Stock Market Expert

Need help?? Your guide on Gratuity

noreply@blogger.com (Pratik Modi) — Sun, 25 Sep 2011 16:56:00 +0530

Success for the article on PF withdrawal has inspired me to write an article about Gratuity. And obviously this is really important to know as many companies provide this benefit under the umbrella of CTC, but the employee is not aware of, how to get benefit of gratuity.

This article is an attempt to provide insight about Gratuity to those individuals.

“Gratuity” is a reward for the long term service. It’s the benefit that employee gets for sustained loyalty towards the organization and employer.

Eligibility for an Employee:
An “Employee” who has rendered continuous service for more than five years is eligible for “Gratuity” benefit.

Benefit:
Gratuity rewards an employee in a big way. The amount of gratuity will be 15 days pay for every completed year of service. Yes it’s completed years which counts here. So if the person is leaving the company after 6 years and 7 months then he’ll get gratuity for 7 Years and the employee leaving company after 6 years ad 5 months would receive gratuity for 6 years. So keep this thing in mind and then put down your resignation at appropriate time.

The amount is calculated on the Basic Salary + DA , the employee is drawing at the time of exit.

Below is the simple calculation to gauge the amount that you should receive as gratuity.

How to find multibagger ideas in Stock Market?

noreply@blogger.com (Pratik Modi) — Sat, 10 Sep 2011 19:38:00 +0530

The recent downfall in the stock market has created opportunity for the investors to start looking into Equity. Often people come up with the question on how to find the multibagger stock which would create wealth for them?

Today I’ll provide tips and tricks of finding hidden gems from the stock market.

Business you understand:

Ask yourself one question, if you would have got enough money, time, and skills to start on the business which business you would have picked to become next Narayan Murthy?

Identify all such businesses which you understands, which you would like to do or would have done, if given a chance. This is really important, because it’s about achieving your dreams.

Companies in your business:

Once you identify these businesses that you want to start with, identify companies having presence in the same sector/business. Make a list of such companies based on their size. i.e. largecaps, midcaps, smallcaps. Now start comparing these companies based on different parameters like,

- Management:

o Check management skills by reviewing their interviews, their confidence in the company, how they started the company?, Ownership in the company. Do they love their business?

- Last 3-5 years results :

o Check past performance of all these companies. (EBITA , Profit)

- Corporate Governance:

o Try to figure out the strength of the company by checking obligations made against it. It at all that is true then how they are dealing with it?

- Future growth, Scalability :

o Make sure that the management is right on track with expansions and they have vision to take the company to the next level.

You can add your own parameters as well, which you would try to meet for your own business. Once you find answer for all these parameter you’ll get true hidden gems for your self.

Own a stock or business:

I know it’s not possible for everyone to start business not that they don’t have skills but there are constraints like, personal commitment, finance, family, good job, risk and many other things. But, Is it stopping you from executing your idea? I don’t think so. Now with this exercise you’ve ignited the energy to live your dream. Now you’ve found the same company/business which you would have established, if given the opportunity. More over, these companies have decent experience, growth prospects and management who are equally passionate about the business as you are. In other word, it’s basically you own part of the company, doing the same business and still not sacrificing on your current commitments.

Sounds like excellent deal? Yes it is.

It makes sense to mention here, “Warren Buffet owns stake in many companies/business. He is having CEO and MD of different company reporting to him. But guess what, He is still able to sleep in the afternoon? “Yes that’s correct.

Hope this would help all the readers in finding their own hidden gems !!

Please click here to become expert in riding investor behavior in stock market.

Happy Investing !!

Learn investor behavior - How to ride stock market sentiment?

noreply@blogger.com (Pratik Modi) — Sun, 14 Aug 2011 15:40:00 +0530

As there's lot of pessimism prevailing in the stock market, I’m forced to right this article which will guide and help retail investors in selecting best investment course for themselves.

No matter how expert are you? But you tend to take emotional decisions to pick right investment for your self and today’s article would help in understanding investor behaviour in stock market.

Investor Behavior

As depicted in the above fig. , it’s the “Optimism” which drives every investment that you do. Be it stock market, reality, fixed deposit, ULIP, it’s your optimism which leads you to invest in any of the financial instruments.

Once your decision pays off and becomes reality then excitement, thrill and euphoria takes over and drives the investor sentiment. At that point of time investor shows overconfidence due to the success he has made using his investment decision, stock market is at it’s pick and making quick money for the investors. He starts believing every research report, news that he understand and starts taking larger investment exposure. This situation is largely driven by the Euphoria in the market and it’s the “Point of Maximum Financial Risk” for the individual.

Once the rally is over, soaring market calms down and tries to level off that is to balance out the premium at which market was trading due to euphoria VS actual valuation based on earnings. This leads to Anxiety, Denial and Fear in the Investors which was totally bullish and riding through market sentiments. At that point of time investor feels that “I’m a long tem Investor”.

As the market continues to fall, the same investor starts feeling desperation, panic, capitulation, despondency. This is time when investor feels that, “This is not for me.” He tries to sell his holding in the stock market even at enormous loss as he has suffered huge erosion of the wealth. Investors become depressed about the stock market and there’s lot of negative news floating around which keeps them away from the stock market. But dear investor, this is the “Point of Maximum Financial Opportunity.”

When I look at the current situation, there’ fear prevailing in the stock market due to U.S. downgrade, U.K. nations hanging bankruptcy issue, U.S. double dip recession worries, inflation in emerging markets and local political issues in India. It has turned into panic selling globally but despondency and depression is yet to come. Does this mean it’s not the right time to buy? Well, no one can time the market, as we’re in bottom cycle of the stock market, I would advice to start accumulating stocks/businesses in your portfolio from the longer term point of view with the knowledge that it could go down more.

Hope this article would help lot of investor and guide through this turbulent time. You can also check my article on "Risk VS Stock Market" to understand are we at risk by not investing in the stock market?

Happy Investing!!

Larsen & Toubro Finance Holding IPO - Should you subscribe?

noreply@blogger.com (Pratik Modi) — Sun, 24 Jul 2011 14:28:00 +0530

L&T Finance Holdings - As the name suggest, it’s a financial holding company promoted by Larsen & Toubro Ltd.

Business:

It offers variety of financial products and services for the corporate, retail and infrastructure finance sectors, mutual fund and investment management.

L&T Finance Holdings is registered with the RBI as a Systemically Important Non-Deposit Taking Non-Banking Financial Company and has applied for registration as a Core Investment Company.

Operations:

- The Infrastructure Finance Group,

- The Retail Finance Group,

- The Corporate Finance Group and

- The Investment Management Group.

Customer:

Company’s customer includes individual retail customers as well as large companies, banks, multinational companies and small- and medium-enterprises. LTF offers a spectrum of financial products and services for trade, industry and agriculture.The company's focus segments are corporate products, construction equipment, CVs and tractors.

Objects of the Issue:

1. Repayment of inter corporate deposit issued by Promoter to the Company;

2. To augment the capital base of L&T Finance and L&T Infra, to meet the capital adequacy requirements to support the future growth in their business;

3. To achieve the benefits of listing on the Stock Exchanges; and

4. General corporate purposes including meeting the expenses of the Issue.

Issue Detail:

Issue Open: Jul 27, 2011 - Jul 29, 2011

Issue Type: 100% Book Built Issue IPO

Issue Size: Equity Shares of Rs. 10

Issue Size: Rs. 1,245.00 Crore

Face Value: Rs. 10 Per Equity Share

Issue Price: Rs. 51 - Rs. 59 Per Equity Share

Grading:

CARE has assigned an IPO Grade 5 to L&T Finance IPO. This means as per CARE, company has 'Strong Fundamentals'. CARE assigns IPO grading on a scale of 5 to 1, with Grade 5 indicating strong fundamentals and Grade 1 indicating poor fundamentals.

Subscribe:

I recommend “subscribe” for the IPO with following reasons.

- L&T group has strong brand value and history of creating wealth for the investors.

- L&T group is planning to restructure and come up with different IPO’s of it’s non listed companies and L&T Finance Holdings amongst the first to hit the market would attract investors.

- The company is going to raise Rs. 161 crore via anchor investors in the IPO, which should be one day before the IPO opens for subscription. There is going to be great demand from the Anchor investors for the IPO and would cascade into the IPO by institutional investors.

- “Strong Fundamental” IPO with grade of 5 have done really good in past. Like, Coal

India

, MOIL. L&T Finance Holding is likely to repeat the same.

Happy Investing!!

Need help?? Your guide for PF Withdrawal

noreply@blogger.com (Pratik Modi) — Sat, 12 Feb 2011 13:08:00 +0530

I’m writing this article to help people with right information to get the PF Withdrawal status, amount and many more things. I know it’s not related to investment or stock market, but it is worth to put this important information on this forum as it’s about getting our own money.

Background:

I know many people who have opted to withdraw their PF amount during their job change. They did so may be because of need for some liquid money. But this withdrawal amount takes years to get credited into their bank account and there’s no clue where to get the status of the claim. This article may help all such individuals.

I would suggest Individuals to be proactive and taking steps forward to get this amount, rather than just wait for employer and PF department to work for you.

Tips and Tricks:

o Don’t forget to check with employer’s account department about your willingness for the PF withdrawal for PF transfer during your exit formalities from the organization. For now we’ll concentrate on the PF withdrawal.

o You’ll get PF withdrawal form – Form -19 and Pension withdrawal form – Form 10C from the employer. Please fill the latest and accurate information about your email id and phone number. Just be aware that PF department has come up with SMS facility where they’ll send you status of your claim through SMS. You need to mention your mobile number at the top of the withdrawal forms). For more information please visit http://www.epfindia.com/docs/SMSAdNew.pdf.

o Mention clear bank account details in the PF withdrawal form. Please provide a clear photocopy of your bank passbook or cancelled cheque of the account where you want your money to be credited.

o Make sure that the mobile number and the account which you’ve provided in the Form-19 are active till you get your claim.

o Employer would submit your claim/Form 19 to the PF department after 60 days from your last working day. Generally they do this in bulk when there’s some good amount of PF withdrawal form to be submitted to the PF department. So it would take 90-120 days for your claim to be submitted with PF department. It may vary if employer is using third party to manage all this activity. In that case it would take much longer time. Now here’s the time where you need to be proactive and follow-up with Finance/HR department of your previous employer and asking for submission at the earliest. Don’t forget to ask them to provide duly signed copy of the withdrawal form from PF department. Even scanned copy should be fine. This would vouch the exact date on which you claim has been submitted to the PF department.

o PF department has started online facility to know the claim status of your PF withdrawal. You need to select the office and mention the PF account number to know the status. http://www.epfindia.com/ClaimStatus_New.html. I would request you to wait for at least 15 days from the date your claim is submitted to the PF department and then check the status of your claim.

o In case you don’t find your claim status on the central portal then you can check your claim at the regional site. You can get sites about different regional PF offices from http://www.epfindia.com/RegSites.html

o Generally it takes 30-60 days for the PF department to process your claim. If you don’t find status of your claim on any of the portal then do submit your grievance at the portal. http://epfigms.gov.in/. This is really effective and I’ve personally resolved my claim using the portal. You’ll definitely get reply using this forum. Now with the awareness of this system many people are using this forum so you may need to send reminder for your grievance and you’ll definitely get the response.

o One you submit your grievance you’ll get the contact person details for your grievance along with email id and contact number. You may need to call and drop email to check the status of your grievance. Resolution to your grievance in turn will resolve your PF claim as well. You can check the status of your grievance on the same portal http://epfigms.gov.in/. You can get the additional contact numbers of PF department from your previous employer as well.

Things to Remember:

o You’ll be receiving two different amounts in your account. One is for your PF withdrawal and one is for Pension contribution. Make sure that you’ve received both of these.

o Now you need to compare these amounts with the contribution which you’ve made for your PF with previous employer. Ask for Form 3-A from your previous employer. It should have all the information about the contribution made towards the PF. You need to compare PF amount which you’ve received to the combined contribution which you and employer made toward PF. You need to compare pension amount with the 8.33% contribution which your previous employer made towards pension scheme. This should be clearly mentioned in form 3-A.

o You will get Form 23 (Annual PF Statement) from the RPFC which you can verify against the claim credited in your account. You would receive to the address which you’ve mentioned in your withdrawal form. In case you need scanned copy then you can use the same forum of grievance.

I believe this article would help lot of people and guide them through PF withdrawal.

Happy Investing and Wealth creation!!

Want to be Millionaire? Invest Today

noreply@blogger.com (Pratik Modi) — Mon, 31 Jan 2011 20:27:00 +0530

I've got larger response for my article on Systematic Investment Plan - where people seems to be really curious and interested in creating wealth using SIP.

Many people asked about right time of starting Investment through SIP and ideal amount for such SIP investments. This article may prove to be helpful for all those readers who are aspiring to create good amount of wealth using SIP.

Ideal Amount for SIP:

Ideally the amount could vary based on the risk appetite of individual and the portion of his monthly income he/she wants to invest in SIP. I guess investors should follow 80-20 rule, for such allocation. Let's understand this through an example. My friend Rahul is 23 years old. He's earning 30k per month. He doesn’t have many liabilities from the family and he's having HIGH risk appetite. He can save 15k from his monthly salary and want to invest maximum in the stock market related instruments.

I would advise him to invest 80% of his monthly saving (12k) into equity and equity oriented instruments. The rest 20% (3k) should get invested into less risky investment options like, PPF. Does this rule apply all the time? No. He should keep reviewing his responsibilities and liabilities and risk taking ability every 3 to 6 months and based on that he should modify his investment profile with 80-20, 75-25 or 70-30 investment rule.

Timing the SIP – Start Early:

I strongly believe that investment in SIP should start at the earliest because there’s definite reason behind this and let’s understand this with example.

Let's compare two friends: Mit and Jigar. Mit has started investment at pretty early stage. He started saving Rs750 per year from the time he was 15. After 15 years he has stopped this investment. So his total investment till date is Rs. 11250 over the tenure of 15 years.

On the other hand, Jigar starts investing Rs. 5,000 per year when he is 30 and will continue investing this amount every year till he is 60. So his total investment would be Rs. 300000 over the tenure of 30 years.

If both earn 15% return per annum then, who will create more wealth when they retire at the age of 60?

Answer is Mit. His annual saving of Rs. 750 between the age of 15 to 30 would aggregate to Rs 27.7 lacs when he’ll be 60, whereas Jigar’s Rs. 5000 annual savings between age of 30 to 60 would accumulate to Rs 25 Lacs when he’ll be 60.
Here, it’s essential to understand the power of compounding and it’s the single most reason for you to start investing immediately. Even small chunk of investment makes big difference over the period of time. You can see Mit and Jigar both would create enormous wealth, compared to their investment. But for Mit it took really less money and the time duration to build the wealth as he started at the early investment. This highlights the importance of starting early and right at your investment.
In a nutshell, “Your money never sleeps. It’s working for you 365*24*7, so start early at your investment.”

Happy Investing!!

Systematic Investment Plan - Tax saving, money making and more...

noreply@blogger.com (Pratik Modi) — Tue, 11 Jan 2011 12:43:00 +0530

This article is devoted to all the investors who want to take advantage of India growth story but refrain from doing this due to less knowledge about stock market or economy fundamentals.

I recommend them to go with Systematic Investment in ELSS or Equity focused Mutual Funds. Let me explain this in detail and why I’m so bullish on this kind of investment.

Systematic Investment Plan:

In a simple terminology, it’s about investing specific amount of money at regular intervals for continuous period of time. I hope most of the people know about RD – Recurring Deposit, where we deposit specific amount of money to the bank/post regularly for specific time duration. Here method of investment remains same, but only investment instrument changes. In SIP, investment goes to the equity via MF scheme. Here investor can choose MF scheme based on his own risk appetite.

Benefits:

SIP gives relief to the investors from the task of timing the stock markets. Believe me, it’s the most difficult task which even Investment Gurus are not able to do very well.
It makes investment as habit and not the gambling. SIP allows the investor to buy units on a given date every month/every week. The investor decides the amount and also the mutual fund scheme.
Investment amount remains same, but investor can definitely buy more units in declining market and less number of units when market is trading at high valuation.
Investor automatically participates in the market swings, so there’s no need to time the market.
SIP averages the risk through consistent investment at every level of market. We don’t need to bother, if market is down or up and still we get handsome returns. This is because now we have made investment as habit.
SIP can start with minimum investment of Rs. 500, so even small investor can participate in this investment instrument.
Fix amount of money automatically gets deducted through ECS, every month/week. This is best way of investment when you don’t have to control when to invest or not to invest. This would make a habit of keeping some corpus aside for the SIP, every Month.
SIP in Tax Saver MF Schemes: I believe this is the best way to invest through SIP. Investor gets many advantages.

1). Tax Saving: Investor gets immediate tax benefit in the respective tax bracket.

2). Investment Lock in – 3 Years: I believe investment horizon of more than 3 year enhances

3). Tax free income: All this ELSS scheme gives you tax free return.

4). Invest for 3 Year – “Forget your tax worries”: We all know when it comes to Feb, March then we’re always worried about the next pay check, which may be cut heavily due to tax liability. With the help of SIP investor just needs to invest for 3 years consistently and that’s it. At the end of third year, the same SIP amount which was invested at the beginning of SIP could be withdrawn (without any tax liability) and reinvested in the SIP again. This will manage and save your tax using the same SIP year after year once you invest for 3 consecutive years.

5). Minimum lock in Period: Tax Saver MF has the minimum lock in period, compared to other tax saving instruments. This means if you’re in 30% tax bracket, then ideally you’re making/saving 30% on the investment every 3 years. Just compare it to NSC where the lock in period is very high and at the same time you’re liable to pay tax on the gain from NSC.

I hope this article would encourage and help investors in creating wealth over the period of time using SIP.

Happy Investing !!

Stock Market Outlook & Investment Idea - 2011

noreply@blogger.com (Pratik Modi) — Fri, 24 Dec 2010 15:14:00 +0530

It's been really long time since I've given recommendation to the investors and readers of this blog.

There have been tones of ups and downs in the markets during last one year, but finally Nifty and Sensex are managing to hold and give good returns to the investors.

I have got many queries asking for the stock recommendation which could prove to be good investment idea at this point of time.

Indian stock market Outlook - 2011

First of all let me reiterate the fact that there’s immense potential in the Indian stock market to do well over the next 3-5 years. I believe Indian economy would be triple in the size over the course of next 10 years. You can imagine the amount of wealth could be created if you invest in right company, right business at right time.

In particular outlook for 2011 looks good to me from the Indian stock market point of view. I expect earnings to grow around 15-18% next year, which would provide further upside to the stock market and justify valuation for the market. I believe sectors which are underperforming over the last 1 year or so would start catching up with rest of the market. It could be infrastructure, metals and oil & gas. I’m not so bullish on Real Estate even after recent crash in many of the stocks. I believe IT stocks should also do well and grow earnings by 18-20%. It’s worth to put money in some of the beaten down midcaps which has high growth potential. Let me recommend some of this which could make money for readers of this blog.

- UCO BANK – CMP RS. 115: UCO BANK is one of my favorite stocks. I recommended this stock at Rs. 59 in January’2010 - http://indianstockmarketexpert.blogspot.com/2010/01/investment-idea-uco-bank-by-stock.html . It has proven to be good investment for the readers as it has touched high of Rs. 150. It was one of the best performing stock over the last one year. Now stock has retraced a bit due to recent scam news in PSU BANK. It’s been consolidating for a while and formed a base around current levels. I believe it has potential upside of RS. 140 over next few months. I recommend buy for the stock with target price of RS. 162 and RS. 180 for the medium and long term view respectively.

- IDBI BANK – CMP RS. 165: This is also one of the very good stock to remain invested for longer period. I recommended this stock at RS. 129 on 29^th Dec – 2009 http://indianstockmarketexpert.blogspot.com/2009/12/stock-recommendation.html. It has touched high of RS. 200 and now again available at reasonable valuation to get into the stock again. I believe this bank has got huge potential to become one of the larger PSU BANKS in India. It has got huge customer base, strong financial performance and investment in lot of companies in the stock market. There’s potential chance of listing of subsidiaries in the company which would again unlock value of this stock. I recommend buy on this stock with potential target of RS. 216 and RS. 234 over the medium and long term view.

Happy Investing!!

Investment Idea : UCO BANK by stock market expert

noreply@blogger.com (Pratik Modi) — Wed, 27 Jan 2010 11:15:00 +0530

I'm glad to share one more excellent investment stock idea: UCO BANK with you people.
It's PSU bank which has excellent track record. It has announced it's 3rd quarter results for FY10. Profit went up 42.74%, net interest income increased almost 40%, Deposits grew almost 20% in this quarter.

UCO BANK is one for the best performing PSU BANK and also its candidate for acquisition by bigger PSU banks. For now there's no such announcement from government but this is well known rumors in the market about small PSU banks.

After its excellent performance in this quarter stock has touched it's 52 week high for Rs. 66. Currently stock is trading around 59 Rs. I strongly believe that in the next upmove it will by pass it's 52 week high.

Other Factors:

- UCO BANK has planned for FPO to raise around 400-500 crore from the market by March END.

- If we calculate no. equity shares UCO Bank is likely to divest and the amount it's going to raise PRICE for IPO Comes between Rs 66- Rs 82.

- Technically stock is showing really good support around 56-58 Rs.

I recommend to buy UCO BANK with short term target of 66 Rs. which is more that 10% gain from current levels and long term target of Rs. 76-80. You'll see stock at higher levels by April-May'10.

Happy Investing!!

Disclaimer: I have investment in UCO BANK. Please take your own call before investing in the stock.

Stock Market Review and Outlook Next week

noreply@blogger.com (Pratik Modi) — Sat, 23 Jan 2010 13:27:00 +0530

It was turbulence on the DALAL STREET last week. NIFTY and SENSEX lost around 4.1 % and 4% respectively.

People were talking about correction which was pending for last few weeks, finally came with Bang. For last couple of weeks markets were bit confuse about decisive directional move. Finally it got bunch of bad news which gave direction to the market.

Reasons:
- It was disappointing set of earning numbers from Major player like L&T.
- Monetary tightening concerns in China after posting excellent Q4 GDP.
- Obama new proposal to put strict restriction on the big banks and new firms on WALL STREET.
- Commodity related stocks fell due to concerns about overheating in China.
- Realty stocks got hit as investors are bit skeptical before RBI policy meet next week.

Now what's next?

Positive Factors:
- Nifty managed to close above 5000 levels which is showing some strength and will recover if there's support from global markets.
- Most of the RBI actions have been priced-in, so market will avoid any out come from RBI policy meet if there s no major Negative surprise.
- There was some buying interest from Domestic Insurance Players on Friday which gave some strength to market.

Negative Factors:
- Markets were down with enormous volume. I look for this factor for directional move and picture doesn't seem to be good.
- FII's were net seller last couple of weeks and now DII's joined them as well.
- U.S. Markets got hit badly on Friday which may get reflected on Monday.
- If nifty breaches 5000 on closing basis then we may see levels of 4914 - 4860.

Advice to Investors:
- Get ready with money to invest in the market. If you get fall in the market next week invest partial money around levels of 4860-4900.
- For trading purpose pick up some of the High Beta counters like HDIL, Sesa Goa. You'll get quick returns in these stocks. It's high risk strategy.
- Look for PSU stocks which were tumbled last week and enter at 30-30% discounted price. I believe it's the best place to be invested.

I'll come up with investment idea for different stocks when market comes to suggested levels.

Happy Investing!!

JUBILANT FOODWORKS IPO ANALYSIS : DOMINO'S PIZZA

noreply@blogger.com (Pratik Modi) — Tue, 19 Jan 2010 10:08:00 +0530

JUBILANT FOODWORKS has come up with an Initial Public offer (IPO). It's planning to raise around Rs 328 crore. They have kept price band of Rs 135-145 per share. IPO closes on 20th January.

Should you subscribe?

- For pizza lovers it's good to invest in the company where they ideally pay money to their own company by visiting Domino's Pizza. Apart from that I don't see any benefit out of the company.

- I would advise retail investors not to carry away with the current IPO trend where Investors have made quick money on the listing day. There's no point of investing in all the IPO's.

Reason:
- Most of the raised money is going to be paid to Promoters. There's not major expansion plan for the company using our money.

- Domino's Pizza is having 286 stores around different cities. By giving current valuation and money they are raising, value for per outlet comes around 3 crore rupees. It seems to be really expensive when you get it for Rs 50 Lacs.

- There's lot of competition in the market from US Pizza and other local players. I personally prefer US Pizza over Domino's due to service and variety.

- At current IPO price company is trading at around P/E multiple of 35, which looks really expensive for me.

Positive:

- Jubilant Foodworks IPO is first of its kind in Indian stock markets. We don't have any previous data about peers to compare. It may deserve some premium.

Take your own call after reading this article.

Happy Investing !!

Risk VS Stock Market

noreply@blogger.com (Pratik Modi) — Sun, 10 Jan 2010 16:23:00 +0530

People use to come and ask me "Is it safe to invest in Stock Market??". They don't want to take risk for the money which they earned by truly working hard for it.

This article is dedicated to all such investor who could earn more by parking their money in right investment instruments.

Please take a look at the below year on year comparison for the Sensex only. You'll see average return of 22 %. Even if you don't know anything about stock market this is just simple calculation and you would have earned lot of money by investing in Equity and Equity related instruments over the period.

Sensex Valuation
Year	First Trading Day of Jan	Last Trading Day of Dec	% Change
1991	999.26	1908.85	91.03
1992	1957.33	2615.37	33.62
1993	2539.62	346.06	1.75
1994	3465.86	3926.90	13.30
1995	3932.09	3110.49	-20.89
1996	3127.94	3080.20	-1.37
1997	3260.56	3658.98	12.22
1998	3694.62	3055.41	-17.30
1999	3060.34	5005.82	63.57
2000	5375.11	3972.12	-26.10
2001	3955.08	3262.33	-17.52
2002	3246.15	3377.28	4.04
2003	3390.12	5838.36	72.23
2004	5915.47	6602.69	11.62
2005	6679.2	9397.93	40.70
2006	9390.14	13708.34	45.99
2007	13942.24	20286.99	45.51
2008	20300.71	9647.31	-52.48
2009	9958.22	17464.81	75.38

Above comparison shows that investing in the stock market for longer period always rewards you with handsome return. Make investment as your habit and do it for long term.

For new investor or people who don't have time to check market pulse daily, I would recommend to investment in Mutual Funds. You'll be amazed by some of the Mutual Fund Performance.

Below table gives you idea about the enormous wealth a MF could create for you over the period of time.

Value of Rs 1 Lac - Invested in NFO
Company Name	Launch Year	Initial NAV	Present NAV	Today's Valuation
Birla Sun Life Mid Cap Fund	Oct'02	10	104.84	10,48,400
Sundaram BNP Paribas Select Midcap Fund	July'02	10	134.99	13,49,900
Reliance Growth Fund	Oct' 95	10	427.35	42,73,500

I would advice all the small investor to start SIP - Systematic Investment Plan to invest into MF schemes. This is the best method to start investing in Equity. This is same thing like recurring deposit you are aware of. Only difference is the return you get here. In recurring deposit you'll hardly get return of 6 % which has no comparison with MF returns where you'll get much more return for your valuable money. I'll come up with new article about MF schemes which has great track record for creating wealth for investors.

In country like India we have higher inflation. Most important if you'll check Food Inflation which is necessary for common man it's around 18 %. Do you think parking your money into Bank FD's would help you to sustain in the environment?

I won't answer this question. Take your own call and now rethink if investing in stock market or equity related investment instruments is risky or You are at much higher long term risk by not to investing in the stock market.

I'll come up with some more articles which will really change the way you think investing in the stock market.

Happy Investing !!

DB Corp IPO Minting Money as Suggested

noreply@blogger.com (Pratik Modi) — Wed, 6 Jan 2010 20:18:00 +0530

Congratulations to all daily readers!!

DB Corp - one of the leading Daily share price got listed at Rs 250. It has touched an intraday high of Rs 274.60 and low of Rs 235.50.

Finally it closed at Rs 265.90 which is almost 25% gain on the day 1. It's truly star listing.

I'm really happy for the followers of this blog who subscribed for the IPO after my detailed analysis about the DB Corp IPO.

You can find the previous post on DB Corp IPO here which tells you about future prospects for the company as well.

As I mentioned in that post DB Corp had left some money for the investor. It was cheap compared to it's peers, reasonably well growth story and due to that it attracted lot of appetite in the market on day 1.

I recommended subscribe with price target with 15% upside on the listing day. DB Corp has already achieved it and in fact followers of this blog are sitting on almost 25% profit on day1.

Happy Investing!!

Godrej Properties Listed at Rs 510 as suggested

noreply@blogger.com (Pratik Modi) — Tue, 5 Jan 2010 19:23:00 +0530

Godrej Properties got listed at Rs 510 per share as suggested in my blog post on this Sunday.

Click here to read the details.

Godrej Properties has touched intraday Rs 586.70. I already indicated this fact in my previous article under Company fundamental section "Qualified Institutional Investors looks quite bullish on the stock, which can add some premium to the counter on the listing day. If this continues you'll see appetite for the stock from Mutual Funds, HNI and Retail Investors"

As I anticipated Godrej Properties has given good return to the investors on the listing.

Now what’s next?

- Lets wait for stock to form base for now. It's likely to settled down around 535-550 Levels.

- Nifty is moving upwards which is good indication.

- Global markets are supportive as yesterday US markets were up and today Asian markets were buzzing.

- Today we had extremely strong breath. We can sense it from Advance Decline ration.

- People who already have position in the stock should continue holding it but keep a stop loss of Rs 495. New position could be taken if stock moves above Rs 575 levels.

Happy Investing!!

Godrej Properties IPO listing

noreply@blogger.com (Pratik Modi) — Sun, 3 Jan 2010 13:31:00 +0530

Godrej Properties equity shares will list on 5th Jan to the stock exchanges.

Earlier company has come up with IPO of 9429750 equity shares of Rs 10. Issue was open for subscription from Dec 9 to Dec 11. Company has got good response from qualified institutional investors where it got subscribed 7.45 times. Retail investors and Non institutional investor quota were not fully subscribed.

Company has fixed share issue price at Rs 490 per share, which is lower end of price band Rs 490-530. It has collected more than Rs 460 cr. from this IPO.

Reason for IPO:

- 30% of IPO money would be used for debt repayment.

- Company will acquire land development rights for upcoming projects, investment in new projects.

Company Fundamentals:

Positive:

- Company carries brand name of Godrej. Godrej Industries holds 80.26% in the company.

- Operates in the real estate sector where demand is likely to pick up in upcoming years after current slowdown.

- Qualified Institutional Investors looks quite bullish on the stock, which can add some premium to the counter on the listing day. If this continues you'll see appetite for the stock from Mutual Funds, HNI and Retail Investors

Negative:

- Many brokering houses have downgraded real estate as sector.

- People look more skeptical regarding turn around in the sector.

- Larger players are available in the market as cheap valuation.

Listing Price:

I see Godrej Properties to list around Rs 500-510.

Long term investors should wait for initial market reaction to get into the stock. One can buy this stock during market correction.

Happy Investing!!

JSW Energy Listing Price

noreply@blogger.com (Pratik Modi) — Sat, 2 Jan 2010 13:54:00 +0530

JSW Energy will list on coming Monday - Jan 4, 2010. JSW Energy shares will list on both NSE and BSE via public issue.

As many of us know that it's JSW Group Company and frankly speaking they have track record of making money for the investors. Most of their company stocks have outperformed stock market in 2009. Like, Jindal Steel and Power.

In fact they have given discount of Rs 5 for the stock to retail investors where issue price was fixed at Rs 95 per share.

IPO of JSW Energy was subscribed 1.68 times - taken from NSE Website. There was no hunger in the market for the issue as investors have not made money in other recent power IPO's like Adani Power and NHPC.

Qualified Institutional Investors portion was subscribed 2.88 times but retain and non-institutional investors were not much exited about the issue and their quota was not fully subscribed.

Company is planning to utilize raised amount to various power projects and reduce the debt. Thing which I'm glad about is that company will use some portion in Mining acquisition, which will result in giving competitive advantage to the company in the sector. This model will add up into bottom-line of company. As of now company is having 860 MW power generation capacities. With this IPO money they are planning to raise it 2790 MW.

Listing Price for JSW Steel :

Listing Price depends on various conditions like,
- Market opening on Monday. As we all know from Monday Market will open at 9:00 in the morning. So get ready to wake up early
. It's entirely new experience for all of us as our markets are now inline with global markets opening.
- Dow Jones and NASDAQ closed in red on Thursday. So we need to see if global markets are reacting on that.
- I don't see people buying this stock aggressively due to lackluster IPO response, peers are available at bit cheap valuation for now.
- I see listing around Rs 90 - 94 for JSW Energy.

Long term investor should wait for the market correction to get into the stock. One can buy around Rs 85 and hold it for at least 1-2 years.

Happy Investing !!

Nifty Options Strategy for Jan Series

noreply@blogger.com (Pratik Modi) — Wed, 30 Dec 2009 10:43:00 +0530

As we are seeing nifty ending almost to the high point of year it’s giving real comfort to the Bulls.

For last couple of days nifty is trying to break it's key resistance level of 5200. I suggest following option strategy for the next Jan series.
Strategy is derived to make use of Market Volatility. I believe in month of Jan we'll see very high volatility.

Options Strategy:
Buy 5100 PE - Current Price Rs. 93.50
Buy 5300 CE - Current Price Rs. 85

Total Money Paid: 8900 Rs.

Ideally you'll start making money nifty above 5350 and nifty below 5150 if nifty crosses the levels within first two weeks.

I'll keep you posted about when to exit this position.

Happy Investing!!

DB Corp IPO Allotment Status

noreply@blogger.com (Pratik Modi) — Sun, 27 Dec 2009 18:08:00 +0530

DB Corp IPO allotment status is available now.

Click Here to check your status.

Happy Investing !!

Market Outlook - Next Week : Rally to continue??

noreply@blogger.com (Pratik Modi) — Fri, 25 Dec 2009 15:31:00 +0530

We've witnessed excellent rally on the Dalal Street last week. After facing resistance for last 2 months, nifty able to cross 5180 and touched intraday high of 5197.

Bulls have geared up in fashion and trapped bears on last Thursday. Initially bulls built up fresh long position in the market with force due to which nifty climbed to 5070 from 5040 in just two minutes.There were people on the short side. They were shocked by this move but still continue to hold short position. By the time they can think of anything nifty reached to 5100 and they had to cover short position which led market to reach around 5150 levels. On Friday market opened in green following positive global cues. It burst in the last hour and touched 2009 high of 5197, after remaining quite for the day.

Now what next?
There are few reason for me to continue long position in the market and I'm bit optimistic that nifty will move towards 5380 - 5450.

- Christmas rally is underway now and it's likely to continue for while.
- Markets have touched new highs after consolidating for almost 2 months. This could lead markets to add 3-4% rally as traders would become active now.
- Lots of People/Funds/HNI are sitting on cash and market is not giving them chance for entry. This money will come into action once nifty closes above 5200.
- Earning season will set tone for the market in January.
- Fresh allocation for the equity will take place in January for many FII and Funds.
- This Christmas party is likely to continue till mid of January unless there's some brutal correction globally.
- There's ample liquidity in the system which is keep on flooding into the stock market. So even if stocks look pretty expensive at this point but this liquidity could take stocks such high which no one has anticipated.

My Recommendation:
- This up move should take nifty around 5380-5450 levels.
- Traders should hold long position if they've taken it already.
- Fresh long position should be taken only if nifty closes above 5200.
- Investors should hold there position and partially book profit around nifty levels of 5380.

Happy Investing!!

Stock Market Expert - Minting Money

noreply@blogger.com (Pratik Modi) — Thu, 24 Dec 2009 20:29:00 +0530

It gives me immense pleasure that lot of people are making money using investment and trading idea which I shared on this blog!!

Below are some of the gains that people would have made for my recommendations.

In coming weeks I'll come up with some more investment and trading idea.

Happy Investing!!

Investment Idea - Cox and Kings

noreply@blogger.com (Pratik Modi) — Wed, 23 Dec 2009 11:47:00 +0530

If some one will ask me about investment in the indian stock market, I'll go with only one theme. Invest in the companies which are leaders in their respective sectors or company which is showing excellent growth potential.

Cox and Kings come under both the above categories. Its leader in tours and travels and company is posting excellent results if you check last 5 years track record.

Indian tourism industry accounts for 6% of GDP. So I believe there is immense opportunity for the company to expand. Think from common mans point of view. You can see now lots of people are spending money on trip outside India or within India as well. Industry is growing at really good pace and leader like Cox and kings will definitely get benefit out of it.

Financial:

- Company has posted excellent top line and bottom line numbers for last 5 years. One of the most consistent growth I've seen ever.
- Company was managed to achieve almost 23% CAGR growth for last 5 years.
- Company is looking to grow inorganically as well by several acquisitions.

News and Peers comparison:
Today stock price was quoting at around 430 rs. It's still looks cheap when we compare its peer Thomas Cook.
Also there's going to be news flow in this counter. Company has tie-up with Indian Railway for special tourist train which is going be launch in January. This positive announcement will definitely help the counter to break its highs and move towards 500 Rs.

Mutual Fund:
Most of the mutual fund which are doing good have opted for Cox and Kings. They do so after doing lot of research about the company growth which can reflect in their own growth.

I recommend BUY on Cox and kings at current levels with medium term price target of 510 Rs and 1 year target of 660 Rs.

Happy Investing!!
Disclaimer: I do hold Cox and kings since it's IPO.

Investment Idea - Rural Electrification Corporation

noreply@blogger.com (Pratik Modi) — Sat, 19 Dec 2009 17:06:00 +0530

After recent rally people are really skeptical about picking stocks as they've seen really huge correction in stock market once after market was making new highs.

Now people use to ask me which stocks to buy after markets have doubled in last 8 months. They are long term investors and want to invest for 5-10 years.

I recommend REC to all these investors and there's enough reason for me to do so. This is the must buy stock which should be there in ideal portfolio.

REC is a Navratna company having robust revenue and growth. It's operating into landing money for power generation distribution and electrification to the various project across India. As we know there's lot more buzz on power sector and it's likely to be sector of next decade. So what to pick out of these sector? Let's pick the best stock which will turn multibagger for us in next ten years. It's already multibagger for the people who have accumulated the stock on each down turn.

Now there's news flow as well. Government will come up with Follow on Public issue for REC, mostly in Jan-Feb. We've heard lot more about disinvestment and REC will get benefit out of it.

I personally hold REC since IPO - Feb 08 when I got it for 105 Rs. and then stock moved to 60 Rs during pick of downturn. Afterwards it's marching towards new highs only. This price movement is based on fundamentals, robust revenue growth and news flow as well. It has touched all time high of 266 Rs. It has already turned multibagger for lot of people. Now it has corrected almost 12-14% and trading at around 230 Rs.

People who missed recent rally should go and buy stock like REC on every dip which will definitely reward them with good returns in upcoming years.

I think this is the best buy for the person who believes in INDIA GROWTH STORY.

Hope this investment idea would help lot of people. Please post your comment in case you have some query.

Happy Investing!!

Post Market Analysis - Bulls Vs Bear 18 Dec'09

noreply@blogger.com (Pratik Modi) — Fri, 18 Dec 2009 19:49:00 +0530

Today it was Bull vs. Bear for indian stock market.

Thought the day nifty was hovering around 5030 mark and also touched intraday high of 5058 due to positive opening of European markets.
In the last one hour market has lost fare bit of ground and slipped below 5000. Nifty future was trading in discount and nifty went to 4972, finally ended at 4987 middle of support zone of 4970-5000.

Reality was the biggest looser today which sold off almost 2.5%.
So, now what’s next?

- Christmas is on the way, so global markets are likely to wait for the outcome and then react afterwards based on spending data.

- Indian markets are likely to remain in trading range with positive bias.

- I believe interest rate hike has already been discounted in the banking stocks. So if there's no major surprise from RBI then we won't fall much.

- Closely watch support zone and in nifty breaches 4960-4970 on closing basis then we are definitely heading towards much lower levels. We'll see lot of unwinding in nifty long position also traders may go for fresh short. So take a call based on nifty closing above 5000 or below 4960.

As its Friday don't worry about market. Just spend some good time with family.

For new investor,
I'll come-up with article about stock market education which should help lot of people.

Happy Investing!!

Market Outlook for 17 Dec'09

noreply@blogger.com (Pratik Modi) — Wed, 16 Dec 2009 22:24:00 +0530

As mentioned in my yesterday's post about Market outlook, today nifty bounced back from key support zone of 5000 levels. It has not breached that level at all and then touched intraday high of 5072. Finally nifty closed in the green.

Yesterday, I recommended buying DEC 5100 CE at 69 Rs. Today it went up t0 81.50 Rs. One would have easily made almost 20% return on day one.

I would still suggest carry on with your long position and hold on to 5100 CE if you are already holding the position. You'll see nifty trading above 5100 shortly. Keep stop loss of 4970.

Fresh long positions could be created above 5055.

Now, what's next?

- Today bulls have geared up.
- Nifty future is trading into premium.
- Global markets are supportive. By the time I publish this article US markets - Dow and Nasdaq were up about 43 and 15 respectively. European markets were also trading high.
- Asian market are falling a bit for last couple of days, specially Hang Seng and tomorrow they'll might turn into green as global cues are supportive.

As all the above factors are positive and there’s no major cue for the market to break down, I would still go long on the market till nifty is holding above 4970.

Happy Investing!!

View on Telecom Sector

noreply@blogger.com (Pratik Modi) — Wed, 16 Dec 2009 12:06:00 +0530

Telecom Sector is likely to be underperformer for next couple of quarters.

There are some reasons behind this.
As we know most of the telecom operators like, airtel, idea, vodafone , reliance comm are now forced to adopt Pay per second plan
by TRAI. This will impact their margins at least by 20%. Also this sector is facing lot more competition from new players like Aircel, Telenor.

I don't think so these companies are likely to post good results any time soon.

Also if we'll take a look at the history Bharti Airtel is the only stock which is multi-bagger. Apart from that none of the stocks have rewarded investors with good returns.

Idea is still trading just above its IPO price.

Now what the investor should do? As Warren Buffet says buys the stocks which no one is buying due to temporary problem in the sector/company with good fundamentals.

These companies are undergoing with earnings downgrade and lot of negative news. So just wait for the market to digest all these news.
There's likely to be good opportunity after two quarters in this sector.

As we know there's lot more action on the internet platform. New revenue model is likely to come from that segment for the telecom sector.
3G Spectrum distribution is already going on for the companies.

For now wait for all these factors and do your home work before getting into the stock where you see clear visibility of earning.

I would advise to track idea and get into it at the right price.

Hope this will clarify some of your perspective on the telecom sector.

Happy Investing!!