What is short-selling of shares?

Courtesy: Economictimes

Short-selling, in the context of the stock market, is the practice where an investor sells shares that he does not own at the time of selling them. He sells them in the hope that the price of those shares will decline, and he will profit by buying back those shares at a lower price. In India, there is no prohibition on short-selling by retail investors. Institutional investors —domestic mutual funds and foreign institutional investors registered with the Securities and Exchange Board of India (Sebi), banks and insurance companies — are prohibited from short-selling and are mandatorily required to settle on the basis of deliveries of securities owned and held by them. 

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8 ways to identify profitable shares

Courtesy: Rediff.com

Though investment opportunities abound all the time and in almost all situations, they may not be very easy to identify. A shrewd and discerning investor will usually find opportunities for making money in places, and in situations, where a less discerning one will not. The best investment opportunities are often found in the most unlikely of places and situations. For example, in the beginning of 1994 few could have predicted that the shares of the then relatively unknown company like Infosys Technologies, focusing primarily on Y2K software projects, would provide one of the best investment opportunities of the last decade.

Let us consider some typical situations which provide excellent investment opportunities like Mergers, Takeovers, Acquisitions, Technology Innovations etc.,

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What is Hedging?

In recent times, I am coming across the term HEDGING a lot. So just thought of learning what hedging exactly is? and here is what I got to know…

In finance, a hedge is an investment that is taken out specifically to reduce or cancel out the RISK in another investment.

readmore… 1. http://en.wikipedia.org/wiki/Hedging

2. http://www.investopedia.com 

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The dos and don’ts of buying stocks

Thanks - Rediff  and OutlookMoney

So you’ve made up your mind to invest in the stock market. For investment-innocents, here’s a shocker: It is not where you invest your money, but how you invest it that decides the profits. That is to say, stocks are only as good as the investor; they respond to the individual’s abilities and acumen. In that sense, stocks are quite distinct from consumer durables. You can reasonably expect a washing machine to perform as well for you as for your neighbour, but that is not the case for stocks, which are a different breed altogether.

So, instead of investment tips, here are some attitude tips.

1.Don’t commit large amounts of money or short-term money.

2.Do be sceptical of self-proclaimed experts.

3.Don’t trade for short-term. 

4.Invest long-term in fundamentally strong companies. 

5.Don’t ignore stock fundamentals.

6.Do be critical of media reports

7.Don’t follow other investors blindly. 

8.Do stay away from a large number of stocks.

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Lesson for Stock Market players. :)

The Stock Market simply illustrated…. There is a lesson here….

Once upon a time, in a village a man appeared who announced to the villagers that he would buy monkeys for Rs10. The villagers seeing that there were many monkeys went out in the forest and started catching them.
The man bought thousands at Rs10 and as supply started to diminish and villagers started to stop their effort he announced that now he would buy at Rs20. This renewed the efforts of the villagers and they started catching monkeys again. Soon the supply diminished even further and people started going back to their farms.
The offer rate increased to Rs25 and the supply of monkeys became so that it was an effort to even see a monkey let alone catch it.
The man now announced that he would buy monkeys at Rs50! However, since he had to go to the city on some business his assistant would now buy on behalf of the man.
In the absence of the man, the assistant told the villagers. “Look at all these monkeys in the big cage that the man has collected. I will sell them to you at Rs35 and when the man comes back, you can sell it to him for Rs50.”
The villager squeezed up with all their savings to buy the monkeys. Then they never saw the man nor his assistant, only monkeys everywhere!!!!
Everything should be made as simple as possible, but not simpler.

I think.. we are villagers and the FIIs the Business man.

Stay Alive..