A BOOK ON INDIAN STOCK MARKET LEARNING BY PRASENJIT PAUL
Just 2 percent of Indians are investing in the stock market. Approximately 45 percent, Americans are investing in the stock market. Basic reasons for neglecting the stock market may be:
Lack of Knowledge of Financial system.
Unwillingness to take risks in new sectors.
Unaware of Power of Compounding
More trust in Traditional ways of Investment such as FD, Recurring deposits, Postal savings, LIC, etc.
Compound interest is the eighth wonder of the world- “ who understands it, earns it … who don’t understand it, pays it… Compound interest is the most powerful force in the universe. Compound interest is the greatest mathematical discovery of all time. – Albert Einstein.
Here I am trying to explain a book on Stock Market in brief. Its author is from non-commerce background & Indian. He is Engineer by profession. So his wring is very smooth to read & understand. If you want to break the conventional financial system for saving then read this book. It contains the following chapters.
How to avoid loss in the stock market:-
For stopping loss in the Share Market, first, learn basic techniques than invest. Investing in good stocks for the long term is key to generate money in the stock market. Such type of investment can give you 22% of the annual return.
Stock Market is NOT risky at all :-
Our Stock Market & Brokerage houses are is regulated by The Securities and Exchange Board of India (SEBI – An Authority of Govt of India). So they are safe as your investment in Gold or Land. Stocks are more liquid money compare to any other. You can get money in just 72 hours after selling stocks.
The first step of picking winning stocks:-
In this chapter, various types of ratios such as ROE, Debt Ratio, etc have been explained. Other concepts like competitive advantage, Economic moat, etc have been described.
How to evaluate management:-
In this chapter, the Company’s management evaluation techniques such as promoter holding, Dividend history, types of institutional investor FII & DII, Company Business model, etc have been explained in detail.
Valuation – It matters much-
Price to Earnings Ratio, Price to Sales Ratio, Price to Book Ratio, etc explained with other concepts explained with practical examples.
When to buy and when to sell:-
Buy or Sell of stocks is the main activity in the share bazaar. But the appropriate time frame is the most important concept. It has illustrated here.
Do’s and don’ts to avoid loss in the stock market:-
Early Profit Booking & Premature exit is the main reason for the loss in the stock market. It is very crucial knowledge.
How to construct your portfolio:-
Investment of your entire money in various sectors protects you from the loss of your investment. So there is a need for accuracy to create your portfolio.
Is it required to follow an equity advisor:-
A mutual fund is managed by Fund Managers. They choose stocks of low risk for stopping any loss. But if you directly invest in the share market, you are free to invest in any type of stock as per your knowledge.
The quick formula for picking winning stocks:-
It is the conclusion of the whole book. After learning the above-mentioned chapters, you can revise them here.
I have mentioned links for basic rules for investment in Share Bazar. FASTEST METHOD TO CHOOSE STOCKS OF NSE & BSE REGISTERED COMPANIES
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