To buy 100 Infy in Cash one has to shell out 300000...but if one buys Infy Futures... then he requires only Rs 60000/-, Called initial margin. Once this initial margin is paid ..one requires "Mark to market (MTM)" margin (varies according to relationship with broker).. from which the daily deposit and withdrawls are made. If the Infy goes up .. then there would be a credit in MTM and vice versa. The initial margin is recieved when the trade is squared off. ........
So effectively one is leveraging 500% on Infy Futures and a 1% move in Infy results in a 5% move in his portfolio (if he has only one infy position)
Commodity Futures require only 5% margins...That is why most people lose their shirt in commodities. They are NOT more volatile than stocks but "seemingly higher volatility" is due to low margin requirement.
Hope most of the points are clear....however if there are any questions...SHOOT.
------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: kulman
Date Posted: 20/Feb/2007 at 9:14pm
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Nicely explained there.....Members should keep in mind the topic of this thread too before proceeding! ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: BubbleVision
Date Posted: 20/Feb/2007 at 9:27pm
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Om ... i would recommend you to read this thread in Detail from the start ...Page 1. ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: omshivaya
Date Posted: 20/Feb/2007 at 10:15pm
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Excellent explanation. I am definitely attracted to the 3d option of futures. If handled properly, it can act as a real magnet for wealth. However, please clear some doubts on futures:
1) I have 58,000 rupees. How many lots of TV18 futures can I buy with this, supposing TV18 is at 580 now.
2) What is the definition of 1 lot. Is it equal to some number of physical/demat shares?
3)Is there any termination date for a future, or I can hold them as long as I want. Kindly explain this aspect in detail, like what happens when market falls and when market moves up taking an example of TV18 falling to let's say 500 and TV18 rallying to 600, after I purchase TV18 futures worth 58,000(how many can I buy with this money by the way)?
4)Can I sell the TV18 future anytime and anyday after I buy it(even after 1 year)?
5)Suppose I have 100,000 rupees left in my account, after I purchase TV18 futures worth 58,000 rupees when its stock price is at 580. Now, till what level can keep TV18 falling before my broker makes a "margin call"?
6)Does the broker sell off my futures(or contracts...whatever it may be called), if I don't have enough money in my account immediately or he gives me sometime before he sells them off? How much time minimum is given by futures broker before my futures is sold off by them, due to not enough cash in my account?
7)
a) Can I buy a futures contract and keep holding onto it for as long as I want, without specifying a termination date?
b) And even if I do specify a termination date, can I sell off anytime before that or expand the termination date to a future date without the current futures contract expiring/becoming meaningless. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: omshivaya
Date Posted: 20/Feb/2007 at 10:29pm
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Also one more thing Bubble ji...can the futures contract be converted to shares of the company at any point of time, with the extra amount being paid in cash. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: omshivaya
Date Posted: 20/Feb/2007 at 10:30pm
I have done that Bubble ji. Shall do it again. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: BubbleVision
Date Posted: 20/Feb/2007 at 6:24am
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OM the answers are given below according to what they are asked
1) TV18 is NOT in F&O.
2) There are no fixed Number of shares in one LOT . They vary stock to stock, http://www.nseindia.com/content/fo/fo_mktlots.htm - here is the current list which will get revised after this Thursday. The minimum LOT size would not be less than 2 Lac Rupees.
3) If you see the Futures contract...they are named like this ..FUTSTK INFY 22 Feb 2007. ........this means that the Futures would exire on 22-Feb. ...This is FEB Futures. At any given point of time there are three contracts trading on any stock so when the FEB Futures expire .. you can rollover your position to Mar futures. And when Mar Futures expire you can roll over the the APR Contract. This means that you can keep the contract for an infinite amount of time by Rolling over.
If INFY (1 lot = 100 shares) falls by Rs 100/- then you will have to pay the broker Rs 10000/- as a MTM Margin. If it rises by Rs 50 the next day the broker will give you Rs 5000/- . This will carry on daily till you hold the contract. This is the reason there is a MTM margin with the broker so that this does NOT bother the client on a daily basis. However if any clients wants to daily issue cheques and recieve it .. the brokers would have to comply.
4) Yes you can sell the contract anytime or anyday after you buy it (you will have to keep rolling over the contract to keep it for one year) .
You can even sell it first ... with hope of lower prices ahead and then buy at a later date. This is called "Shorting".
5) The broker will NOT make you a margin call if you have money in your account. He will ask for more margin only when your MTM margin is lost.
6) That depends upon the relationship with the broker and the market condition (some time it is just a couple of hours and some time it is a couple of days). Incase of an online broker ... they will square off the position very quickly.
7) you cant do that and you will have to keep rolling over the contract if you want to keep it for a longer period of time.
8) Existing stock futures cannot be converted into physical stock at this point of time as Futures are currently cash settelled. However according to reports SEBI is taking steps to make them physically settelled also.
The MINIMUM lot size for any futures would be Rs 2 lac. ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: BubbleVision
Date Posted: 20/Feb/2007 at 6:32am
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Trading in F&O is NOT easy.. as one can get easily lured into doing crimes... I would NOT recommend it to anyone. Pay respect to Kulman's view.
------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: xbox
Date Posted: 20/Feb/2007 at 6:43am
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F&Os are weapon of mass destruction - WB ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: sanjay3
Date Posted: 20/Feb/2007 at 6:48am
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bubblevision plz explain the effects on cash markets open intrested added trading at preimium trading at discount increase in Fand O turnover/trading ........ |
Posted By: omshivaya
Date Posted: 21/Feb/2007 at 1:26pm
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Thank you very much Bubble ji for your answers. And yes, I see the topic of the thread too Kulman ji and Vipul ji. Thanks very much. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: BubbleVision
Date Posted: 21/Feb/2007 at 1:54pm
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Sanjay i will reply in the evening. BasantJi .. please move these F&O posts to http://theequitydesk.com/forum/forum_posts.asp?TID=656&PN=3 - here ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: omshivaya
Date Posted: 25/Mar/2007 at 12:22pm
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Basant sir, I wanted to ask you one thing. It struck me last night.
1) The stocks which you were holding before the 1999-2000 crash, how many o fthem do you still hold(if any)?
2) In the bear phase of 1-2 years in that time, were all stocks down or did the good ones start moving up above their original prices , after having fallen 40%-50%?
3) What's your view on: in bear phases, after having fallen 40-50% along with the overall market, do companies showing good earnings come up and keep going up despite markets being in a bear phase in 1-2-3 years? Or does the stock also stay in that slump until the bull run starts after 2-3 years. Just wanted to know what your experiences has been like.
Thank you very much!!!! ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: tigershark
Date Posted: 25/Mar/2007 at 1:00pm
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dear basant here is something that i have thinking bout some time now in bull mkts we all make money but bull mkts are also the time when we collect the largest number of DUDS in our portfolio that they are duds does not manifest until the bull mkts are well and truly over thats bcos we have been told to have conviction and confidence in what we buy now my question to you and all the teds is how does one identifyDUDS in ones portfolio and take remedial action when the bull mkts are going on so that one does not cut a sorry figure later on and beleive me duds can form a significant part of ones portfolio during bear mkts ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 25/Mar/2007 at 1:10pm
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The stocks which you were holding before the 1999-2000 crash, how many o fthem do you still hold(if any)?
None.Sold all of them in 2001 at almost their alltime lows.
In the bear phase of 1-2 years in that time, were all stocks down or did the good ones start moving up above their original prices , after having fallen 40%-50%?
Since technology was the bubble, tech stocks were BATTERED. They moved up 15% then fell 25% each rally looked real because as illinformed investors we did not know that the music had stopped and it was time to stop dancing. Stocks from other sectors did fall a bit but then they were in deamnd. Dr. Reddy was among the few to have doubled or so in 2001.
What's your view on: in bear phases, after having fallen 40-50% along with the overall market, do companies showing good earnings come up and keep going up despite markets being in a bear phase in 1-2-3 years? Or does the stock also stay in that slump until the bull run starts after 2-3 years.
If it is large cap or something where visibility is a problem then stocks do not recover but sectors or companies which have strong visibility always recover faster then the markets because finally the stock price is a slave of its earnings.
Smallcaps, unknown names and non sector leader stocks get almost wiped out whereas the sector leaders are the best companies to hold in a downturn. If Infosys fell 50% the lesser known names fell 75% to 99%.
Companies with all hope and no earnings get butchered because then the market does not want any long term talk which is indefinete in nature- value buys become more valuable because in case of a bear market the only things that markets want to focus on are:
1) PE
2) Dividend yield
3) Visibility
4) Leadership status
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: BubbleVision
Date Posted: 25/Mar/2007 at 1:47pm
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I-Flex was another stock which went up in the bear phase of Tech Stocks, since its listing in 2002. I-Flex has also given Bonus once. Look Infy is currently at its life high, while the other stocks like Polaris, Visual, HCLT, Aftek all other scores of mid-cap stocks have failed to recover. ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: omshivaya
Date Posted: 25/Mar/2007 at 5:30pm
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Thank you Basant sir, for those answers. Appreciate it!!!! ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: xbox
Date Posted: 25/Mar/2007 at 6:46pm
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Look Infy is currently at its life high, while the other stocks like Polaris, Visual, HCLT, Aftek all other scores of mid-cap stocks have failed to recover. -------------
CISCO, motorola, Alcatel, IBM are have not touched their all time highs or even near to it, where markets wold wide is near or at all time highs. ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: BubbleVision
Date Posted: 25/Mar/2007 at 7:31pm
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That is because their representative index "Nasdaq" is still 50% below its life time highs.
Nikkei 225 is 60% below its all time high, Dax is 15% below its all time high.
The world Stock index is at an all time high when measured in USD but is below all time highs which priced in Euro's.
Ofcourse everything hits a new high every 6 months when priced in Yen. LOL ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: Vivek Sukhani
Date Posted: 31/Mar/2007 at 2:09pm
If this is the case, then why not focus on the four things in all the investment planning decisions.Sure, by focussing on those four things you will miss an occasuinal bharti or a Infosys, but then we can avoid a host of non-performers.
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Posted By: Vivek Sukhani
Date Posted: 31/Mar/2007 at 2:17pm
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Also, the yield dynamics will now change dramatically. As a dividend monger I try to make a yield of at least more tha the savings rate and if possible I try to make higher or equal to 2/3 of the gilt rate....Now if the gilt rate be 8.5 p.c. and if the AAA rated Vorporate Bond be available at a positive spread of 150 basis points thereby translating into an applicable yield of 10 p.c.2/3 of 10 p.c. of 10 p.c. comes out to 6.67 p.c. ..... how many companies are available at that yield?????? So, what was earlier a good yield stock will become not so attractive....
Long Live The Bears!!!!
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Posted By: PrashantS
Date Posted: 26/Jun/2007 at 2:29pm
| this is such a great post ...coz it is so important to see what can acttually happen if things go out of hand ...unexpected disasters occur....and i think hats off to Basantji and all the members to share their views.. |
Posted By: nav_1996
Date Posted: 26/Jun/2007 at 3:15pm
| I think it is important that at TED we discuss how can we be challenged by a Bear Market. Another thing we need to realize that some stocks may be good but may not be meant for all. And this distinction becomes very evident in a Bear Market because of difference in our mental and finacaial capacity to deal with nominal/real losses. It is good hear different voices of Vivek for Div Yield or may be Jayendra for value investing. At end of the day you are better off with a style which gives you conviction and you lets you sleep at the night. This does not mean we stop learning from other. |
Posted By: Vivek Sukhani
Date Posted: 26/Jun/2007 at 6:38pm
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There is nothing sacrosanct about the markets......which theme will rule when no-one knows, but all I know is that always pray dividend yirld never becomes the theme.......the kind of battering which non-yield stocks can get can make the most settled one become horrendously restless.....thats why I always maintain one must always some quantity of FMCG stocks in his portfolio......in such a market, if there is one sector which gets least affected is this sector..........whatever opinion i have been able to form of bear markets it is thanks to other people's narrations.......its when you will see career getting totally spoilt. Its one think talking about multibaggers, and another thing mananging multi-losers. People are rushing to buy AB Nuvo, but I have seen the stage when one of my acquaintance wanted to sell Indian rayon and there used to hardly any takers and the price was near 100......tata motors traded in band of 60-100 for a period of 1.5 years..........there was a time when my broker asked me not to touch an OBC at 33.......a Vijaya at 11, a bank of india at 30 odd.........its a sheer matter of divine grace for which i will always be thankful to Lord Almighty, that i was a buyer during that period......but it was indeed a period which is a nightmare to all the bulls......very very few bulls survived that onslaught.....can you imagine a bank like SBBJ which was offering a deposit rate of 7.5 p.c. and it had a dividend yield of more than 10 p.c. Whenever you repent that you have not managed to participate in a rally, at the same time before you embark on such a course, always ask if you have your life jackets on......Gravity is a very strong force, trust you me, it is!!!!!!!
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Posted By: BubbleVision
Date Posted: 21/Jul/2007 at 7:53pm
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Over the last month and a half, we have seen many TEDies join in, almost all of them are young, and probably in the markets for the first time in their life! As such, I suspect it would not be uncommon to see mistakes one which have already been committed. We cannot avoid mistakes all together, as unfortunately they have a very big family, with many cousins and siblings. However, what we can certainly do is that we can learn from them and promise that we never commit the same mistake again. Importantly and hopefully we, through this thread we can learn from others mistakes and therefore save money and the pain of learning without having actually to go through the mistake personally. Therefore, I would like to request all the TEDies to contribute to this thread on their experiences in the market. I would only request one caution. I guess, it would NOT be uncommon to see F&O Losses and losses due to recommendation(s) in the financial media. Therefore, please see the real cause (internal Greed or Fear) rather than blaming FA or TA or any other art or science for the losses. Thank You for your contribution and spending your valuable time to read this. ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: stockaddict
Date Posted: 01/Aug/2007 at 6:30pm
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We all make mistakes, Prosperity's post reminds me of my own experience. Just yesterday i was going through my trade details for the last 2 years and guess what I figured I had 500 Bharti @ 225 , 300 3 i infotech @150 and I sold them for 10% gain in a months or so. so much for the short term game even if i had held them on till now i would have made more than i did trading short term all these days and selling out as soon as i got a 5-10% jump. Ive missed the bus all along but its never too late to learn.
Another mistake most new ppl do is going in Futures trading without realising the risks it present. It is easy to say put a stop loss but very hard to practice.When u make a loss u convince urself that u can make a similar gain and get deeper in to it. The leverage makes it worse, u come out when u r in profit too soon and stay on too long with the position when in loss. It is just not worth it unless you have got strong discipline, skills and nerves !!
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Posted By: prosperity
Date Posted: 01/Aug/2007 at 10:42pm
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Thanks stockaddict ... you are referring to the post posted long long back - which is the second post on this topic ..
For Brevity, i sum up my biggest mistake that has made me mature -
THE BIGGEST LOST ONE CAN HAVE IS NOT BY BUYING A STOCK, BUT BY NOT HOLDING FOR LONG ENOUGH - THE STOCK THAT ONE BELIEVES IN !!
As Buffet says - the time to sell these kind of stocks is NEVER !!
The Temptation to sell a 3 (or N) Bagger makes us emotionally blind to see that we have a 30 (or 10N) Bagger in making ....
Thanks again for relating my words to your experience - Your experience makes me even more mature
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Posted By: tyler_durden
Date Posted: 29/Aug/2007 at 4:13pm
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am delighted to hear that...and one must heed to the advice of experienced and knowledgeable people .... my initial years in stock market were full of follies...
1. i sold winners
2. averaged out losers
3. bought with margin money
4. futures and options
5. neglected advice of experienced people
i did everything that i could do to lose my hard earned money...but it taught me great lessons:
1. Listen to wisdom of experienced people who have been successful...one can be successful by repeating wat others did...
2. Hold on to your winners and cut losers ... flowers are maintained and weed is removed...
3. Listen to Taus or brokers on Tv but do what insiders in the industry says...
4. Have patience...patience is a virtue in stock markets...
hope to add more points to this over the next few years.... ------------- If you aren't fired with enthusiasm, you will be fired with enthusiasm. |
Posted By: India_Bull
Date Posted: 29/Aug/2007 at 4:18pm
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Hi Tylerjee,
You have summed up it nicely, I think I also did the same things except trying my hand at margin money and future and options .I think most of us go through this, but who leanrs this reality fast is going to be the winner !! ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: CHINKI
Date Posted: 04/Sep/2007 at 9:10am
I was going through this thread. Saw this question unanswered by Bubble. Would Bubble or any TEDdy able to throw some light on this?? ------------- TOUGH TIMES NEVER LAST, BUT TOUGH PEOPLE DO |
Posted By: CHINKI
Date Posted: 04/Sep/2007 at 9:55am
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The answers have been shifted to this thread http://theequitydesk.com/forum/forum_posts.asp?TID=656&PN=4 - F&O
Basanthji, while shifting to another thread, both Q&A should be shifted. ------------- TOUGH TIMES NEVER LAST, BUT TOUGH PEOPLE DO |