Wealth has three virtues.Bhog(expenditure),dan (donation) and finally nash(destruction).You should spend money for useful purpose or donate to the needy.If the above two purposes cannot be utilized then the third and final destination of wealth will be automatically enforced-which is destruction.Today the whole world is clutching gold,for which purpose? I belong to a village in Bihar and have spent many years there. Within these years i observed that from rich to a poor boasts of gold. A poor man also has gold, may be in a small amount, but he has . This gold has been carried on from posterity to posterity to be utilized in the time of distress. This gold is not elixir which will make on immortal. I have seen many people using gold to fulfill their commitment. Afterwards when the situation grew better, they again possessed gold several times greater than earlier.
In the year 1990-91, India mortaged gold to save her pride and to avoid financial crisis. Great Britain also sold 300 tones of gold around the year 1995-97 at $292. So, in this financial crisis why will America not sell gold? So ,if you short gold keeping in your mind your capacity and margin call then the chances are that you will make huge profits.
Reasons for the above assertions:-
If you see the past then the price of platinum was 2 or 2.5 times to that of gold. But today platinum is trading at $980 and gold at $900. If we see it in a technical view then this situation will be called divergence. This means that platinum will trade at $1800 or gold will drop yo $627 in the coming month.
In future,USA may sell gold and in this situation gold can plunge further deep. USA can do so to strengthen its dollar
In this article, i would write about crude, because due to my busy schedule may not permit me to write. After the production cut from OPEC, crude will not rise rather may fall to $65 or $45. So you should avoid taking buy positions in crude. All these forecasts are for trader with long term prospective and for those who can afford margin call according to their capacity.
Monday, October 13, 2008
Monday, May 19, 2008
Economic liberalisation irrepearable
In medieval era ,Mughal court occupied a prominent position.During Akbar's reign its position became even stronger.As a result this era was called as golden age of history.If we take a glimpse of the trodden time, then we will find that at that time economy was in full control of Indians.It was in its peak phase and was not influenced by other foreign economies. Every individual was satisfied and prosper.But when Jahangir came to power new developments took place. A foreign trader Tomos row(spelling may vary) stepped in India. He came with a motive of establishing trade relations.In his first interaction with Jahangir, he fell down on his feet to impress him.He also presented high quality wine and many precious gems.Impressed with his shrewd attitude , Jahangir awarded him the right to trade with India. In this way a new saga of trade with Britain commenced.To enhance trade relationships East India company was established which was a sign of their rising power. After the change in panorama , pressure started maintaining on India. It fell down like a pack of cards.India had unknowingly became a slave.Now Indians had lost their own control on their own possessions. The fate of India and Indians was now in the hands of the British premier, queen Elizabeth.Every word of her was the sole destiny of the Indians. Here we don't need to embody the effect of British rule on Indian politics,economy and culture. If we think today that in 250 years of slavery , Indians were merely economically exploited, then we might be partially correct. Beyond this exists a fact that Indians were polluted introspectively, and were transformed into a hypothetical Britisher.The most disastrous effect of British rule was the disintegration of India on the basis of religion , caste , race and regionally. At last the Britishers were forced to leave India but not before imprinting their own thoughts on every soul. Till today Indians think in English, this shows that we have lost our own homogeneous indigenous qualities. Our deep rooted culture , religion, Nationality has been already uprooted by the Britishers. They departed leaving their own thoughts in us.As a consequence of the actions of the past , today India is internally divided on the basis of caste , regionally and race.This is a real fact which we are not able to digest. At present we don't understand the meaning of true nationality.
Why this has happened?:- It started as a consequence of the actions of Jahangir. At that time he did not knew that generations to come will suffer due to his irrepearable decision.
Let's see one such suffering and the result..
In the year 1990-91 India was suffering from acute financial and economic problems. India's foreign reserve had slipped to a mere $1 billion and trade deficit had risen . The treasury could support only 7 to 8 month trade obligations. India was in an impasse . There was no other way to get out of this problem except keeping gold at stake ephemerally. At this time liberalisation supported our sinking economy. FII's got permission to invest 10% in a company's share.From 1992 there investment started prospering which helped in nurturing Indian growth story. The investment threshold kept on rising from budget to budget .In 2007 it touched cent percent mark in certain privileged sectors.
At present India's foreign reserve has rose to $300 billion (approximately) the pumping of money is still continuing. So in future due to these factors India will be forced to make rupee fully convertible.
Need :-To thwart India from external drift we had to support liberalisation in the past. But up to what extent was it correct? We increased the investment threshold. But in the wake of liberalisation, we forgot that we should be liberal only up to the point we need to strengthen our position . At that time we should have allowed investment in FDI route only and not in secondary market.
To obliterate British rule , mahatma Gandhi protested against various irrelevant means. He protested against the then mighty industrial good that was cloth. He persuaded every Indian to make their own cloth by the silent weapon charkha. The 18th century marked the genesis of industrial revolution. Its commencement had a very bad impact on hand loom industry. The revolution of steam engine and then power loom, totally revolutionised the world. It also contributed in economic well- being of the Britishers. But after mahatma Gandhi's decision the Britishers were forced to contemplate.
But in 1990-91 we again took refuge in the foreign shelter. We did not think about Mahatma Gandhi's simple path.We did not show any type of sacrifice during this period.We took a short cut path.We made liberalisation , our buzzword.Now we are ultimately dependant upon FII. Before India many countries like Brazil, Indonesia, Mexico showed their faith in liberalisation. but hey suffered from economic crisis. At present also many analysts think liberalisation as a positive step.But in reality, they fear from analysing its consequence.
In future India is going to have an acute economic crisis. But this can take time.The cause behind this will be our wrong implication of liberalisation.
Why this has happened?:- It started as a consequence of the actions of Jahangir. At that time he did not knew that generations to come will suffer due to his irrepearable decision.
Let's see one such suffering and the result..
In the year 1990-91 India was suffering from acute financial and economic problems. India's foreign reserve had slipped to a mere $1 billion and trade deficit had risen . The treasury could support only 7 to 8 month trade obligations. India was in an impasse . There was no other way to get out of this problem except keeping gold at stake ephemerally. At this time liberalisation supported our sinking economy. FII's got permission to invest 10% in a company's share.From 1992 there investment started prospering which helped in nurturing Indian growth story. The investment threshold kept on rising from budget to budget .In 2007 it touched cent percent mark in certain privileged sectors.
At present India's foreign reserve has rose to $300 billion (approximately) the pumping of money is still continuing. So in future due to these factors India will be forced to make rupee fully convertible.
Need :-To thwart India from external drift we had to support liberalisation in the past. But up to what extent was it correct? We increased the investment threshold. But in the wake of liberalisation, we forgot that we should be liberal only up to the point we need to strengthen our position . At that time we should have allowed investment in FDI route only and not in secondary market.
To obliterate British rule , mahatma Gandhi protested against various irrelevant means. He protested against the then mighty industrial good that was cloth. He persuaded every Indian to make their own cloth by the silent weapon charkha. The 18th century marked the genesis of industrial revolution. Its commencement had a very bad impact on hand loom industry. The revolution of steam engine and then power loom, totally revolutionised the world. It also contributed in economic well- being of the Britishers. But after mahatma Gandhi's decision the Britishers were forced to contemplate.
But in 1990-91 we again took refuge in the foreign shelter. We did not think about Mahatma Gandhi's simple path.We did not show any type of sacrifice during this period.We took a short cut path.We made liberalisation , our buzzword.Now we are ultimately dependant upon FII. Before India many countries like Brazil, Indonesia, Mexico showed their faith in liberalisation. but hey suffered from economic crisis. At present also many analysts think liberalisation as a positive step.But in reality, they fear from analysing its consequence.
In future India is going to have an acute economic crisis. But this can take time.The cause behind this will be our wrong implication of liberalisation.
Monday, May 5, 2008
Stock market is a cyclic phenomena
Stock market is so complicated and so simple that it cannot be explained. a child knows about God only that much what a great saint knows. Nobody has seen God . Everybody defines god in virtue of his own ethics and beliefs .in the same way if we talk about stock market then it is so easy that everyone understands it in a first glance and so complicated that even big pundits cannot explain it. Everyone has his own analysis on the basis of the conclusion drawn from the facts, which depends upon his own skill and experience. but no one is one invincible here.then what attracts people towards stock market ?the man who does not knows about it regards it as gamble with gamut.some learned orthodox regard it as a play of manipulation. at present highly qualified fund manager take it as a high profile profession.they have their own research team. they regard it as the most important wing of financial sector.but the opinions of different people vary from each other .
Here we are going to talk about some untouched aspects of stock market.
In stock market the buyers and sellers bid at the same strike price. at that moment buyer thinks that the price is fine for buying and the seller thinks the vice-verse.in this way both buyer and seller bid and ultimately one's prediction gets wrong.we can compare it with a half filled glass of water. according to one person the glass is half-empty and for the other it is half-filled.in actual we can see that there is no difference between the two assertions ultimately , only there is a difference in perception and classification. in the same way if we see 6 through the opposite side then it appears as 9, but actually there is no change.so from the above we see that perception depends on our position. Albert Einstein in his 'special theory of relativity ' wrote that nothing is absolute in universe which means that we cannot say anything in motion or vice-verse.everything is in motion or in rest in respect to something .Einstein also said that universe is finite but unbound which means that it's frontiers cannot be observed even though they exists.in stock market also, we have the same principles working.here at the zenith also we have buyers and at bloodbath also we have sellers.this happens as every time the market is good or bad to somebody as it is not absolute but relative to the minds of people.
at every trough there is a crest and at every crest there is a trough.but during these ups and downs, many banks and individual face doom.many people leave this market for good.they regard stock market as the worst place.so sometimes stock market becomes desert and sometimes green meadows. after such events also market is running from 1650A.D and will continue to run in future.
you would be thinking that from where does this money come ? In reality it is a phenomena much similar to water cycle. you must have seen an ocean.everyday millions of lake, ponds and rivers bring large amount of water with them, still the level of water in the ocean remains constant.large ice-caps on mountain peaks are the source of these perennial rivers. in this case there is no water reservoir on the top of mountains , still then the cycle is continuing from millions of years. yes, this phenomena is water cycle. the water from the ocean forms water vapour, which when condenses results in the formation of rain.this water from the rain flows through the river.
in stock market we have the same kind of play.capital market is an ocean,big financial institutions are perennial rivers whose source is Himalayan glacier.but small investors are drains,which exists due to rain water, after that they vanish.
in bullish market small ponds and springs flow with full energy into the market.but when the inevitable draught comes(crash) they disappear.
if we observe human population cycle, then we will see that within 10 years a new pack of juveniles of 20 to 30 years of age group enter the market .they are filled with full energy .they have very high risk taking capacity. at this time they enter a new phase of life with a rejoiced mood.same is the case with financial institutions. they also have new and energetic fund manager and analysts. these factors make the market bullish. the good monsoon, GDP growth, emerging market ,IT boom and high industrial production become the blossoming flowers that make the garden green and colourful. at this point large tides can be seen in ponds and lakes also(small investors). stock market becomes the buzzword everywhere.the FM gives the credits to his financial management skills. everywhere ecstasy fills the heart.every heart sings:-
जीबन का यह सपना अच्छा लगता है
फ़िर से कहो कहते रहो
बड़ा अच्छा लगता है ।
सेंसेक्स २२००० पर बड़ा अच्छा लगता है
फ़िर से कहो कहते रहो
बड़ा अच्छा लगता है।
जीबन का यह सपना बड़ा प्यारा लगता है
सेंसेक्स भी ४०००० जाएगा
बड़ा अच्छा लगता है
फ़िर से कहो कहते रहो ....
in this heyday communist party remains adamant on its eternal philosophy of poverty. in practical communist party is directly dependant upon poverty and its eradication will have the same effect on the latter.They never laugh. they understand the ultimate truth of life.on the birth day of a child they are confident that it will die one day so they don't rejoice in birthday party .They say that what is happening with sensex is wrong so rebel it.but who listens to their wise sayings. at this time the juveniles are at the zenith of their age, so why should they think of old age. but old age is inevitable. it is a natural irreversible phenomena.
the finance minister and communists are both correct in their logic. a glass is half filled or half empty both are true at anytime. but at this trough , market fundamentals work and there is a crash.
the pack of juveniles is now of 30 years. they are married. now they have the onus of their wives and children. now their risk taking capacity has decreased. at last market bottoms out. but the cycle does not end here. again a new pack of juvenilles enter the market with rational outlook , again water starts flowing in dried rivers. the cycle continues...
here the question arise that what should we do?
if you keep a horizon of 30-35 years and practise systematic investment plan then you have a chance of becoming next warren buffet.
stock market is the best place, you may be wrong. this is an ocean which is a store house of gems. all kinds of dangerous sharks are found here. the water is saline, so you can't drink it. but circumspect and patience work can fetch you the gems. to accomplish this task, you have to extremely hard for 30-35 years. the following are some of the golden advises:-
1) if you are an intra day trader , then get out of this . for you this market is a gamble.
2) if you are of 20-25 years of age and are not expert then you would be the biggest loser. in future you may or may not work.
3) if you have seen both happy and sorrow moments and you know the reality of market then you may thrive for long.
4) if you are doing systematic investment then you have a chance of becoming world's richest person.
Here we are going to talk about some untouched aspects of stock market.
In stock market the buyers and sellers bid at the same strike price. at that moment buyer thinks that the price is fine for buying and the seller thinks the vice-verse.in this way both buyer and seller bid and ultimately one's prediction gets wrong.we can compare it with a half filled glass of water. according to one person the glass is half-empty and for the other it is half-filled.in actual we can see that there is no difference between the two assertions ultimately , only there is a difference in perception and classification. in the same way if we see 6 through the opposite side then it appears as 9, but actually there is no change.so from the above we see that perception depends on our position. Albert Einstein in his 'special theory of relativity ' wrote that nothing is absolute in universe which means that we cannot say anything in motion or vice-verse.everything is in motion or in rest in respect to something .Einstein also said that universe is finite but unbound which means that it's frontiers cannot be observed even though they exists.in stock market also, we have the same principles working.here at the zenith also we have buyers and at bloodbath also we have sellers.this happens as every time the market is good or bad to somebody as it is not absolute but relative to the minds of people.
at every trough there is a crest and at every crest there is a trough.but during these ups and downs, many banks and individual face doom.many people leave this market for good.they regard stock market as the worst place.so sometimes stock market becomes desert and sometimes green meadows. after such events also market is running from 1650A.D and will continue to run in future.
you would be thinking that from where does this money come ? In reality it is a phenomena much similar to water cycle. you must have seen an ocean.everyday millions of lake, ponds and rivers bring large amount of water with them, still the level of water in the ocean remains constant.large ice-caps on mountain peaks are the source of these perennial rivers. in this case there is no water reservoir on the top of mountains , still then the cycle is continuing from millions of years. yes, this phenomena is water cycle. the water from the ocean forms water vapour, which when condenses results in the formation of rain.this water from the rain flows through the river.
in stock market we have the same kind of play.capital market is an ocean,big financial institutions are perennial rivers whose source is Himalayan glacier.but small investors are drains,which exists due to rain water, after that they vanish.
in bullish market small ponds and springs flow with full energy into the market.but when the inevitable draught comes(crash) they disappear.
if we observe human population cycle, then we will see that within 10 years a new pack of juveniles of 20 to 30 years of age group enter the market .they are filled with full energy .they have very high risk taking capacity. at this time they enter a new phase of life with a rejoiced mood.same is the case with financial institutions. they also have new and energetic fund manager and analysts. these factors make the market bullish. the good monsoon, GDP growth, emerging market ,IT boom and high industrial production become the blossoming flowers that make the garden green and colourful. at this point large tides can be seen in ponds and lakes also(small investors). stock market becomes the buzzword everywhere.the FM gives the credits to his financial management skills. everywhere ecstasy fills the heart.every heart sings:-
जीबन का यह सपना अच्छा लगता है
फ़िर से कहो कहते रहो
बड़ा अच्छा लगता है ।
सेंसेक्स २२००० पर बड़ा अच्छा लगता है
फ़िर से कहो कहते रहो
बड़ा अच्छा लगता है।
जीबन का यह सपना बड़ा प्यारा लगता है
सेंसेक्स भी ४०००० जाएगा
बड़ा अच्छा लगता है
फ़िर से कहो कहते रहो ....
in this heyday communist party remains adamant on its eternal philosophy of poverty. in practical communist party is directly dependant upon poverty and its eradication will have the same effect on the latter.They never laugh. they understand the ultimate truth of life.on the birth day of a child they are confident that it will die one day so they don't rejoice in birthday party .They say that what is happening with sensex is wrong so rebel it.but who listens to their wise sayings. at this time the juveniles are at the zenith of their age, so why should they think of old age. but old age is inevitable. it is a natural irreversible phenomena.
the finance minister and communists are both correct in their logic. a glass is half filled or half empty both are true at anytime. but at this trough , market fundamentals work and there is a crash.
the pack of juveniles is now of 30 years. they are married. now they have the onus of their wives and children. now their risk taking capacity has decreased. at last market bottoms out. but the cycle does not end here. again a new pack of juvenilles enter the market with rational outlook , again water starts flowing in dried rivers. the cycle continues...
here the question arise that what should we do?
if you keep a horizon of 30-35 years and practise systematic investment plan then you have a chance of becoming next warren buffet.
stock market is the best place, you may be wrong. this is an ocean which is a store house of gems. all kinds of dangerous sharks are found here. the water is saline, so you can't drink it. but circumspect and patience work can fetch you the gems. to accomplish this task, you have to extremely hard for 30-35 years. the following are some of the golden advises:-
1) if you are an intra day trader , then get out of this . for you this market is a gamble.
2) if you are of 20-25 years of age and are not expert then you would be the biggest loser. in future you may or may not work.
3) if you have seen both happy and sorrow moments and you know the reality of market then you may thrive for long.
4) if you are doing systematic investment then you have a chance of becoming world's richest person.
Friday, April 25, 2008
investment through PN route and its effect
In the year 2002-03 market was sluggish .The prices of many companies were reaching new lows and facing doom. Let us take an example of a mid-cap share Fedder Lloyd. It's price in this period was about Rs 4 but in 2006-07 it reached the zenith of Rs 210.What was the cause behind the sudden spurt? If we see the development through a common man's eye then we can hardly find any difference.If we go back to factual data's then there was about 10-15% growth in village and semi-urban areas while in the stock market it was 50 times rise. What is the reason behind this rise? One of the main reason is the increase in inflow of money by FII in secondary market. This vast amount of money came via PN route .But this money caused many problems like the appreciation of rupee and mingling of foreign reserves.Due to this RBI took many steps and expressed it's concern over PN route inflow. At last the finance ministry decided to curb the inflow of money through PN route. in October '07 SEBI decided to stop further inflow of money through PN route and also advised FII and hedge funds to withdraw their PN route investments within 15 months.
After this announcement market reacted vigorously and their was blood bath but after every blood bath rescue measures starts by market regulators and finance ministry.This time also their was a same repetition.Indian people have short memory.They forget everything after month or two.Again the analysts show the virtual reality of Indian growth story with their lucrative statistical data's. History repeats itself . Again there was rise in stock price .on 10 Jan 2008 nifty was gyrating at 6357 and our beloved sensex 21206.At this heyday [zenith] big operators get chance to exit. This time also happened the same thing.
We all know the fact that within 15 months all investments through PN route is going to be liquidated. Then why are we becoming so much bullish in the market. we should invest after contemplating seriously. I f we see it with a pessimistic view then nifty has the potential to go down to 2600-3000. But don't get worried . This will not happen overnight. after many troughs and crests ,this will happen.we should also keep pace with shrewd FII.then we indians can make money in capital market. we should never buy at bouncy and never sell at panic.The investment coming through PN route will show it's consequences till Dec'08. At every apex hedge fund are waiting to liquidate their positions . So we Indians should remain cautious.
After this announcement market reacted vigorously and their was blood bath but after every blood bath rescue measures starts by market regulators and finance ministry.This time also their was a same repetition.Indian people have short memory.They forget everything after month or two.Again the analysts show the virtual reality of Indian growth story with their lucrative statistical data's. History repeats itself . Again there was rise in stock price .on 10 Jan 2008 nifty was gyrating at 6357 and our beloved sensex 21206.At this heyday [zenith] big operators get chance to exit. This time also happened the same thing.
We all know the fact that within 15 months all investments through PN route is going to be liquidated. Then why are we becoming so much bullish in the market. we should invest after contemplating seriously. I f we see it with a pessimistic view then nifty has the potential to go down to 2600-3000. But don't get worried . This will not happen overnight. after many troughs and crests ,this will happen.we should also keep pace with shrewd FII.then we indians can make money in capital market. we should never buy at bouncy and never sell at panic.The investment coming through PN route will show it's consequences till Dec'08. At every apex hedge fund are waiting to liquidate their positions . So we Indians should remain cautious.
Friday, April 18, 2008
Make money in crude
The price of crude is at all time high.International oil cartel is giving a number of reasons behind the rise in price.But this is a part of cyclic phenomena.Due to this exorbitant price there will be a decrease in demand, at higher level.So, bull liquidation can happen anytime.that is why one can short crude for medium term.
At present the price of crude is $115,but it has the potential to come down to $65 in a span of 3 to 4 months. If we see the movement technically ,then in historic price high sky is the limit, but here again the fundamentals come to rescue.
while doing analysis i have kept the following factors in mind:-
1) International oil supply
2)demand in world
3)long positions in it by bull cartels.
4)last 4 month price variation.
5)it's demand in future which may slow
So, from the above discussion i have deduced that if any stock market player goes short in crude with a horizon of 3 to 4 months ,then he would get a handsome profit.
Disclaimer-this article has been made to give you only information not as professional assistance.so please take it as information and take your own decisions
At present the price of crude is $115,but it has the potential to come down to $65 in a span of 3 to 4 months. If we see the movement technically ,then in historic price high sky is the limit, but here again the fundamentals come to rescue.
while doing analysis i have kept the following factors in mind:-
1) International oil supply
2)demand in world
3)long positions in it by bull cartels.
4)last 4 month price variation.
5)it's demand in future which may slow
So, from the above discussion i have deduced that if any stock market player goes short in crude with a horizon of 3 to 4 months ,then he would get a handsome profit.
Disclaimer-this article has been made to give you only information not as professional assistance.so please take it as information and take your own decisions
Tuesday, April 15, 2008
Nifty april series
Nifty is heading towards 5077 and 5105.at present many Indian analysts are suggesting to avoid long positions since the commencement of the month or to be more accurate ,from 4550-4600 levels.But their views and recommendations will change and become bullish when market will touch 5105. The concern arises at this point.from this point only it can be analysed where the next movement will be bullish or bearish.But my advise for short term is to remain cautious around 5100 level.
Day traders should avoid long or short positions.My experience says that day trader has not be able to make money in present,past or future.yes, but still they have vital role in the market.Since they are small players they have a brief effect on market and mainly contribute in raising liquidity for big players. So, due to the above facts never become a day trader.You should at least have a horizon of one week to one month, if you have market experience of 12 years otherwise you will be the ultimate loser.you may ask why 12 years?The answer is that within this long span you have seen large volatility in the market.After such experience,you have power to analyse various types of news and their impacts.you can also know the tricks of big payers like bull phase and bear phase. wait for the next article. disclaimer-this article has been made to give you only information not as professional assistance.so please take it as information and take your own decisions
Day traders should avoid long or short positions.My experience says that day trader has not be able to make money in present,past or future.yes, but still they have vital role in the market.Since they are small players they have a brief effect on market and mainly contribute in raising liquidity for big players. So, due to the above facts never become a day trader.You should at least have a horizon of one week to one month, if you have market experience of 12 years otherwise you will be the ultimate loser.you may ask why 12 years?The answer is that within this long span you have seen large volatility in the market.After such experience,you have power to analyse various types of news and their impacts.you can also know the tricks of big payers like bull phase and bear phase. wait for the next article. disclaimer-this article has been made to give you only information not as professional assistance.so please take it as information and take your own decisions
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