EV/EBITA

EV - Enterprise value

EV = Equity + debt - reserves

EBITA = Earning before interest Tax and amortization

A between 1-5 is considered a good number

Relief Rally

A Relief rally occurs after a sharp and swift correction.A Relief rally occurs with little fundamental information to back the movement in price. This rally may continue just long enough for the "suckers" to get on board, after which the market or specific stock falls.

Stocks without build up positions during correction

The stock will not fall during a general market correction if there is no built up positions already. The fact is somebody must have the stock to sell, if nobody has the stock how can they sell!

Operating Profit

Operating Profit is the amount of profit a company makes from its core operation, excluding profits from other investments, interests etc.

This profit is exclusive of Interest and tax. Operation profit is also called EBIT( Earning before Interest and tax).

When the OPM keeps improving QnQ, that shows the companies is getting into better health.It means that the management is concentrating on the core business and its reaping good profits.So when a company turns around and its getting consistent with OPM, it shows that the company is going to make great profits in the future.

L&T makes you a millionaire in 8 years!

Annual Reports

Do you remember a big book delivered to your house every year from a company you invested. It looks like a telephone directory and you seldom open it!

That big chunk of papers hold the key to world of information on what the company is doing and going to do in the next 1 year. It speaks the Managements mind which is a vital information about the company.

Annual reports are for people who can really think long term. The key to Informed investing at a retailer level is amply available in the reports.

Wealth Creation

Wealth creation does not require much of general knowledge. A person who has acquired huge wealth in life need not scan through all the pages in the library and the news paper everyday. What he needs is specialized knowledge about how to make money in the given field he is in.

If general knowledge and subject knowledge is the key to opening to the door to riches, then University professors, Charted accountants and Bank managers will be the wealthiest people in the world.

A person need not know how many died in World war 2 or what is the distance between Chennai and Bangalore to be wealthy.To acquire wealth one has to posses the ability to use the specialized knowledge he has to acquire wealth.

Ratio in sales

Marketing is about increasing your ratio.

If you have met 10 customers and converted 2 to 3 then that is normal and you are okay for marketing

If you are able to improve your ratio to 50%. Then you are in the right path

Commodity and the stock market

The soft commodities like sugar, wheat, rice ,cotton , etc are seasonal and once the investor studies the previous year pattern, by applying the right mind and strategy he can make tons of money just by the seasonal trends.

The demand and supply equation in the commodities market plays a major part in the stock which are related to the corresponding commodity. When sugar prices go up in the international and domestic market, the shares too rise to the price rice

This also works for hard metals such as Copper -Sterlite industries , Aluminum - Hindalco etc. Its all about your mind and how you can mold it to the market!!

Stock trading strategy

Stock market investments/trading requires a lot of mind. You need to have the right mind to make money in stocks. Those who don't have a good strategy and are driven by green and excess fear are called suckers. You must have heard about the stock market jargon "suckers rally".

People sometimes say they want to buy a gift or they want to make a salary from a given investment amount every month.That will never happen. When you are in the markets you need to know what you are buying and what it is worth and your concentration should not go into making 20% from the given money. This makes you look at the 20% more than what the stock is really worth.

Your plan must be how to make money from the market and that should be it. If you happened to have a short term goal, that will keep your mind occupied in that. Keep looking for the right opportunities and when you find one .. just jump in and ride it, Up till you feel its good enough.

Identifying Virus stocks

Some of the points to dwell into Identifying Virus stock




1.The volume of the stock must have gone significantly high on a weekly or a monthly basis
2.New Funds entering the stock
3.Stocks without much fundamentals but in the HOT sector (eg.EVEREADY)
4.News of new order or development activity in the media

Becoming a smart investor

How do you become a smart investor?! Well how do you become a smart engineer,smart technician or smart driver. You need to know the game, you need to understand how it is played.You need the skill to observe.

Investments is one of the toughest things which affects you mentally. Great business men had great minds.So you need to have your mind strong to make good investments.You can sharpen your mind by understanding how the great minds did it.

So Two things are vital to become a smart investor, investment education and a great mind.

FII 's

The Foreign institutional investors are the people who move the Indian markets. Less than 1% of Indian population invest in the stock market. In the contrary more than 85% of Americans invest in the stock market.

The reason for low participation of Indians is deep rooted in their mindset of saving the money in banks or property.This mindset is transferred from the earlier generation which lived in socialist India. Most of the Indians come into the Indian stock market for making a quick buck.They view the stock markets as a betting place, they do not understand that while buying a share of a company they are becoming partners of the company!

Until the Indian public changes its mindset and start participating more in the stock market, we will be ruled by the FII's

False Rally

What is a Rally? A Rally in the stock markets is a movement of a whole range of stocks in a Bull market.

A False rally is a rally without volumes in the major stocks which trades in the stock market.The turnaround in the market is low and the market has gone up. What does a false rally imply, it implies that the rally will not sustain and the market will soon come down!

Virus stocks

Virus stocks are counters where the big fish comes in and buys huge quantity (1 lac in a stock average volume is just 5 thousand) without increasing the price and also buying at lower price levels. Then they push the price up with less volumes and sell of their entire or partial at good profits.

The main characteristics of a virus stock is once the buyer has bought huge quantities.The price will move up with less volumes.

Rules of Volume

Volume or Traded quantity is an important indicator for picking up a stock for trading.Be it commodities or stock the following rules apply

BULLISH

HIGH VOLUME HIGH PRICE
LOW VOLUME LOW PRICE

BEARISH

HIGH VOLUME LOW PRICE
LOW VOLUME HIGH PRICE

Reading results

The Quarterly and annual Result of companies have more information than the OPM, Sales and other Quantitative stuff that the general press publish. You need to read between the lines need to do a Qualitative analysis and get a analytical understanding of balance sheet to pick a good company.

Profit making or loss making alone does not give a good picture of the company.Some of the factors which should be looked into are

1.Order book
2.Long term and short term debt equity ratio (Short term is working capital)
3.Products of the company - innovative/competition/growth prospects/monopoly
4.Promoters buying/selling the stock
5.Vision of the company.
6.Company Management and change in company management
7.Advance tax payment increase/decrease
8.In case of banks the status of performing and non performing assets and bad loans
9.Whether the stock is in the radar of big brokerage houses
10.Whether company is turning around.

Sales snippets - 1

A good sales man knows whether his client is prospective or not. He can judge from the face of the buyer, whether he will buy the product or not.

An very important thing in sales is to follow up with people as much as possible. Follow up is more important than finding a client.

Elliots wave

Need to find a formula for Elliots wave based on the %returns in the past 7,15,21 days. And also finding when the turn around will happen like. Basically to find the reversal based on the elliots wave.

Sales secret

Most of the people in the sales never realize the main aspect of market. Following up: Just check this piece of information.

48% of sales people never follow up with a prospect.
25% of sales people make a second contact, then stop.
12% of sales people only make three contacts, then stop.
Only 10% of sales people make more than three contacts.
2% of sales are made on the first contact.
3% of sales are made on the second contact.
5% of sales are made on the third contact.
10% of sales are made on the fourth contact.
80% of sales are made on the fifth to twelfth contact.

Please check if you are doing the right thing to convert the sale

Capitaline database

There is a huge potential to use the capitaline database. It has quite a number of secrets in it.Like to find out who has more than 1% in any company in India.Need to find some good name for the service we give.

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