How To Learn About Stock Markets?

Discussion in 'Money Matters' started by Anusha2917, Feb 1, 2021.

  1. Hopikrishnan

    Hopikrishnan Platinum IL'ite

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    Last edited: Feb 2, 2021
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  2. hrastro

    hrastro Platinum IL'ite

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    Thanx @Hopikrishnan . I understand what you're trying to say.

    But for most beginners, they don't understand the seriousness of "Well-informed of the prospects"

    Many get carried away by the glamour and numbers.... I have seen even experts discussing - one particular share gave > 1000 times return in the past year - they were discussing that if only I had invested 1 lakh in it in March last year, I could have got 10 crores !!

    But was there ANY way of predicting it? NO. Was that a stock with good fundamentals? NO.
    Could you have lost the entire amount - YES, most probably !

    What if you had taken a loan for it? What if you couldn't afford to lose that money? What if that was the entire life savings and you're already on the brink of retirement or big spends?

    I stress on "young" because they have a lot of active life left, they can still recover money or build a retirement fund.
    As long as your investment horizon is long term, you will definitely see the growth of good stocks whatever the market conditions

    So, I would still stress - don't go by "tips" informers & look for short-term profits.

    Do deep research, read widely, track regularly and invest carefully.

    Past performance is NOT indicative of the future returns.

    One has to be well-informed of the prospects of whatever enterprise that one buys a share in.
    I agree!

    Keep smiling
    HR
     
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  3. SunPa

    SunPa Platinum IL'ite

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    @Flyhigher , @Laks09 ,@hrastro have given so much to digest. Thank you!

    An amateur here. WARNING: half knowledge is dangerous, read at your own risk
    I didnt do all the right things but here are some little steps I took
    Enrolled in a course in Financial markets to get a bare understanding of the parameters. Like Price/Book ratio, PE ratio, PEG ratio, dividend yield and a million others. What , wasnt this supposed to be easy? What I was looking was not just the formula, but what could it mean. Some I think I get it, some goes right over my head . I keep reading now and then . And it also made me understand importance of diversification and the need to hedge. And a glimpse of what value investing is. And some of the methods like Dollar cost averaging is .Gave me some fundamentals. Is Amazon a good stock, yes but at what price ? A long long long way to go still.

    and this!

    On the practical side, I got impatient as the market dipped last year so took some calculated risks.
    I read up analyst reports, blogs of some retail traders, I trawl forums trying to make some sense of the talk, there is information and there is a lot of misinformation. And then there are such sophisticated charting, they talk about support and resistance, I desperately as I look into the charts my broker has, trying to make sense , pretending I understand. I focused on a more stable market ( less risks /lesser returns) and only recently peeped into US market. I am out for now. ETFs may be a safer option. Knowing when to invest and when to walk out , ah that is the secret. Following someone else is often like a little too late. You have to know to evaluate a stock and the industry to have some level of confidence and know when to get out without panicking.

    And Trading vs investment. Trading is the adrenaline boosting ride, investment is long boring walk. It is ok to have fun if you can afford once in a while but for long term planning a big no.
    Some who have successfully traded , have confessed to getting burnt initially. and the lessons they learnt are very important. So the question is can I afford to pay for such lessons?


    It is risky, very risky. As am amateur , I would say use money that you could afford to lose without heartache.
    TLDR - If you do not find it interesting, or you dont have the time for it, or cannot afford to lose, best to keep away
     
  4. Thyagarajan

    Thyagarajan IL Hall of Fame

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    :hello:Wonderful educative informative thread,
    deliberations are fine. Once a person hooked into it, it is fluctuating fortune bottomless labyrinth in India.
    Some sisters and few men do make a killing by killing the gullible.
    Shrewd sisters make cool profits that take care of monthly expenses toward tharkai. I recently advised one lazy investor in India in the following manner:

    Quote (.)

    Re: 227 Stocks Gave Over 10X Returns During 2000-2010

    The intention of the author of the message (that you had forwarded ) is definitely not to make you rich. Internet and e mail helps the insidious fraudsters to remain invisible and make riches by cheating the gullible.

    Read the reviews about the company in the link and also in Quora many laments how few lost amounts fast in stocks as recommended by this company plus the hefty fees of Rs. twenty or thirty thousand few months .

    RESEARCH AND RANKING Reviews, Employee Reviews, Careers, Recruitment, Jobs, Salaries, Contact Number, Address – MouthShut.com

    By studying past ten or twenty years stocks that multiplied ten or twenty times and the pattern is discovered and they expect same pattern would repeat for predicting future multibaggers! It is said if Trump read US sneezes indian stock market catches COLD.

    It is totally illogical and ridicules the common sense. If it was so easy, majority of people dealing in retail stocks for decades should be very rich. The cunning ones, the manipulators, the inside players, “Midas touch” like greedy men and a few ONLY could make and made rich money in stocks.

    If your advisor is so sure of predicting multibaggers now, Why he should not invest in those stocks and turn quick rich. If his forecast fails would you be able to trace him to get compensation? When substantial fees collected, he would simply vanish and one would not find him in the address mentioned in his message.

    I would propose to send a copy of this cheat’s message to SEBI with copy to this cheat. I have come across several fraudsters of this type that includes even Equity masters. Beware and aware. They will be incredibly coy & friendly but eventually insidious, treacherous and would back out, the moment target amount collected from gullible. (.) unquote

    Money Money Money Overnight Affluence

    Listen to variety of brokers, attend tutorials. Listen to webnares. But eventually one has to think analyse applying common sense in his own head and conclude before parting with hard earned money invested in (bogus) stocks.

    • Least rigmarole no headache, if one choose to invest in good IPOs for listing gains as I do!. I was lucky recently. Last but one - Burger King & the one listed today The Indigo paints. a whooping premium of over 85% on opening today. Most safest no brokerage on allotment. No payment till allotment. Money is safe.

    My mom and our domestic help in those days, invested all their savings from time to time only in silver and gold and over decades the price of silver and gold has been steadily growing giving returns over 8 to 10% and all that she bought only during off season. Hassle-free investment. No intermediary.

    But guarding these metals in those days was not costly but now it is quite expensive. With zero investments, and with one pillion - in chennai - by snatching gold chains from morning walkers in park or on sidewalk, youngsters are turning overnight affluent.

    Truly Only Jesus saves and all others spend ( in investments in stocks).

    Few talk of - moving averages -low highs & high lows - pivot point - price volume break out - and other blah blahs to impress others, while they worry deep about squaring up their previous losses.

    Anyway, in the heart of heart, I wish all the best to all those who like to play in stocks, shares & blue chips.

    Thanks and Regards.

    GOD - Do you know three ingenious young men in London, conceived this concept of trading in stocks : & Any idea whether they turn millionaires or paupers.
     
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  5. Flyhigher

    Flyhigher Gold IL'ite

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    Thanks for your feedback. I agree that putting the things in the cartoon or explaining using simple words helps beginners. I didn't mean to scare/discourage anyone. I apologize if it looked discouraging. I need to work on my writing skills in order to present things in a more polished way.
     
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  6. Anusha2917

    Anusha2917 IL Hall of Fame

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    Thank you so much for some wonderful explanations . Even though I have read most of the replies I'm yet to put effort to understand correctly.

    More questions in the coming days once I get to understand the topic better
     
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  7. Hopikrishnan

    Hopikrishnan Platinum IL'ite

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    Time for Review Questions?
    Here are a dozen questions, pretty basic ones:​
    What are shares ?
    What is the difference between a stock and a share ?
    Why do companies have shares or stocks ?
    Do all companies have shares or stocks ? If not, why not?
    What is an equity ?
    What is a security ?
    What is dividend? Do all shareholders get it ?
    What happens to stockholders when the company goes bankrupt?
    What is a bond ?[when it is not 007, the guy who says "shaken not stirred"]
    Do all companies have bonds ?
    What happens to bondholders when a company goes bankrupt?
    What is debt to equity ratio ? Why do we bother with it ?
    Fill in the blank in this balance sheet equation: Assets = Liabilities + _______
     
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  8. lavani

    lavani Platinum IL'ite

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    here is a simple , sometimes dumb sounding strategy that worked. my uncle who is good in finance advised me 10 years back. i guess he took from buffet ideology.

    invest the money that you do not need forever :) sounds crazy .

    buy stocks that you know and hear daily. do not over complicate sometimes. and if you notice the business is not going anywhere , move out.

    1 example - 10 years back. i started buying 1 stock of tata steel every week. and 1 stock of tcs once every 15 days. now i have close to 1000 stocks . the dividend returns are amazing.

    the learning curve and world of finance is huge . do not get lost in over learning .

    us stocks similar example

    we are using walmart for years. T mobile , Verizon , AtT for years. same concept , they are dividend paying

    growth ones. -- you have been using amazon , netflix for years. imagine buying 1 every month 10 years back.
     
  9. SunPa

    SunPa Platinum IL'ite

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    Let me ask my noob questions here for the gurus to answer?.

    How are the telco major companies as an industry doing?
    I am vested with a local telco ( not US , not India) and they have been giving me decent divs, my plan was to stick with them for the next few years. What with 5G license, I thought they were a safe bet , with growth in future. One of their small acquisitions resulted in a loss last year. Share prices keep fluctuating, currently dipping, I wondered if I should invest a bit more.
    But when I looked at their financials , the revenue, profit yoy is kinda dipping, at least no growth from 2018. Debt is increasing, suppose with 5G there is a lot of investment. FCF seems increasing a little.
    I checked against AT& T and Verizon , noted kinda similar pattern. Is this a Telco thing? Shouldnt telcos be doing well in pandenmic world? Am I being over thinking?

    Any pointers to research , words of wisdom are most welcome
    TIA
     
    Last edited: Feb 3, 2021
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  10. Minion

    Minion Platinum IL'ite

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    Musk Targets Telecom for Next Disruption With Starlink Internet

    Elon Musk targets telecom for next disruption with Starlink internet - ET Telecom
     
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