Thursday 13 June 2024

Why is share market knowledge is require before investing in stocks?

1.CORRECT TIME - I DON'T KNOW

2.WHY LONGTERM INVESTMENT IS SO BETTER IN SHARE MARKET

3.PORTFOLIO MANAGEMENT

4.MULTIBAGGER STOCKS


1.CORRECT TIME - I DON'T KNOW : 

Person A: He has 20 years of experience in

share market and have good knowledge. and

he very well earned. (lot of amount)

Person B: He also 25 years of experience in

share market and has knowledge. But he

earned a small amount.

Another person thought a share was good. but

with a little doubt he approached A and B and

asked if I invest in this share would give good

returns in the future.

The answer of these two persons A and B is as

follows.

Person A: “I DON’T KNOW” but this share is

good for investment.

Person B: This share is very good. Definitely

offers good returns, start investing immediately 

From these two answers of persons A&B, what

should we learn in share market. No one can

predict whether a company's share price will

rise or fall in the future. Even company

promoter also.

so, person A (rich knowledge and well earned)

said I DON’T KNOW. It takes a long time to

understand this (I don't know). But once

understood this, it is possible to everyone to

make a large amount of money in the share

market.

2.WHY LONGTERM INVESTMENT IS

SO BETTER IN SHARE MARKET:

it is not possible to say exactly how many years

consider for long term investment in stock

market. Generally, a term of 5 to 15 years is

considered as a long term investment. An

average of 10 years can be taken as a long term

investment. One thing to keep in mind is that a

long term investment means a lot of patience

only. See these two companies for example.

(made investor as a billionaire)



These two companies have strong

fundamentals, but these two companies take a

lot of time for an investor modified too bilinear.

Here I am not to say just invest in stock and

leave it up to 10 years or more. you exit from

stock only in one case. (when company

fundamentals are turn into weak.) otherwise

there is no need to get out from stock. A

company with strong fundamentals will one day

make huge returns. Some companies give 100

times returns within ten years. and some

companies give 100+ times returns after ten

years.

strong fundamentals::

1.company Doing business without debt

2.if the company has debt, the company's

profits should be at least seven times higher

than the interest on the debt

3.Eerning per share (EPS)

4.Return on investment (ROI)

Like this there are hundreds of FACTORS.

I can’t say that every company with strong

fundamentals will give good returns, because if

these fundamentals are turn into weak in future

the company has a 100% chance of going

bankrupt. So, we have to select 15 to 25

companies and invest in all. and these

companies should be reviewed occasionally.

3.PORTFOLIO MANAGEMENT

Through my experience in share market, I will

explain what kind of shares should be in our

account. This is called portfolio management.

Shares can generally be divided into four

categories based on market capitalization (Total

company value in rupees). See the table below.


REELIANCE, SBI are examples for large cap

What I mentioned in above table MARKET CAP

numbers >10000cr, 5000cr-10000cr, 1000cr-

5000cr and <1000cr are not a fixed numbers.

generally classified in this range. similarly Risk

and return also like this.

NOTE :: Try to understand this. after investment in

a stock the returns depend on company market

cap. if market cap grow 100 times, we get 100 times

returns. (i.e. MARKET CAP ∝ RETURNS)

Generally A large cap company will take at least five

years to double its market cap. Mid cap stock will

increase at least 5 times in this same 5-year period.

Mini cap stock will increase at least 10 times in this

same 5-year period. we can't imagine how many times

mini cap stock will grow; it maybe also grow 50 or 100

or 1000 times.


Similarly, considering the RISK based on MARKET CAP,

first of all the total investment become zero in the mini

cap stock only. (if anything, happen negatively)

So now let’s see how our portfolio should be.

In initial stage for beginners, It is possible to

manage 15 to 25 companies only. Therefore

take an average of 20 companies for

beginners.

BSE and NSE have a total of 10,000+

companies. We need to select 20 companies

with strong fundamentals from these 10000+

companies. See in the below table how these

twenty companies are there.


This is the best portfolio management I can

offer through my experience.

Portfolio management of any two persons will

not be the same.

Now let's see how investment start based on

MARKET CAP. If you think you have one lakh. It

is best to invest 20% in large and mid cap

stocks, 60% in small cap stocks and the

remaining 20% in mini cap stocks. It is also a

good idea to invest an extra money (if you

have) in mutual funds through SIP (systematic

investment plan).


4.MULTIBAGGER STOCKS

If the share price of 10 rupees today is becomes

100 rupees in the future, it is called 10 BAGGER

share. (i.e share given 10 times returns); if price

becomes 1000 rupees it is called 100 BAGGER

share. (i.e. share given 100 times returns); if price

becomes10000 rupees it is called1000 BAGGER

share. (i.e. share given 1000 times returns);

An outstanding knowledge is require to find the

share that will become MULTIBAGGER in the

future. These MULTIBAGGER STOCKS are mostly

found in SMALL AND MINI CAP STOCKS. (RISK

also);

From my outstanding knowledge I want to give you

some shares (25 SHARES FROM DIFFERENT SECTORS)

that becomes 100 to 1000 BAGGERS in future. (100 TO

1000 TIMES RETURNS); I am charging 1000 rupees for

offer these 25 shares. The main reason for charging

this 1000 rupees is, it took me four years to select these

25 shares. I have been reviewing these 25 shares over

four years and finally deciding that these all are STRONG

FUNDAMENTAL SHARES.

I will receive your PHONE NUMBER AND EMAIL ID

after PAYMENT. Because in these 25 shares, if

any share fundamentals turn into weak,

immediately i pass information (about hold or

exit from stock) through email or phone number.

The shares I offer you will take at least 7 to 10 years

to become 100 to 1000 BAGGERS. This is the

LONGTERM INVESTMENT.


STOCK MARKET IS A DEVICE

TRANSFEREING MONEY FROM THE

IMPATIENT TO PATIENT PERSION__________WARREN BUFFET

THESE THOUSAND

RUPEES IS YOUR FIRST

INVESTMENT FOR YOUR

ABUNDANCE AND

BILLIONAIRE LIFE.



    



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