As I am writing this on Monday, June 20, 2022, Sensex and Nifty are at the lowest level this year 2022. Not sure that it will go down further, but one thing is for sure it will move up someday, it’s just a matter of time. Here is the Nifty live chart at 1.46 pm on 20-Jun-2022 – Source: Google:

From 18,000 levels down to 15,300 levels. That’s a decline of 13.18% this year. Is this good? No, it isn’t good for short-term equity investors, but it’s just another day for long-term equity investors – this kind of volatility they have seen many times.

This cannot be classified as a stock market crash – it is just a mini-crash. This is not the first mini-crash. Indian investors have witnessed much deeper and strong crashes before.

Here is the Indian Stock Market Crash List:

Crash of 1982 – short-selling shares – primarily of Reliance. Stocks around 110,0000 was short sold. The value of shares decreased significantly. The BSE was shut down for three consecutive days.

Crash of 1992 – On 28 April 1992, the BSE experienced a fall of 12.77% – due to the Harshad Mehta scam.

Crash of 2004 – UPA 1 election crash. On 17 May 2004, the BSE fell 15.52% – its largest fall in history (in terms of percentage).

Crash of 2006 – On 18 May 2006, the BSE Sensex fell by 826 points to 11,391.

Crashes of 2007 & 2008 – The Great Recession a.k.a The Financial Crisis of 2007-2008 – on 21 Jan 2008, the BSE fell by 1,408 points to 17,605 leading to one of the largest erosions in investor wealth.

Crash of 2009 – On 6 July 2009, the Sensex fell by 869 points to 14,043.

Crash 2015 – On 24 August 2015, the BSE Sensex crashed by 1,624 points and the NSE fell by 490 points.

Crash of 2016 – The stock markets in India continued to fall in 2016. By 16 February 2016, the BSE had seen a fall of 26% over the past eleven months.

Crash of 2018 – BSE and NSE fell sharply on 2 and 5 February 2018, sparked by the comments of the Finance minister’s proposal in the budget speech to introduce a 10% long-term capital gains tax (LTCG) on equity shares sold after 12 months.

Crash of 2020 – On 1 February 2020, as the FY 2020-21 Union budget was presented in the lower house of the Indian parliament, the Nifty fell by over 3% (373.95 points) while Sensex fell by more than 2% (987.96 points). The fall was also weighed by the global breakdown amid the coronavirus pandemic centred in China.

Source: https://en.wikipedia.org/wiki/Stock_market_crashes_in_India

But if you look at one year chart of Nifty (from Jun 21 to Jun 22), you will see that it’s not fallen too much from June 2021 to June 2022:

So is there any reason to panic? No. Why? Because this too shall pass. Experts will keep saying in every crash that – this time it’s different. But they have been proven wrong every time.

Here is 15 and 20 years return of Nifty as of June 2022:

Even when a crash of 2022 is going on Nifty has given a CAGR (Compound Annual Growth Rate) of 11% and 15% in the last 15 and 20 years respectively. Please remember the crashes written above. In spite of these crashes, the returns are well above 10% for investors who have stuck with their investments with patience.

So my advice is – just keep calm during a crash. Do not take panic decisions and exit when you see a small loss. This is normal in stock market investing. You can hold the stock till you get a reasonable profit and exit.

How to Profit in a Stock Market Crash?

Do you remember the most popular advice from none other that the greatest investor in the world – Warren Buffett (CEO of Berkshire Hathaway)?

Side note: Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is currently the chairman and CEO of Berkshire Hathaway. He is one of the most successful investors in the world and has a net worth of over $113 billion as of June 2022, making him the world’s fifth-wealthiest person. Source: Wikipedia

Warren Buffett once said that it is wise for investors to – “be fearful when others are greedy, and greedy when others are fearful.“

There is another saying credited to Baron Rothschild – “the time to buy is when there’s blood in the streets.” He was an 18th-century British nobleman and member of the Rothschild banking family.

I am sure you must have read it somewhere probably when you were in school/college. But did you ever do that? If not the best time is NOW – not tomorrow.

So how can you profit in a stock market crash? Just hunt for great fundamentally strong companies going for a bargain. Try to buy stock of companies that are at least 20% down from their recent high. These companies will be the first choice of HNI and retail traders when whatever situation that brought the crash gets over. These stocks will soar like there is no tomorrow – but you cannot pinpoint the exact time. It’s better to buy them now.

Suggested read: I have written an article on lessons from Warren Buffett’s letter to shareholders. This will give you some idea on how to choose good stocks at a bargain and for the long term.

Patience is the Key

After you buy you may see the stock going down further. You must show patience during these times. If you have the money and if the fundamentals of the company haven’t changed you can buy more and average out the investment in the stock to bring the buy level lower. But make sure to average out a minimum 10% lower than the previous buy price otherwise the averaging out will be useless. And just buy the same number of stocks or 50% less than what you bought the first time. Anything above this can be risky. Do not average out the third time. You have only one option wait for the crash to get over. Once the crash is over the stock will surge.

When to Book Profits?

10% is a good return or if you think the stock is good and you want to keep it longer, then sell 50% of the investment and keep the rest. This way some profit will be booked forever and you can exit the rest of the stocks at 20 or more % profits.

Do not go overdrive with your investments. Managing finance is more important than investments. You must invest the money in stock markets that you do not need for the next 5 years minimum.

If you need my help I have a course for this – Long Combined With Short Term Investment Ocean Wave Profit Booking Strategy Course

Here is the course content:

• List of 21 stocks that you must own for your entire life
• An explanation of why I chose these stocks – what were the criteria etc.
• A detailed explanation of how to invest in each stock
• How much to invest as per your income (optional)
• How to maintain a tab on these stocks
• An approach to investing
• How to start investing in these stocks
• The Ocean Wave Profit Booking System – (Swing Trading Explained – This is the MOST important chapter)
• And a lot more on how to increase your investments

… And in the email, I will explain how to make a monthly income by selling options against it.

The best part is – You may do the same logic in your current investments as well to increase the return from the stock – whatever the stock it doesn’t matter – you can implement the strategy.

You can read more about the course here:

Long Combined With Short Term Investment Ocean Wave Profit Booking Strategy Course

Below are some of the lessons an Investor should learn from Warren Buffett’s letter to shareholders. I have sourced this article from many authentic websites. I have written the most important points that an investor should learn.

1. Economic Moat Keeps Changing of a Company:

What is Economic Moat?

“Economic Moat” is a long-term competitive advantage that a company holds that allows it to protect its market share and profitability. A company with a strong moat possesses a competitive advantage that is both strong and sustainable. The most effective moat is the Brand Name. For example SONY, SAMSUNG & LG charge a higher price than their competitors just because they can easily leverage their brand name in electronics items like Smart TVs, Music Systems, Refrigerators etc.

However, with time this keeps changing.

How companies can maintain or increase their Moat?

By improving both products and services. In modern times after-sales service is very important to maintain Moat. People have access to social media, so one bad service may be read by many and can affect the Moat. Sometimes it gets so bad that it becomes nearly impossible to get back the previous Moat. This happens when companies start looking at short term profits and ignoring the long term effects.

2. In a Commodity Business Returns on the Capital is Important

In a business where copying others is easy – all will do so in effect decreasing the returns on the capital deployed for manufacturing the product. The textile industry is one such example. You get $16 jeans looking as good as $160 jeans. In the textile industry maintaining the MOAT is very important. Branded jeans may sell for $200 while the unbranded ones will not sell above $100.

3. The Flywheel Effect

Though this is an example it is true for many industries. People do not want to pay for two or more newspapers. So who survived? The ones who printed too much news and advertisements on too many pages. In short, the fattest ones survived and the rest diminished. In other words, if a company gives more for the same money it will survive in the marketplace beating competitors.

One thing here is worth noting is that the newspapers never advertised how much they are making from selling newspapers and advertising in them.

So to summarize The Flywheel Effect – it is giving more for less, then scale it and keep quiet on how you are doing it.

4. Business Operation Leverage

Companies have two kinds of costs involved.

1. FIXED COST – Example lease rent fee, a product machine repair fee (almost fixed), salaries to employees and maintenance of the physical properties of the entire business which is but not limited to factory, offices, equipment needed to run a factory and offices like tables, chairs, ACs etc.

2. VARIABLE COST – Imports, third party services, logistics, electricity bills and other bills.

Companies that have high fixed costs and low variable costs will see earnings rise faster than revenue. It may be contrary to what you may think but if a company with a high fixed cost and low variable cost is making a good profit then they know and can manage difficult times. However, companies with lower fused costs and higher variable costs will have at least 4 months out of 12 to control the high variable cost that may hit them.

Example: A sports franchise owner has a high fixed cost and low variable cost, yet once they cross the breakeven they make a lot of money. If the brand value of their team or sportsperson is intact they keep making money in each season of the game their team plays.

A travel company has a low fixed cost and high variable cost. This is the reason during COVID-19 times (2020-21) their business went down to ZERO however the sports franchise owner kept making money earning from showing the games on TV and earning via advertisements.

5. Important Fundamentals of Investing

• Know your ability (for example how much confident you are before investing in a company, how long you are willing to be invested etc)
• Once you are confident and willing to invest you must check the future cash flows of the company (for example what products they are selling and to whom, is it a B2B or B2C, plus will they be able to sustain the lower/higher prices etc)
• It is a waste of time to speculate on the future price. If a company has a good moat, good future cash flows then do not look or guess the future price
• Volatility is another name for stock market investing. Just ignore the volatility otherwise you are bound to do mistakes.
• Listening to the so-called experts on the stock market or a company is a waste of time.

6. Mr Market will Open From Monday to Friday – its There to Serve you NOT Guide You

You can only invest your money in the stock markets as you wish. The stock markets will not guide you to invest – it will only show you the rates of the stocks and give you a path to invest but won’t give you any signal of which is a better investment.

In a bear market, almost all stock prices will be low and in a bull market, all stocks will be near their all-time high. But you the investor, cannot know for certain the exact support and resistance. You have to invest in companies with strong fundamentals and sit tight for the right time to exit.

7. Risk is Not Prices Moving up or down – The Risk is the Money Invested and the Return Generated

After-tax return is the real return from a stock. You must know how much is a good return to exit from a stock. You have to keep in mind the inflation rate as well. Your return should be good post taxes and inflation-adjusted. This is possible only if you invest in companies with a good Moat and strong fundamentals.

8. Focus on the Return on Capital vs the Cost of Capital

Some people think that stocks with low Price-to-Earnings (P/E) Ratio, Price-to-Book (P/B) Ratio or High Dividend Yield is a value stock and invest in them. This is wrong. Similarly, a high Price-to-Earnings (P/E) Ratio, Price-to-Book (P/B) Ratio or low dividend yield might be a good stock to purchase. Instead of thinking about high/low PE or PB – you should focus on the return on capital vs the cost of capital.

9. Make a Note of What Does not Change in a Business

Like for SONY – it’s the Brand Value. Similarly, for others like Amazon, it’s the low price of products etc. Technology will change with time but if a business has something special for customers it will keep rocking.

10. Do Not Look at the Speed with which a Business is Growing – You Should Also Look at its Durability

If a business is growing fast it doesn’t mean that it will keep happening forever. If the company is not evolving with the latest trends and technology then it may not survive. For example, Kodak. The management of Kodak was overconfident. They kept ignoring new technology (digital photography) and did not adapt to changing market needs. When they should have used the profits to invest in new technology and advertising, they were acquiring many small companies. Kodak was overconfident in its brand value so failed. SONY on the other hand always keeps adopting new technology and also makes sure to advertise its products. Therefore they can charge a premium on their products just for the brand value.

11. Invest in the Quality of the Company and Hold as Long as the Quality is Maintained

Your investment will mirror that of the company’s progress you have invested. Even if a business is slightly overvalued, it’s better to hold on to it than a switch for a cheaper, lower-quality business.

12. Investing in a Mediocre Company Just Because its Price is Attractive is Foolish

In the long run, you will find that a mediocre business will either give a negative return or just less than FD returns or similar. It’s not good to invest looking at the price instead look at the company and its performance. A $1 can become a few cents of a bad company and $100 can become $150 of a good company in one year.

13. Do Not Leverage – Invest the Money That You Own

I have written about this in detail in this post, and this post. Even if the loan is small you will not be able to take the panic of a loss – you will immediately stop out. If the loan interest is 5% a year you will have to best this to make a considerable amount of money. Even if you make 6% a year – you will end up with just 1% profit which is not worth your time and effort.

14. Share Buybacks

We keep listening to this news now and then. Company A has offered a share buyback proposal at this rate etc. It makes sense only when a company has enough funds to maintain its position in the market. The company has no option but to invest the money anywhere else to generate a good return. The company’s stock price is below the intrinsic value.

15. Not All Earnings Are Equal

A company with too many assets that require frequent re-investments has no real earnings. When they get the cash they have no other option but to reinvest the money into their business. This reduces the profit of the company.

16. Do Not Depend on EPS alone

EPS – Earnings Per Share is misleading.

What Is Earnings Per Share (EPS)?
Earnings Per Share (EPS) is calculated as a company’s profit divided by the outstanding shares in the market. Once you get the number you can get an idea of the company’s profit. The resulting number serves as an indicator of a company’s profitability. It is common for a company to report EPS that is adjusted for extraordinary items and potential share dilution.

The higher a company’s EPS, the more profitable it is considered to be. However, depending on only EPS is not good. Today a high EPS is not a sign of high EPS tomorrow too. It does however helps when you are confused between two companies of the same sector but you want to invest in one of them. In that case, you can compare the EPS of both and invest in the one with the higher EPS.

Let’s take an example. Suppose you have some cash and want to invest in the SECTOR: COMPUTERS – SOFTWARE. The top companies are Infosys and Wipro. Both are fundamentally strong companies. Which one to select? Here is where EPS will help.

See below:

As you can see in the March 22 quarter Infosys Ltd. is the clear winner. So you can invest in Infosys Ltd.

You may be confused better Basic, Diluted & Cash EPS.

You have already read that Earnings Per Share (EPS) is calculated as a company’s profit divided by the outstanding shares in the market. A Diluted EPS is a calculation of a company’s earnings per share if all convertible securities were converted. A company keeps many securities with themselves which are not sold or traded in the primary security markets. These securities aren’t common stock, but instead securities that can be converted to common stock. Therefore Diluted EPS gives better data than Basic EPS.

Cash Earnings Per Share a.k.a Cash EPS is the operating cash flow. Cash EPS takes into account the cash flow generated by a company on a per-share basis, while the Basic EPS looks at the net income generated on a per-share basis, for a given period.

You will rarely find a huge difference between the Basic, Diluted & Cash EPS of a company. So you just look at the Basic EPS while comparing two companies for investment decisions.

17. Inflation has a Huge Role to Play

Companies with fewer assets will not be much impacted by an increase in inflation. However, companies that have to invest a lot in machinery and its parts will be impacted by inflation.

18. Be fearful when others are greedy, and greedy when others are fearful

This is the most famous teaching by Warren Buffet, unfortunately, everyone knows but few follow.

During the 2007-2008 financial crises retail and institutional investors sold huge numbers of stocks in businesses with weak and strong fundamentals – including me too :). This was a big mistake. Buffett, however, went on a personal buying spree, even penning an impassioned New York Times op-ed titled “Buy American” about the billions he had spent buying up marked-down stock.

And who came out as the winner? Warren Buffet.

Hope you have learned something from this post which will help you to select the stocks to invest in future.

If you do not have a Zero Brokerage Demat Account you can click here and open it online within minutes.

In short, the answer is YES.

There is no regulation that says that you must be a citizen of the US to buy stocks of the US company. In India and other nations, there are many mutual funds that invest in US companies like Alphabet Inc. (earlier known as Google Inc.), Microsoft Corporation etc.

I am not sure about other countries, but an Indian can invest in US markets by opening a US brokerage account. You must have a PAN to open a US brokerage account. Please also note that to buy stocks you will have to transfer money to your account first before buying the stock.

What are the Brokerage Charges?

It depends on the broker. I suggest you Google and check brokerage charges of the various brokers that allow buying stocks in the US. Though nowadays the charges are not very high. Still, you should open an account where the charges are low.

Please note that other than the brokerage fee you may have to pay some fee to the company that converts Indian Rupee to US dollars called the FX conversion fee.

How Much Can Indians Invest in the US Stock Market?

In accordance with the Liberalized Remittance Scheme (LRS), an individual can remit a maximum of US $250,000 USD (equivalent to 1,89,33,500.00 Indian Rupee – currently 1 USD equals INR 75.73), per year for investments.

Under the Liberalized Remittance Scheme (LRS), Indians can send money across borders without seeking approval from the Reserve Bank of India (RBI). The LRS has made it easier for Indian residents to study abroad, travel, and make investments in other countries.

How Much Can You Remit or Send?

As of Feb 22, the limit is US $250,000 per year per individual. This is equal to 1.90 crores. However, this may change as the RBI monitors the outflow of the money from India to abroad and may increase or decrease the limit per year as per the situation.

Why RBI Limits the Amount to Send?

RBI monitors its current account deficit and the value of the rupee. It may adjust the maximum limit of Liberalized Remittance Scheme (LRS) over time.

What Is Current Account Deficit?

The current account deficit is a measurement of a country’s trade where the value of the goods and services it imports exceeds the value of the products it exports. For example, if exports are 100 billion dollars and imports are 200 billion dollars then the current account deficit for that year will be 200-100 = 100 billion dollars. Note that if this continues for 10 years then the current account deficit will be 100*10 = 1000 billion dollars.

What Is the Current Account Deficit of India?

As on Dec 31, 2021, India’s current account balance recorded a deficit of US$ 9.6 billion (1.3 per cent of GDP) in Q2:2021-22 as against a surplus of US$ 6.6 billion (0.9 per cent of GDP) in Q1:2021-22 and US$ 15.3 billion (2.4 per cent of GDP) a year ago. Source: https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=53015#

Is There Any Other Way to Invest In US Companies’ Stocks?

Yes. You can invest via mutual funds which invests in foreign countries – HIGHLY RECOMMENDED. If you invest via a mutual fund you need not remit money to the US or pay any brokerages as this will be taken care of by the mutual fund company. However, for the charges that occur in transferring money and brokerages, they charge an expense ratio that may go up to 2% a year.

What is Expense Ratio in Mutual Funds?

A mutual fund is also a business. Investors invest money to get a good return. However, there is a cost involved in running and managing a mutual fund like office, infrastructure, electric, computers, software, accounting etc. Plus everyone working there needs to be paid. So, from where this money will come?

This money comes from a fee that the fund house deducts from the fund every year to pay salaries to its employees and manage the fund.

This fee is called the Expense Ratio.

Can you explain with an example?

Suppose Mr A aged 25 gets a job and started to invest via SIP (Systematic Investment Plan) – a highly recommended way of investing in mutual funds – ₹10,000.00 per month for the next 35 years. In between he ignores the volatility of the funds returns – this is also highly recommended. His mutual fund expense ratio is 1%. It generated a return of 12% CAGR (Compound Annual Growth Rate). Now let’s calculate his returns:

Real return: CAGR 12% – 1% expense ratio = 11%.

Compounding 11% for 35 years for a SIP of ₹10,000.00 per month:

Total deposit made: ₹42,00,000.00
Total interest earned: ₹3,88,57,363.38
Future investment value: ₹42,00,000.00 + ₹3,88,57,363.38 = ₹4,30,57,363.38

Now Mr A’s friend Mr B also gets a job and he too starts investing via SIP in another mutual fund which has an expense ratio of 2%. His investment is also ₹10,000.00 per month for the next 35 years. He too ignores the volatility of the markets and continues to invest for the next 35 years. His mutual fund generated a return of 12.5% CAGR (Compound Annual Growth Rate). Note that it gave 0.5% more returns than Mr A’s fund. So you must be thinking he will get more money when he redeems the money at 60? No. Here is the calculation:

Real return: CAGR 12.5% – 2% expense ratio = 10.5%.

Compounding 10.5% for 35 years for a SIP of ₹10,000.00 per month:

Total deposits: ₹42,00,000.00 (Same as Mr. A)
Total interest earned: ₹3,40,55,572.11
Future investment value: ₹42,00,000.00 + ₹3,40,55,572.11 = ₹3,82,55,572.11

Difference: ₹4,30,57,363.38 – ₹3,82,55,572.11 = ₹48,01,791.27

Can you now understand that even after giving a 0.5% better return than Mr A’s mutual fund, Mr B got ₹48,01,791.27 less because the expense ratio of his mutual fund was just 1% more than Mr A’s mutual fund.

Investors ignore the expense ratio when investing in a mutual fund, but it’s highly recommended that you see the fund’s past performance and also the expense ratio before investing in a mutual fund especially if your plan is to invest for a long time. A small percentage difference in the expanse ratio can have a huge impact on the returns.

You must have opened a Demat investing & trading account, if not click here to open a stock buying/selling brokerage Free Demat Account. Now if you do not know from where to start or what to do, then you are sure to do investing mistakes.

Before you start your trading/investing journey you must know the difference between intraday trading, swing trading and investing so that you know where to focus and expertise yourself. This is important because everybody’s lifestyle is different. Some people work 9 am to 7 pm and some work from 12 pm and some have night duty (security personnel, software engineers working from home for a US country etc). Plus patience plays an important part in investing and trading.

Therefore it is very important to know your trading psychology to know which style of trading suits you best and trade that.

In this article, I will discuss the difference between day trading (intraday trading), swing trading and investing so that you can trade as per your trading psychology.

And you will also read some good financial management tips in this post.

In this article, I will discuss what is the difference between day trading (intraday trading), swing trading and investing.

In the year 2007, (I was in my early 30s then, newly married and wanted to invest in stock markets, but has no idea from where to start) – a few people from a local stock brokering firm came to my house to explain about stock markets and I was done. I opened a Demat investing & trading account the next day. What happened after that you can read here. Now the story has changed but it was after a lot of struggle.

I remember in those days the most popular word in trading was Intraday trading. Not sure after years if it’s still popular among the young traders. 

Intraday trading was in my mind but I feared it because I had no idea so I started with stock investing and failed more so because I wanted to be in profit as soon as I invested in the stock. Unfortunately even today even experienced investors want to be in profit as soon as they invested. When the target was to make a profit in the long term then why think intraday? 

So as you may have guessed I failed in investing and moved to Intraday trading as it was already there in my mind. Unfortunately except for the beginner’s luck, I started failing in intraday trading as well.

I have seen that with most of the customers the story is the same. They also find some luck when they start trading intraday then they start to lose.

In those days equity intraday was more popular than options/futures intraday trading as most people did not have enough money to keep as margin to trade derivatives and most traders did not know trading options or futures.

Well, that’s a guess but I am sure that is the reason option trading became popular in 2010. See this graph:

Source: https://www1.nseindia.com/products/content/derivatives/equities/historical_fo_bussinessgrowth.htm

As you can see the growth in the Index options far out beats other derivative segments of trading. I had read somewhere that 70% of that volume in derivative trading comes in Intraday trading. 

TIP: If you want to trade derivatives master index options trading because there will be good liquidity. Please note that liquidity is very important in derivative trading else you may not be able to enter/exit a position.

What Is Intraday Trading?

Intraday Trading is a trade that is closed on the SAME DAY. This is the reason why Intraday trading is very popular. Traders get a kick/fun while trading Intraday because the profit or loss is known the same day, while in positional trading traders have to wait for a few days to make money which gets boring.

What Is the Difference between Swing Trading and Investing?

Swing trading is a trade that is NOT closed the same day and is carried forward to the next day to make a profit. However, there is a very thin line of difference between Swing Trading and Investing.

If a trader trades/invest either in equities, futures or options basically for a short term to make a profit then it is termed as Swing Trading. Swing Trading in derivatives can go up to a few days because they have an expiry date. Derivatives cannot be carried forward after their expiry day. Swing Trading in stocks can go from stock coming in the Demat account (T+2) to up to a few months but not exceeding a year. Once the investment crosses 365 days or a year then it can be called investing.
I failed 

Well from Intraday to swing investing to derivative trading – initially, I failed in each segment. However, there was one sector where I have achieved a 90% success rate – that is investing. 

Stock Investing is good but you need patience. Stock investing should be done after reading the financials of the company. One should invest only after researching well. And one should keep that money invested for a while to make a reasonable income.

I lost 7 lakhs mainly trading derivatives without hedge and proper planning. It was speculative trading. Speculative trading is nothing but gambling or buying a lottery. Gambling will never make you rich. You must first properly learn FnO strategies then only trade. My life changed after I realized that even 2% a month is a good return from stock markets. Let the Telegram channel owners or Youtube video makers say anything like make 50k per day from 10k or something like that, if I can make 2-3% a month I will stock to that and move my profits to liquid funds when I will start making 70k a month. 

That came in 2016. Till then I kept the job for financial security reasons. I left my job in the year 2016 when a comfortable income started coming from stocks markets. Today I am pretty happy that my conservative option course is helping a lot of traders since 2015. Testimonials.

My course will help you to learn 7 such well-planned strategies. You can check the course fee here. Go for the discount and do both the courses. you will learn both monthly options and weekly options strategies.

Finally What My Experience says:

• You must invest your money in stock markets but wisely after learning, researching, reading etc. but not blindly on hope or doing speculative trading or on someone’s tips even if it’s free.
• Start as soon as possible to enjoy the compounding effect till you retire.
• Do not stop learning about stock markets (I still read about an hour a day).
• If you become a successful trader bring more money into your trading account until it surpasses your current income from salary/business – THEN ONLY leave your job. I have done that 🙂
• Once you are making enough monthly income take all money out every month and invest in liquid funds. Do not invest the money male from trading in equity mutual funds because you are taking a risk and winning – so that money should not get into stock markets again – either via trading / investing or equity funds. If you want to invest in equity mutual funds keep a different budget for that. The money saved in liquid funds will help you after retirement or if you leave your job early then the interest earned will help you to sustain your family initially. After leaving the job if you depend on stock market income then the first six months will be highly stressful. this time the liquid funds will keep you afloat. Therefore profits made from stocks/derivating trading should either go into a Fixed Deposit or be invested into liquid fu\nds. I prefer liquid funds they are safe and not binding. you can not partially break a Fixed Deposit – but you can take out 500 or more rupees from liquid funds from the very next day without an exit load. 
• Learning to trade well is not impossible but is not an overnight process. But nothing worthwhile comes easy. The freedom, independence, and scaling of income in trading cannot be found in any other profession.

  I made the mistake of trying to figure out how to trade stocks on my own or by taking tips and lost. It took me years to become profitable because I didn’t seek to find proper education or a mentor to guide me in the beginning. Today the world is a different place. There are many courses available. However, to date, I have not found a single site that has content like my site (the one you are reading) and such testimonials on the site.

Details of my Course 1, details of my course 2, course fee.

Thanks for reading. Please bookmark my site because I will keep writing new articles each week. You can come back and learn a new topic every week.

This is the most common problem with traders, especially the new entrants. No, actually the problem is widespread. Even experienced traders find it hard to control greed and fear while trading.

I remember one person who is my client told me once that he made 2 crore profit from almost the same investment and then lost approx. 3.5 crore and is now left with 50 lakhs.

So what destroyed his wealth? Greed not Fear.

What is an example of fear destroying wealth in stock markets?

It is more prevalent among mutual fund investors. When stock markets tumble they either stop their SIP or just withdraw all money in fear from their mutual fund investment.

Similarly, a trader in fear takes out a small profit when he could have made more just by waiting a few hours and when it comes to losses; they let the losses run in hope for a reversal. They do not cut short their losses in fear that if they do, they will lose money.

Ultimately expiry comes and they end up losing four times the profit made in last trade.

With a proper plan you can control greed and fear, but do you plan before a trade? Or still, speculate?

Here is one email that I received a few days back which is asking the same thing – how to control greed and fear.

Kathir-email

How to Control Greed & Fear?

1. Never over trade. If you have 5 lakh in your trading account any trade you take must be with a stop loss of 1% of the entire capital in your account. Which means even if you trade with 1 lakh out of that 5 lakh, you must ensure that the max loss that you can take is 5000. Make sure you do not take more than 1% loss of your entire capital. This way if you win even 50% of the times – you will stay in the game for long.

2. If you lose you lose, do not get into revenge trading to get back the money lost.

3. 10% per month is simply not possible for long time. If you over trade you may lose 10% a month but not make 10% a month.

4. Fear taking naked trades. Means never take any un-hedged position in either options or futures. If you hedge your trade then the fear of losing too much money will automatically goes as hedging ensures you lose less. All the strategies in my course include hedging.

5. If you made huge money in one trade do not risk all that money in the next – you will lose all. So even if you are a good trader and doing good most of the times – keep 1% stop loss rule intact for your entire account across different segments and for your entire trading career.

If you follow the above rules you can overcome greed and fear.

Data Patterns IPO Subscription Details:
 
IPO Opening Date: Dec 14, 2021
IPO Closing Date: Dec 16, 2021
Issue Type: Book Built Issue IPO
Face Value: ₹2 per equity share
IPO Price: ₹555 to ₹585 per equity share
Market Lot: 25 Shares
Min Order Quantity: 25 Shares or multiples of 25
Listing At: BSE, NSE
Issue Size: Eq Shares of ₹2 (aggregating up to ₹588.22 Cr)
Fresh Issue: Eq Shares of ₹2 (aggregating up to ₹240.00 Cr)
Offer for Sale: 5,952,550 Eq Shares of ₹2 (aggregating up to ₹348.22 Cr)
Qualified Institutional Placement (QIP) Shares Offered: Not more than 50% of the offer
Retail Shares Offered: Not less than 35% of the offer
Net Interest Income (NII) (HNI – High Net Worth Individual) Shares Offered: Not less than 15% of the offer
 
Net interest income = Interest earned – interest paid by the banks or financial institutions.
 
Update on 14-Dec-21 @ 12.45 pm:
 
GMP (Grey market Price) today is ₹610 which means the grey market is expecting shares of Data Patterns to list around ₹1195 ( ₹585 + ₹610), believe market observers.
 
This means investors may benefit from listing gains.
 
About the Company
 
Data Patterns is one of the few vertically integrated defence and aerospace electronics solutions providers catering to the indigenously developed defence products industry. It has proven in-house design and development capabilities, with experience of over three decades in the defence and aerospace electronics space. Data Patterns offers the entire spectrum of defence and aerospace platforms – space, air, land and sea. The company offers a wide range of products, including COTS modules, avionics displays, and communications ATES and satellites, fire control and other electronic systems for BrahMos and electronic warfare surveillance systems and radars. As of Sept’21, it has 818 employees with more than 500 qualified engineers, including 416 members in the design & engineering department. Its manufacturing facility consists of a 100,000 sqft factory built on 5.75 acres of land in Chennai, which has facilities for design, manufacturing, qualification and life cycle support of high-reliability electronic systems used in defence and aerospace applications. The order book as of Sept’21 stood at Rs5.8bn, with orders from several marquee customers in the Indian defence ecosystem, including the Indian defence ministry, BrahMos, DRDO, the Indian Space Research Organisation, HAL, BEL and a DPSU involved in the missile space. Data Patterns continues to invest in the development of various platform-specific products that have an annuity requirement, thus ensuring continuity of business in the coming years. It has received an annuity order for Rs120mn for the design and supply of cockpit displays for the Light Utility Helicopter (LUH), which has significant potential to generate additional annuity revenues from the new units required for the larger number of LUHs planned by HAL. Data Patterns has started to focus on civilian requirements like nano-satellites, wind profile radar and also plans to expand its export business, which is 10-12% of the core business currently.
 
Financials in Brief
 
During FY19-21, its revenue and PAT clocked 31% and 169% CAGR respectively, while average RoE and RoCE stood at ~15% and ~18%, respectively. During FY18-21, its order book clocked 41% CAGR to Rs4.9bn in FY21, which further expanded to Rs5.8bn in 1HFY22. The company enjoys a higher gross margin and EBITDA margin of 68.6% and 41.1% respectively, which are the highest among the key defence and aerospace companies. The order book as of Sept’21 stood at Rs5.8bn (3x FY22 annualized revenue), of which 67% share comes from production, 22% from development and balance 11% from services.             
 
My View: SUBSCRIBE
 
On FY22 annualized financials, the IPO is attractively valued at 40.7x EV/EBITDA, 16x EV/sales and 65.4x P/E vs. Paras Defence’s 68.9x EV/Sales and 19.7x EV/Sales and 157x P/E. The total addressable market is expected to grow from $1.97bn in CY20 to $6.65bn in FY30E, with a CAGR of 9%. The opportunities in the Indian defence sector is seen strong at $65bn in FY22. The company is looking to expand its product portfolio and focus on repeat large-volume production orders. Furthermore, it expects to augment design and development capabilities and increase its revenues by leveraging core competencies and growing its services and exports business. Data Patterns has a healthy order book of Rs5.8bn (3x FY22 annualized sales), providing revenue visibility over the medium term. Because of the strong financials, the healthy order book of 3x, strong track record of delivery, unmatched competency model & technology and attractive valuation, we recommend SUBSCRIBE to the issue with a long-term perspective.
 
Source: Research done on various financial websites and written here.

A lot of investors panic when the markets fall and start selling their stock holdings – this leads to even more drastic fall. This is what happened on Friday, 26-Nov-21. When the markets falls do not worry – not a single company fundamentals changed in the last 24 hours – it takes time. So why take your investments out when only one bad news of a new variant of COVID was found, that too in Africa.

See the NSE fall in 26-Nov-21:

NSE on 26-Nov-21

Very soon the clever investors will start investing and markets will rebound. They look a fall as an opportunity to buy not sell. But these kinds of investors are less. Panic investors never make money – it’s the clever investors who wait for an opportunity and get in and make money.

If you are also a long term investor do not to take a stop loss and unnecessarily take a loss when external news has hit which has nothing to do with the markets. Take a loss in an investment only when the company fundamentals has deteriorated. Otherwise, be invested and keep patience – in the long term eventually you will profit.

Before reading you should know that in India Government is planning to move a bill to ban all private cryptocurrencies. So be careful before investing in any crypto currency, if banned you may not be able to sell the cryptocurrencies that you bought..

For the last few years, BITCOIN And Crypto Currency Trading is making a lot of news. Investors especially in the western countries, and now in India too have shown a lot of Interest in BITCOIN And Crypto Currency Trading.

What is BITCOIN?

Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middlemen – meaning, no banks! There are no transaction fees and no need to give your real name. Some merchants in a few countries especially the USA are beginning to accept them. You can buy Webhosting services, pizza or even manicures using BITCOINS.

Why Bitcoins?

Bitcoins can be used to buy merchandise anonymously. In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping that they’ll go up in value. Plus Bitcoins have shown strong growth in the last few years. Merchants accept them at the current rate hoping to cash the benefits years later, though there is risk involved.

Acquiring Bitcoins

Buy on an Exchange: Several marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different currencies. Here is a list of the top crypto currency exchanges.

Can You Trade BITCOIN in India?

Yes, you can. There are brokers who allow you to trade BITCOIN and Crypto Currency in India but it’s not recommended to trade because the Indian Government is planning to move a bill to ban all private cryptocurrencies. So be careful before investing in any crypto currency, if banned you may not be able to sell the cryptocurrencies that you bought..

Update on 08-Feb-2022:

The Reserve Bank of India (RBI) will introduce the Central Bank Digital Currency (CBDC) as India’s official digital rupee in 2022-23, finance minister Nirmala Sitharaman announced in the Union Budget for 2022-23. The announcement comes after months of speculations around the introduction of a blockchain-based official digital currency of India.

Source:
https://www.livemint.com/budget/news/budget-rbi-to-launch-central-bank-digital-currency-in-fy23-11643699585723.html

Though I personally am against this decision as I see value investing in financially strong companies, and low risk hedged options and futures trading as the best and low-risk ways to make money from the stock markets, there is nothing I can do except teaching readers of my website not to trade this high-risk investment.

You can, of course, buy cryptocurrencies for the long term, just like an investment in stocks, but my suggestion is not to trade on that.

There are many other reasons not to invest or trade in BITCOIN and CryptoCurrency. Here are they:

Reason 1 not to trade BITCOIN:

Look at BITCOIN price in Rupees as of 15-Nov-2017 time 12.25 pm India Time:

BITCOIN to INR

In other words, 1 BITCOIN equals ₹ 4 lakh, 49 thousand, 334.96 as of on 15-Nov-2017 time 12.25 pm India Time. Will you risk that much money to buy just 1 BITCOIN? At least I will NEVER.

BITCOIN price in USD as of 15-Nov-2017 time 12.25 pm India Time:

BITCOIN to USD

After 4 years BITCOIN prices:

Look at ONE BITCOIN price in Rupees as of 24-Nov-2021, time 1.54 pm India Time:

In other words, 1 BITCOIN equals ₹42,11,152.68. Or ₹42 lakh, 11 thousand, 152.68. Will you risk that much money to buy just 1 BITCOIN? At least I will NEVER.

BITCOIN price in USD as of 24-Nov-2021 time 2.04 pm India Time is USD $56,756.80:

Agreed in 4 years ₹ 4 lakh, 49 thousand, 334.96 becomes ₹ 42 lakh, 11 thousand, 152.68. This is an ROI (Return on Investment) of 837.19%. This is huge but I bet you will not find a single person on earth who bought BITCOIN in 2017 and held it until 2021.

Update on 08-Feb-2022:
Price of BITCOIN in INR on 08-Feb-2022 is ₹ 32,37,859.08:

Bitcoin price in INR as on 08-Feb-2022

42,11,152.68 – 32,37,859.08 = ₹ 9,73,293.60. That is over Nine Lakh drop in just 3 months. WHAT A DROP in just THREE MONTHS!!! And this in just One BITCOIN.

Reason 2 not to trade BITCOIN:

On 15-Nov-2017, this is what I see in most BITCOIN trading websites:

₹ 4,86,800.00 BUY
₹ 4,84,000.00 SELL

If you buy and decide to sell straight away you are set to lose ₹ 2800 + brokerage (though brokerage is low and there is no tax as BITCOIN is not controlled by governments).

Reason 3 not to trade BITCOIN:

Most people do not understand BITCOIN, so it is better not to invest in a business that you do not understand. Moreover, governments all over the world are against it. Read this:

Governments will eventually defeat cryptocurrencies.

Big Governments Are Crushing Cryptocurrencies

So you don’t know what LAW will KILL BITCOIN & Crypto Currency Trading. The day governments kill it all your investments become ZERO on BITCOIN or CryptoCurrency.

Reason 4 not to trade BITCOIN:

Another point: Let us say someone invested $7000 in BITCOIN and made $14000 in 3 months.

In percentage terms that is 100% return in 3 months but in real-world that’s just $7000 made with too much risk. BITCOIN can go up and down 10% in one day. 🙁 Read this:

Bitcoin is too volatile:

https://www.investopedia.com/articles/investing/052014/why-bitcoins-value-so-volatile.asp

In June 2011 BITCOIN crashed 99%:

https://finance.yahoo.com/news/7-biggest-bitcoin-crashes-history-180038282.html

Here is more – 1 trillion loss of BITCOIN traders in a single day:

https://www.business-standard.com/article/markets/global-crypto-market-suffers-1-trillion-loss-as-bitcoin-crashes-122012200521_1.html

I will never invest in anything that can crash as much as 99% in a day at such a high price.

CONCLUSION:

BITCOIN or any other speculative product is great only if I invest 15000 and make at least a quarter/half a million in 10-15 years – something that can change your life. These only good stocks can do LEGALLY – BITCOIN & Crypto Currency Trading cannot. BITCOIN is rising because people are investing in this shining object like 10k to 15k – this bubble will burst once Govt takes action (Indian government has already started taking action), or people know the reality what I told you – 7k becoming 14k that’s all – and people lose interest because this will NOT happen always – there is a risk of the huge decline.

Greed is the biggest killer of money – BITCOIN And Crypto Currency Trading is one of them.

When you have better options to make monthly income peacefully why should you invest in such a risky trade?

Disclaimer: I do not trade Crypto Currency as I find them to be too risky to trade. The post above is my personal view and may differ from yours. If you do trade Crypto Currency please let me know in the below comment section your experience.

This post was written on: Thursday, November 4, 2021

Diwali Muhurat Trading is a 50-year-old tradition for Equities, Equity F&O, Currency F&O, and Commodities market. Today – Thursday, November 4, 2021, is Diwali 2021. Today the Diwali Muhurat Trading is set to be held between 6:15 PM to 7:15 PM.

From 5:45 PM to 6 PM there will be a Block Deal Session. A Block Deal Session is a single transaction, of a minimum quantity of five lakh shares or a minimum value of Rs 5 crore, between two parties which are mostly institutional players. The transaction happens through a separate trading window.

The Pre-Open Session will be held between 6 PM and 6:08 PM. A pre-open session is held before the actual market opening. It helps to stabilise volatility and unusual movement in the market due to major announcements. NSE pre-open market is the same as BSE. Please note that a pre-open session is held every day if the market will open for trading.

As in Nov 2021, the Indian stock market trading hours start at 9:15 AM and end at 3:30 PM. However, the Indian markets open between 9:00 a.m. and 9:15 a.m. for a pre-open market session. Pre-open market sessions had begun in India in 2010.

What you should do during Diwali Muhurat Trading?

1. Do not trade derivatives as 1 hour is a very small time to decide and take a trade. Plus liquidity will be low.

2. Buy shares for the long term – this you should do in every Diwali. If you need help reply back. Click Here to Open a Low Cost Brokerage Account where Stock Buying & Selling is FREE!!!

3. Make an excel file to write down your trades and to maintain a profit and loss register.

Wishing You & Your Family a Very HAPPY DIWALI 2021!!!