Monday, September 28, 2015

10 Tips For The Successful Long-Term Investor

Courtesy : Investopedia

While it may be true that in the stock market there is no rule without an exception, there are some principles that are tough to dispute. Let's review 10 general principles to help investors get a better grasp of how to approach the market from a long-term view. Every point embodies some fundamental concept every investor should know.

1. Sell the losers and let the winners ride!
 
Time and time again, investors take profits by selling their appreciated investments, but they hold onto stocks that have declined in the hope of a rebound. If an investor doesn't know when it's time to let go of hopeless stocks, he or she can, in the worst-case scenario, see the stock sink to the point where it is almost worthless. Of course, the idea of holding onto high-quality investments while selling the poor ones is great in theory, but hard to put into practice. The following information might help:


  • Riding a Winner - Peter Lynch was famous for talking about "tenbaggers", or investments that increased tenfold in value. The theory is that much of his overall success was due to a small number of stocks in his portfolio that returned big. If you have a personal policy to sell after a stock has increased by a certain multiple - say three, for instance - you may never fully ride out a winner. No one in the history of investing with a "sell-after-I-have-tripled-my-money" mentality has ever had a tenbagger. Don't underestimate a stock that is performing well by sticking to some rigid personal rule - if you don't have a good understanding of the potential of your investments, your personal rules may end up being arbitrary and too limiting. 
  •  
  • Selling a Loser - There is no guarantee that a stock will bounce back after a protracted decline. While it's important not to underestimate good stocks, it's equally important to be realistic about investments that are performing badly. Recognizing your losers is hard because it's also an acknowledgment of your mistake. But it's important to be honest when you realize that a stock is not performing as well as you expected it to. Don't be afraid to swallow your pride and move on before your losses become even greater.
In both cases, the point is to judge companies on their merits according to your research. In each situation, you still have to decide whether a price justifies future potential. Just remember not to let your fears limit your returns or inflate your losses.
2. Don't chase a "hot tip".
 
Whether the tip comes from your brother, your cousin, your neighbor or even your broker, you shouldn't accept it as law. When you make an investment, it's important you know the reasons for doing so; do your own research and analysis of any company before you even consider investing your hard-earned money. Relying on a tidbit of information from someone else is not only an attempt at taking the easy way out, it's also a type of gambling. Sure, with some luck, tips sometimes pan out. But they will never make you an informed investor, which is what you need to be to be successful in the long run.


3. Don't sweat the small stuff.
As a long-term investor, you shouldn't panic when your investments experience short-term movements. When tracking the activities of your investments, you should look at the big picture. Remember to be confident in the quality of your investments rather than nervous about the inevitable volatility of the short term. Also, don't overemphasize the few cents difference you might save from using a limit versus market order.

Granted, active traders will use these day-to-day and even minute-to-minute fluctuations as a way to make gains. But the gains of a long-term investor come from a completely different market movement - the one that occurs over many years - so keep your focus on developing your overall investment philosophy by educating yourself

4. Don't overemphasize the P/E ratio.
Investors often place too much importance on the price-earnings ratio (P/E ratio). Because it is one key tool among many, using only this ratio to make buy or sell decisions is dangerous and ill-advised. The P/E ratio must be interpreted within a context, and it should be used in conjunction with other analytical processes. So, a low P/E ratio doesn't necessarily mean a security is undervalued, nor does a high P/E ratio necessarily mean a company is overvalued.
5. Resist the lure of penny stocks.
 
A common misconception is that there is less to lose in buying a low-priced stock. But whether you buy a $5 stock that plunges to $0 or a $75 stock that does the same, either way you've lost 100% of your initial investment. A lousy $5 company has just as much downside risk as a lousy $75 company. In fact, a penny stock is probably riskier than a company with a higher share price, which would have more regulations placed on it. 


6. Pick a strategy and stick with it.
 
Different people use different methods to pick stocks and fulfill investing goals. There are many ways to be successful and no one strategy is inherently better than any other. However, once you find your style, stick with it. An investor who flounders between different stock-picking strategies will probably experience the worst, rather than the best, of each. Constantly switching strategies effectively makes you a market timer, and this is definitely territory most investors should avoid. Take Warren Buffett's actions during the dotcom boom of the late '90s as an example. Buffett's value-oriented strategy had worked for him for decades, and - despite criticism from the media - it prevented him from getting sucked into tech startups that had no earnings and eventually crashed


7. Focus on the future.
 
The tough part about investing is that we are trying to make informed decisions based on things that have yet to happen. It's important to keep in mind that even though we use past data as an indication of things to come, it's what happens in the future that matters most.

A quote from Peter Lynch's book "One Up on Wall Street" (1990) about his experience with Subaru demonstrates this: "If I'd bothered to ask myself, 'How can this stock go any higher?' I would have never bought Subaru after it already went up twenty fold. But I checked the fundamentals, realized that Subaru was still cheap, bought the stock, and made seven fold after that." The point is to base a decision on future potential rather than on what has already happened in the past. 

8. Adopt a long-term perspective.
 
Large short-term profits can often entice those who are new to the market. But adopting a long-term horizon and dismissing the "get in, get out and make a killing" mentality is a must for any investor. This doesn't mean that it's impossible to make money by actively trading in the short term. But, as we already mentioned, investing and trading are very different ways of making gains from the market. Trading involves very different risks that buy-and-hold investors don't experience. As such, active trading requires certain specialized skills.

Neither investing style is necessarily better than the other - both have their pros and cons. But active trading can be wrong for someone without the appropriate time, financial resources, education and desire. 

9. Be open-minded.
 
Many great companies are household names, but many good investments are not household names. Thousands of smaller companies have the potential to turn into the large blue chips of tomorrow. In fact, historically, small-caps have had greater returns than large-caps; over the decades from 1926-2001, small-cap stocks in the U.S. returned an average of 12.27% while the Standard & Poor's 500 Index (S&P 500) returned 10.53%.

This is not to suggest that you should devote your entire portfolio to small-cap stocks. Rather, understand that there are many great companies beyond those in the Dow Jones Industrial Average (DJIA), and that by neglecting all these lesser-known companies, you could also be neglecting some of the biggest gains.

10. Be concerned about taxes, but don't worry.
 
Putting taxes above all else is a dangerous strategy, as it can often cause investors to make poor, misguided decisions. Yes, tax implications are important, but they are a secondary concern. The primary goals in investing are to grow and secure your money. You should always attempt to minimize the amount of tax you pay and maximize your after-tax return, but the situations are rare where you'll want to put tax considerations above all else when making an investment decision 



Conclusion 
 
There are exceptions to every rule, but we hope that these solid tips for long-term investors and the common-sense principles we've discussed benefit you overall and provide some insight into how you should think about investing.




Wednesday, September 23, 2015

SKM EGG PRODUCTS - AGM UPDATES



The twentieth AGM of company held today in Erode at 4.15 PM. About 70 shared holders participated in the event .

Key takeaways 

·        Management is optimistic about the present business environment and confident about the bright future of the company.

·        Company is planning to increase its production capacity from 7000 tons to 10000 tons
 using internal accruals.

·        Management discussed various  ways to expand capacity and reached some viable options  for the same . The final decision will be declared in near future once it get board approval.

·        Company expecting Rs.300 Cr turnover and better margin  in this FY  and  confident to reach Rs.500 Cr top line in two years.

·        At present major markets are Japan and EU Countries and company getting lot of enquiries from new markets like Russia,South Africa, Middle East ..etc 

·        Company completed almost all formalities for BSE listing and one certificate from its banker( SBI) is pending which is expected to receive in another 2-3 months .



Saturday, September 19, 2015

For First Time Investors ....



 Courtesy: Economic Times
If you wish to invest in the stock markets and know nothing about them, one convenient way is to opt for mutual funds. If you are keen on investing directly, then do allocate the necessary time, energy and resources.

Show commitment

First, spend time on understanding a company's fundamentals: sales, net profit, margins, etc.

Also study  market movements , because sentiments play a major part in driving stock prices. Sentiments in turn are driven by expectations of what will happen in the future.

Have a long-term horizon

Like a company shareholder, give your investments time to grow. Enter the markets with realistic return expectations, and not outrageous ones. Remember that time is the best antidote to risk: the longer your investment horizon, the lower the volatility of returns ..
Keep emotions in check

Do not turn euphoric when the markets surge, nor become despondent when they plumb new lows. Even if you develop a well-researched, diversified portfolio and hold it for the long term, inevitably some of your stock holdings will turn out to be duds. When that happens, respond based on your training and intellect, rather emotionally.

Be prepared to interpret data

While institutional investors have access to expensive databases, you will have to depend on publicly-available information. Quarterly results, annual reports, and shareholding pattern are available on NSE and BSE's web sites. Scout for more information in the media, and on Google Finance and Yahoo Finance. Technical market data like share prices and volumes is available on company web sites, and old research reports on brokerage houses' s ..

Analyse, then buy

Analyse the company with the same level of rigour as you would if you were the owner. Initially stick to sectors that you know best. Doctors, for instance, should invest in pharma companies first. Compare a company's ratios with the index and industry historical averages. Look for the following ratio-based characteristics in a stock you are keen on: low PE, low PB, high dividend yield, low debt to equity ratio, and high RoCE and high RoNW.
With the markets split between good but overvalued stocks and poor but undervalued ones, here are a few ratios you should look up before you buy.

1. PRICE TO EARNINGS RATIO

The most commonly used ratio, it compares the price of a stock to the company's earning per share (EPS). The EPS can be either for the past four quarters (historical or trailing PE) or for the coming four quarters (forward PE).


2. PRICE TO BOOK VALUE RATIO

This ratio compares the price of a stock with its book value. The book value is the net value of the company's total assets minus its liabilities. In other words, it is what shareholders will be left with if the company goes bankrupt.

3. PRICE TO SALES RATIO

This ratio compares the price of a stock to the revenue earned per share. The revenue for the past four quarters is used in this calculation.
4. DEBT-TO-EQUITY RATIO

It measures a company's leverage by comparing its debt with its equity base. The ratio indicates the proportion of the company's assets that are being financed through debt.
5. ASSET TURNOVER RATIO

The ratio measures the sales generated for every rupee worth of assets. It shows a firm's efficiency in using its assets to generate revenue.
BUY,MONITOR,SELL

Since monitoring many stocks becomes difficult, stick to 15 or 20 or a number comfortable to you . If derived from diverse sectors, that many stocks offer adequate diversification. Monitor your stocks' fundamentals and valuations at least once every quarter. Sell only to meet a financial obligation, to re balance, when fundamentals deteriorate, or when the stock becomes overvalued. Also, sell if you can replace one with a better option. Adhere to these basics and you could well surprise yourself with your performance.

Sunday, September 13, 2015

FEW POINTS FOR BEGINNERS



Courtesy : Taxguru .in

Stock Market Investment is a good method of making money only When you do it with much care and attention. Most people think that stock market is good place to make money. If so all stock traders and stock market investors must become multi millionaires and billionaires. But the reality is not that. When you try to invest in stock market, learn the market and the stock well and starts only after collecting all information and necessary analysis.

You must be aware that nobody can become rich through stock market within a short time. When you enter into stock market you should know this fact and go ahead only with the real facts. You should not trust the advertisements and rumors. Learn everything well and go ahead with confidence.
Invest in a particular stock or in a particular sector only after doing careful market study and independent analysis of the stock you wish to buy. You must not believe others, even if it is the top most investment guru Warren Buffet, without proper self study.

Give much attention to stock investment and watch the market carefully. You never think that you can be a good investor  by doing stock trade just like a part- time work or as a hobby. You can do stock trade as part time work or as hobby, but the net result will be a heavy loss.Do not follow blindly the activities of the other traders, friends or large scale investors. If you follow others the net result will be a loss. You may watch chess while others playing. There may be many ideas in your mind when others playing. But that might not be the idea of the player. Just like in stock trading/investing  you could not watch and follow others.

When you invest in stock market, it must not be for a short period. If you do so no doubt you would be a looser in stock market. Stock market investing  is just like planting trees. You could not harvest in a short while. Wait enough time to get a good harvest.When you invest in stocks of a particular company, study all the activities of the company including their business, management, financial status, popularity, goodwill etc. You must know that if you invest in shares of strong companies no doubt you can yield a good profit, if you are ready to wait for enough time.

Do not be panic while selling or buying shares. The market trend be tempting you to sell or buy shares in a particular time. Whenever you sell or buy stock, do it only after a good market study and analysis. This is not a gambling. This is a real scientific trade which has its own principles and methods. So don’t be panic or greedy.

Never enter in stock market with borrowed money. If you take a loan or borrow money from any friends or relatives, to invest in stock market, you could not refund it in right time. The stock market is volatile and one could not foresee the real position of stock market after a stipulated time.Never invest in stock market with the money you are earmarked for a specified purpose. You could not realize the money when you are urgently needs the money, unless you are not ready to bear a heavy loss. The money you invest in stock market could not easily realize with profit while you hardly need the money.

Do not follow rumors, analyst report, hot stock tips or recommendations of the stock broker. Their strategy or ideas may not help you to get a good profit. They are making such recommendations as a common strategy which may not be suitable for you. All ready made dresses are not suitable for all. You also have a dress in your own measurements. So do not follow blindly such common evaluations.
Diversify your portfolio in a balanced way. Do not over diversify or under diversify. Do it an optimum way of diversification. Only experience can help you here. You can be a good stock trader in a certain period of time with hard work and quality market study. Always remember that Rome is not built in a day.

If you follow all the above mentioned points , you can be a profitable stock investor  and can make money from stock market investment in rainy days or sunny days, in bullish trend or in bearish trend.

Stock Market Investment is a good method of making money only When you do it with much care and attention. Most people think that stock market is good place to make money. If so all stock traders and stock market investors must become multi millionaires and billionaires. But the reality is not that. When you try to invest in stock market, learn the market and the stock well and starts only after collecting all information and necessary analysis.
You must be aware that nobody can become rich through stock market within a short time. When you enter into stock market you should know this fact and go ahead only with the real facts. You should not trust the advertisements and rumors. Learn everything well and go ahead with confidence.
Invest in a particular stock or in a particular sector only after doing careful market study and independent analysis of the stock you wish to buy. You must not believe others, even if it is the top most investment guru Warren Buffet, without proper self study.
Give much attention to stock investment and watch the market carefully. You never think that you can be a good trader by doing stock trade just like a part- time work or as a hobby. You can do stock trade as part time work or as hobby, but the net result will be a heavy loss.
Do not follow blindly the activities of the other traders, friends or large scale investors. If you follow others the net result will be a loss. You may watch chess while others playing. There may be many ideas in your mind when others playing. But that might not be the idea of the player. Just like in stock trading you could not watch and follow others.
When you invest in stock market, it must not be for a short period. If you do so no doubt you would be a looser in stock market. Stock market trading is just like planting trees. You could not harvest in a short while. Wait enough time to get a good harvest.
When you invest in stocks of a particular company, study all the activities of the company including their business, management, financial status, popularity, goodwill etc. You must know that if you invest in shares of strong companies no doubt you can yield a good profit, if you are ready to wait for enough time.
Do not be panic while selling or buying shares. The market trend be tempting you to sell or buy shares in a particular time. Whenever you sell or buy stock, do it only after a good market study and analysis. This is not a gambling. This is a real scientific trade which has its own principles and methods. So don’t be panic or greedy.
Never enter in stock market with borrowed money. If you take a loan or borrow money from any friends or relatives, to invest in stock market, you could not refund it in right time. The stock market is volatile and one could not foresee the real position of stock market after a stipulated time.
Never invest in stock market with the money you are earmarked for a specified purpose. You could not realize the money when you are urgently needs the money, unless you are not ready to bear a heavy loss. The money you invest in stock market could not easily realize with profit while you hardly need the money.
Do not follow rumors, analyst report, hot stock tips or recommendations of the stock broker. Their strategy or ideas may not help you to get a good profit. They are making such recommendations as a common strategy which may not be suitable for you. All readymade dresses are not suitable for all. You also have a dress in your own measurements. So do not follow blindly such common evaluations.
Diversify your portfolio in a balanced way. Do not over diversify or under diversify. Do it an optimum way of diversification. Only experience can help you here. You can be a good stock trader in a certain period of time with hard work and quality market study. Always remember that Rome is not built in a day.
If you follow all the above mentioned tips, you can be a profitable stock trader and can make money from stock market investment in rainy days or sunny days, in bullish trend or in bearish trend
- See more at: http://taxguru.in/finance/stock-market-investment-tips-beginners.html#sthash.ZLB1HN2l.dpuf

Saturday, September 12, 2015

DIC INDIA - CHANCE FOR TURNAROUND


                                        CLICK ON THE IMAGE FOR A BETTER VIEW



Link to Company Website HERE

Discl: Holding shares of  the company

Thursday, September 3, 2015

CAPLIN POINT LABORATORIES LTD. - BUSINESS UPDATE

CAPLIN POINT LABORATORIES - today informed BSE that its Sterile Injectable  facility received the approval of  Brazil National Health Surveillance Agency ( ANVISA ) . This will help the company to tap growing Brazilian market .This stock suggested @ Rs.86 ( Link HERE)   touched  its life time high today @ Rs.1639 .

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