open interest

WHAT OPEN INTEREST TELLS US

A CONTRACT HAS BOTH A BUYER AND A SELLER, SO THE TWO MARKET PLAYERS COMBINE TO MAKE ONE CONTRACT. THE OPEN-INTEREST POSITION THAT IS REPORTED EACH DAY REPRESENTS THE INCREASE OR DECREASE IN THE NUMBER OF CONTRACTS FOR THAT DAY, AND IT IS SHOWN AS A POSITIVE OR NEGATIVE NUMBER. AN INCREASE IN OPEN INTEREST ALONG WITH AN INCREASE IN PRICE IS SAID TO CONFIRM AN UPWARD TREND. SIMILARLY, AN INCREASE IN OPEN INTEREST ALONG WITH A DECREASE IN PRICE CONFIRMS A DOWNWARD TREND. AN INCREASE OR DECREASE IN PRICES WHILE OPEN INTEREST REMAINS FLAT OR DECLINING MAY INDICATE A POSSIBLE TREND REVERSAL.

RULES OF OPEN INTEREST

IF PRICES ARE RISING AND OPEN INTEREST IS INCREASING AT A RATE FASTER THAN ITS FIVE-YEAR SEASONAL AVERAGE, THIS IS A BULLISH SIGN. MORE PARTICIPANTS ARE ENTERING THE MARKET, INVOLVING ADDITIONAL BUYING, AND ANY PURCHASES ARE GENERALLY AGGRESSIVE IN NATURE.
IF THE OPEN-INTEREST NUMBERS FLATTEN FOLLOWING A RISING TREND IN BOTH PRICE AND OPEN INTEREST, TAKE THIS AS A WARNING SIGN OF AN IMPENDING TOP.
HIGH OPEN INTEREST AT MARKET TOPS IS A BEARISH SIGNAL IF THE PRICE DROP IS SUDDEN, SINCE THIS WILL FORCE MANY 'WEAK' LONGS TO LIQUIDATE. OCCASIONALLY, SUCH CONDITIONS SET OFF A SELF-FEEDING, DOWNWARD SPIRAL.
AN UNUSUALLY HIGH OR RECORD OPEN INTEREST IN A BULL MARKET IS A DANGER SIGNAL. WHEN A RISING TREND OF OPEN INTEREST BEGINS TO REVERSE, EXPECT A BEAR TREND TO GET UNDERWAY.
A BREAKOUT FROM A TRADING RANGE WILL BE MUCH STRONGER IF OPEN INTEREST RISES DURING THE CONSOLIDATION. THIS IS BECAUSE MANY TRADERS WILL BE CAUGHT ON THE WRONG SIDE OF THE MARKET WHEN THE BREAKOUT FINALLY TAKES PLACE. WHEN THE PRICE MOVES OUT OF THE TRADING RANGE, THESE TRADERS ARE FORCED TO ABANDON THEIR POSITIONS. IT IS POSSIBLE TO TAKE THIS RULE ONE STEP FURTHER AND SAY THE GREATER THE RISE IN OPEN INTEREST DURING THE CONSOLIDATION, THE GREATER THE POTENTIAL FOR THE SUBSEQUENT MOVE.
RISING PRICES AND A DECLINE IN OPEN INTEREST AT A RATE GREATER THAN THE SEASONAL NORM IS BEARISH. THIS MARKET CONDITION DEVELOPS BECAUSE SHORT COVERING AND NOT FUNDAMENTAL DEMAND IS FUELING THE RISING PRICE TREND. IN THESE CIRCUMSTANCES MONEY IS FLOWING OUT OF THE MARKET. CONSEQUENTLY, WHEN THE SHORT COVERING HAS RUN ITS COURSE, PRICES WILL DECLINE.
IF PRICES ARE DECLINING AND THE OPEN INTEREST RISES MORE THAN THE SEASONAL AVERAGE, THIS INDICATES THAT NEW SHORT POSITIONS ARE BEING OPENED. AS LONG AS THIS PROCESS CONTINUES IT IS A BEARISH FACTOR, BUT ONCE THE SHORTS BEGIN TO COVER IT TURNS BULLISH.
A DECLINE IN BOTH PRICE AND OPEN INTEREST INDICATES LIQUIDATION BY DISCOURAGED TRADERS WITH LONG POSITIONS. AS LONG AS THIS TREND CONTINUES, IT IS A BEARISH SIGN. ONCE OPEN INTEREST STABILIZES AT A LOW LEVEL, THE LIQUIDATION IS OVER AND PRICES ARE THEN IN A POSITION TO RALLY AGAIN.
LET'S SUMMARIZE THESE WITH AN EASY-TO-READ CHART:



SO, PRICE ACTION INCREASING IN AN UPTREND AND OPEN INTEREST ON THE RISE ARE INTERPRETED AS NEW MONEY COMING INTO THE MARKET (REFLECTING NEW BUYERS) AND IS CONSIDERED BULLISH. NOW, IF THE PRICE ACTION IS RISING AND THE OPEN INTEREST IS ON THE DECLINE, SHORT SELLERS COVERING THEIR POSITIONS ARE CAUSING THE RALLY. MONEY IS THEREFORE LEAVING THE MARKETPLACE AND IS CONSIDERED BEARISH.

IF PRICES ARE IN A DOWNTREND AND OPEN INTEREST IS ON THE RISE, CHARTISTS KNOW THAT NEW MONEY IS COMING INTO THE MARKET, SHOWING AGGRESSIVE NEW SHORT SELLING. THIS SCENARIO WILL PROVE OUT A CONTINUATION OF A DOWNTREND AND A BEARISH CONDITION. LASTLY, IF THE TOTAL OPEN INTEREST IS FALLING OFF AND PRICES ARE DECLINING, THE PRICE DECLINE IS BEING CAUSED BY DISGRUNTLED LONG POSITION HOLDERS BEING FORCED TO LIQUIDATE THEIR POSITIONS. TECHNICIANS VIEW THIS SCENARIO AS A STRONG POSITION TECHNICALLY BECAUSE THE DOWNTREND WILL END AS ALL THE SELLERS HAVE SOLD THEIR POSITIONS. THE FOLLOWING CHART THEREFORE EMERGES:




WHEN OPEN INTEREST IS HIGH AT A MARKET TOP AND THE PRICE FALLS OFF DRAMATICALLY, THIS SCENARIO SHOULD BE CONSIDERED BEARISH. IN OTHER TERMS, THIS MEANS THAT ALL OF THE LONG POSITION HOLDERS THAT BOUGHT NEAR THE TOP OF THE MARKET ARE NOW IN A LOSS POSITION, AND THEIR PANIC TO SELL KEEPS THE PRICE ACTION UNDER PRESSURE.

SAR

Late Mr W.D. Gann's Stop And Reverse Concept
Definition:


A stop and reverse (often known as SAR) is a type of stop loss order that exits the current trade, and either simultaneously or immediately afterwards, enters a new trade in the opposite direction. Stop and reverse orders combine elements of trade management and risk management, and are used in place of regular stop loss orders.

When Are Stop And Reverse Orders Used?


Stop and reverse orders are used when a trader wants to reverse their position (hence the name stop and reverse). For example, if a trader is in a long trade, and wants to exit the long trade and enter a short trade at the same price, they would use a stop and reverse order. The same task could be accomplished manually (i.e. placing an exit order, followed by an entry order), but stop and reverse orders are more efficient as they can combine the entry and exit into a single order.

How Do Stop And Reverse Orders Work?


Stop and reverse orders not a standard order type, and are not offered by many brokerages or any exchanges (that I am aware of). Therefore, stop and reverse orders are usually implemented by the trader's trading software (order entry software), and therefore their implmentation can vary significantly, but with the same end result (a new trade in the opposite direction).

If a trader's trading software does not offer stop and reverse orders (many do not), the trader can create a stop and reverse order by doubling the number of contracts (or shares, or lots, etc.) in their stop loss orders. For example, if a trader is in a long trade with one contract, a stop loss order that is placed for two contracts will function exactly like a stop and reverse order.

Note that stop and reverse orders are not related to the Parabolic SAR indicator, however, a trader that is trading using the Parabolic SAR indicator may use stop and reverse orders in their trading.

Also Known As: SAR


(courtesy: about.com)

Mr Gann calculated SAR from the previous two trading days data. If Downtrend, he would use the Highest High of previous two trading days as SAR, if Uptrend he would use previous two trading days' Lowest Low as SAR. I would use it in conjunction with the multiple band analysis, and the Normal Probabality Theory, that I had been using hitherto. I hope this refinement brings you and me profits unimaginable...and this is what trading is all about...isn't it?

OPEN INTEREST

Futures Open Interest
Interest is the total number of options and/or futures contracts that are not closed or delivered on a particular day.

Open interest is NOT the same thing as volume of options and futures trades.

Time Trading Activity Open Interest
Jan 1 A Buys 1 option and B sells 1 option contract 1
Jan 2 C Buys 5 options and D sells 5 options contracts 6
Jan 3 A sells his 1 options and D buys 1 option contracts 5
Jan 4 E buys 5 options from C who sells 5 options contracts 5



On Jan 1, A buys an option, which leaves an open interest and also creates trading volume of 1
On Jan 2, C and D create trading volume of 5 and there are also 5 more options left open
On Jan 3, A takes an offsetting position and therefore open interest is reduced by 1, and
trading volume is 1
On Jan 4, E simply replaces C and therefore open interest does not change, trading volume increases by 5.



Open interest, the total number of open contracts on a security, applies primarily to the futures market.
It is often used to confirm trends and trend reversals for futures and options contracts.


What Open Interest Tells Us
A contract has both a buyer and a seller, so the two market players combine to make one contract.
The open-interest position that is reported each day represents the increase or decrease in the number of contracts for that day, and it is shown as a positive or negative number.
An increase in open interest along with an increase in price is said to confirm an upward trend.
Similarly, an increase in open interest along with a decrease in price confirms a downward trend. An increase or decrease in prices while open interest remains flat or declining may indicate a possible trend reversal.


Rules of Open Interest
If prices are rising and open interest is increasing at a rate faster than its average, this is a bullish sign.
More participants are entering the market, involving additional buying, and any purchases are generally aggressive in nature.
If the open-interest numbers flatten following a rising trend in both price and open interest, take this as a warning sign of an impending top.
High open interest at market tops is a bearish signal if the price drop is sudden, since this will force many 'weak' longs to liquidate. Occasionally, such conditions set off a self-feeding downward spiral.
An unusually high or record open interest in a bull market is a danger signal. When a rising trend of open interest begins to reverse, expect a bear trend to get underway.
A breakout from a trading range will be much stronger if open interest rises during the consolidation. This is because many traders will be caught on the wrong side of the market when the breakout finally takes place. When the price moves out of the trading range, these traders are forced to abandon their positions. It is possible to take this rule one step further and say the greater the rise in open interest during the consolidation, the greater the potential for the subsequent move.
Rising prices and a decline in open interest at a rate greater than the seasonal norm is bearish. This market condition develops because short covering and not fundamental demand is fueling the rising price trend. In these circumstances money is flowing out of the market. Consequently, when the short covering has run its course, prices will decline.
If prices are declining and the open interest rises more than the seasonal average, this indicates that new short positions are being opened. As long as this process continues it is a bearish factor, but once the shorts begin to cover it turns bullish.
A decline in both price and open interest indicates liquidation by discouraged traders with long positions. As long as this trend continues, it is a bearish sign. Once open interest stabilizes at a low level, the liquidation is over and prices are then in a position to rally again.


If prices are rising and the volume and open interest are both up, the market is decidedly strong. If the prices are rising and the volume and open interest are both down, the market is weakening. Now, if prices are declining and the volume and open interest are up, the market is weak; but when prices are declining and the volume and open interest are down, the market is gaining strength.


Volume and Open Interest


Used in conjunction with open interest, volume represents the total number of shares or contracts that have changed hands in a one-day trading session in the commodities or options market.
The greater the amount of trading during a market session, the higher the trading volume. A new student to technical analysis can easily see that the volume represents a measure of intensity or pressure behind a price trend.
The greater the volume the more we can expect the existing trend to continue rather than reverse.
Volume precedes price, which means that the loss of either upside price pressure in an uptrend or downside pressure in a downtrend will show up in the volume figures before presenting itself as a reversal in trend on the bar chart.
The rules that have been set in stone for both volume and open interest are combined because of their similarity; however, having said that, there are always exceptions to the rule, and we should look at them.


Price Volume Open Interest Market
Rising Strong
Rising Weak
Declining Weak
Declining Strong



So, price action increasing in an uptrend and open interest on the rise are interpreted as new money coming into the market (reflecting new buyers) and is considered bullish.
Now, if the price action is rising and the open interest is on the decline, short sellers covering their positions are causing the rally. Money is therefore leaving the marketplace and is considered bearish.
If prices are in a downtrend and open interest is on the rise, chartists know that new money is coming into the market, showing aggressive new short selling. This scenario will prove out a continuation of a downtrend and a bearish condition.
Lastly, if the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions.
Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions. The following chart therefore emerges:


Bullish An increasing open interest in a rising market
Bearish A declining open interest in a rising market
Bearish An increasing open interest in a falling market
Bullish A declining open interest in a falling market



DISCLAIMER:
Investments in stock markets are risky.
While you can earn excellent money, you can also loose a lot.
Information and advice is based on technical analysis and is provided without any liability
(financial or otherwise).

trading methods

Overbought:
A stock or commodity market condition where there has been significant trading bidding up prices to higher levels, levels which seem overextended

In technical analysis, it is a market in which the volume of buying that has occurred is greater than the fundamentals justify

A technical opinion that the market price has risen too steeply and too fast in relation to underlying fundamental factors

A technical condition that occurs when prices are considered too high and susceptible to a decline. Overbought conditions can be classified by analyzing the chart pattern or with indicators such as the Stochastic Oscillator and Relative Strength Index (RSI). A sharp advance from $15 to $30 in 2 weeks might lead a technician to believe that a security is overbought. Or, a security is sometimes considered overbought when the Stochastic Oscillator exceeds 80 and when the Relative Strength Index (RSI) exceeds 70. It is important to keep in mind that overbought is not necessarily the same as being bearish. It merely infers that the stock has risen too far too fast and might be due for a pullback.

A term used to describe a market or a stock that has appreciated so rapidly and has generated such excessively bullish sentiment that a near-term decline is highly likely

A physical asset or futures contract whose prices have been pushed up to a level that some believe is unrealistically high and cannot be sustained ie. when the speculative long interest has rapidly increased and the speculative short interest is sharply reduced




Oversold:

A term used to describe a technical opinion of a market has declined too steeply and too fast in relation to underlying fundamental factors

An analytical term for a stock that is underpriced

a condition of the marked after an abrupt recession. In this situation a correction rise is possible

A technical condition that occurs when prices are considered too low and ripe for a rally. Oversold conditions can be classified by analyzing the chart pattern or with indicators such as the Stochastic Oscillator and Relative Strength Index (RSI). A sharp decline from 30 to 15 in 2 weeks might lead a technician to believe that a security is oversold. Or, a security is sometimes considered oversold when the Stochastic Oscillator is less than 20 and when the Relative Strength Index (RSI) is less than 30. It is important to keep in mind that oversold is not necessarily the same as being bullish. It merely infers that the security has fallen too far too fast and may be due for a reaction rally.

The reverse of overbought. A single security or a market which, it is believed, has declined to an unreasonable level

A market which has fallen too far and too fast under excessive selling pressure and is expected to move back to a higher, more neutral level

Used in the context of general equities. Technically too low in price, and hence a technical correction is expected. Antithesis of overbought

A physical asset or futures contract whose prices have been pushed down to a level that some believe is unrealistically low and cannot be sustained ie. when the speculative long interest has been drastically diminished and the speculative short interest increases.

An equity (or market) that has gone down to which its valuation seems to support buying of the stock.



Swing Trading:

Opposite of daytrading. Swing Traders speculate longer term on prices of stocks, futures, etc.

This term is typically used to imply a style where one takes a position for several days to a few weeks. A swing trade might be completed in less than a week, or if the stock consolidates it might take several weeks. While a swing trader will watch the market very closely, this style does not require the trader to be in front a computer screen while the market is open. A swing trader will typically aim for a 10-15% profit on all trades.

Swing trading is commonly defined as a stock, index, or commodities trading practice whereby the instrument is bought or sold at or near the end of an up or down price swing caused by daily or weekly price volatility. A swing trade position is typically open longer than a day, but shorter than trend following trades or buy and hold investment strategies. Swing traders engage in prospecting changes in an instrument's price caused by oscillations between its price being bid up by optimism and alternatively being bid down by pessimism over a period of a few days, weeks, or months. Profits can be sought by engaging in either Long or Short trading

Identifying whether a market is currently trending higher or lower, or trading sideways and when this will change is a challenge for many swing trading and long-term trend following trading strategies

Swing traders do not need perfect timing - to buy at the bottom, and sell at the top of price oscillations. Small consistent earnings that involve strict money management rules can compound returns significantly.

Most important is to understand that there is no foolproof mathematical model or algorithm that will always work so only use them as research tools not decision making engines.

bse etf

BSE Codes Equity ETF’s
Equity ETFs
8 Benchmark Nifty BeES NIFTYBEES 590103
9 Benchmark Junior Nifty BeES JUNIORBEES 590104
10 Benchmark Bank BeES BANKBEES 590106
11 Benchmark Benchmark Mutual Fund – PSU Bank Benchmark ETF PSUBNKBEES 590108
12 Benchmark Benchmark Mutual Fund – Shariah Benchmark ETF SHARIABEES 590109
13 ICICI Prudential SENSEX Prudential ICICI ETF SPIcE(Sensex-ETF) 555555
14 Kotak Kotak Mahindra Mutual Fund – Kotak PSU Bank ETF KOTAK PSU BK 590107
15 Kotak Kotak Mahindra Mutual Fund – Kotak Sensex ETF Kotak Sensex –ETF 532985
16 Quantum Quantum Index Fund -ETF QUANTUM INDX 590110
17 Reliance Reliance Mutual Fund -Banking ETF REL BANK ETF 590105
18 UTI S&P CNX NIFTY UTI NOTIONAL DEPOSITORY RECIEPTS SCHEME (SUNDER) UTISUNDERETF 590102

nifty

Get this EOD Chart

CORRECTION

The approach is simple; first sell the half of your position if share price hits the low of last 10 trading days, and another half if it hits the low of last twenty days.

Fine, that was for your accumulated profit position on a long term trend. But what if you have identified a long term trend and you wants to initiate a position in it. A step wise approach will look like this:

Initiate the trade with a stop loss at the most recent support level. If you don’t get stopped out in the first instance itself, and the stock starts rising, convert the stop loss to the low of preceding 10 days if this 10-days low is above the first stop loss. (It is quite possible that it may take some days before your 10-days low get above your entry price. You have to remain patient if the trend is intact, and the movement is slow) As the trend continues, and 20-days low also comes above your entry price, just keep tracking your preceding 10-day and 20-day lows. On the signs of any correction, sell half of the position at the 10-days low stop and the remaining half at the 20-days low stop.

All that was for long term trend based position! But if you have initiated a position that is on short term, and is based on any event or news, save your profits by “Two and Four Low” approach. Sell half of your position, if price comes to last two days low stop, and sell another half if it comes to last four days low stop.

Last but not the least, a very important tip for you!

At sometimes, you get out of the winning trade on account of market correction, only to see the market rebounding and going higher. That’s painful if you are clueless whether to enter the trade again, if the trend is revived. There are two ways by which you can make the entry. First, if the stock reaches the next new high, get in with the stop loss at the low of the last three days or the most recent support level, whichever is higher. OR second, buy if the RSI changes from 30 or below and crosses 50, placing the stop loss at the three-day low.

day trading

Nifty has closed below 5 week MA indicating weakness.Trend line support around 4910
Weekly Pivot level 4970

Weekly Support:4885 4825

Weekly Resistance:5041 5137

Weekly Calls

IDBI buy with a sl of126.50 tgt 132 136

TATA STEEL above 542 tgt 551 558 564 572 sl530

SUZLON Buy above 87.3 for tgt of 88 91 95 Better buy 95 CEaround1.8 exit near 2.5

economic devolpments

1. Market View

2. Economic Indicators

i. Leading
10 year Yield
Bond Market
Commodities
Money Supply
Credit growth
Yield Curve
Corporate Bond Spreads
P/E ratio

ii. Coincident
Inflation
GDP
IIP
Core Infrastructure Industries

iii. Lagging
Exports
Imports

nifty analasys

--Nifty May future discount converted to premium of 2 points so cost of carry increased.
--Nifty open interest decreased by 1.3 lacs suggests short covering. (Total OI now at 3.89 cr)
--3600 puts had open interest of 32 lacs and 3800 calls had open interest of 36 lacs, so 3600 and 3800 will be important levels to watch for.
--India VIX closed at 57.02, increased by 4% suggests instability and uncertainity.
--US markets closed in green.

--Positional strategy for nifty—
---IDEAL STRATEGY—LONG.
---CLOSING STOPLOSS FOR LONG—3603.
---CLOSING STOPLOSS FOR SHORT—3707.

Common Mistakes

Here we will discuss in short about the common mistakes done by the Day Traders. Generally most of the investors loses money in the Day Trading due to the following facts: Investors does not know the correct rate of buying or selling or the exact time of entry. Most of investors do not concentrate on Stop Loss Concept which is very important in Day Trading. The investors generally sets their minds (bullish/bearish) for shares they are trading and will not follow the Stop Loss Concept and losses their money. The investors normally takes delivery of the shares in case if the price falls thinking that they will be able to sell at profit on the next day or two which actually may or may not work out. In which case they will be blocking their money in the market and also increases their loss.
Donot run behind daily up down. Do trade with concentration with peace of mind.


Donot make your mind & soul like machine. Stop trading some days unless & untill mind relax.

Donot disturb your mind for daily trading.

Donot blame your luck. Do trading in right way with your own decision.

When price is up ,After short selling, Wait for 10 to 15 days.you may get lower price

Donot trade second time before profit getting in first time.

Make charity of 1% & more of profit.

Trade always 2 or 3 good shares long time.

10 WAYS TO MASTER THE TRADE

1. Money management becomes your lifeline, and all your trading strategies start to revolve around its core. Risk control becomes a key aspect of every position you take. You accept that controlling losses has a far-greater impact on your bottom line than chasing gains.
2. You develop your own trading plans and strategies rather than relying on books, gurus or other people's opinions. You notice how you're finding more opportunities than you have time to trade while looking through your charts. You look forward to the trading day with a growing sense of confidence and empowerment.
3. You feel more like a student than a master. You learn new things every day and can't wait to apply them to real-life trading scenarios. You listen closely to everything you hear, trying to pick up hints and concepts that will improve your performance. You expand your studies into everything market-related, including economics, fundamentals and balance sheets.
4. You stop visiting stock boards and chatrooms, because they don't add anything to your trading goals. You realize that everyone in those places has ulterior motives. You develop a healthy skepticism about companies, market-makers and even other traders. You realize that no one is really interested in your success as a trader, except for you.
5. You become more private in your discussions about the market with family and friends. You learn to keep your opinions to yourself, because they're just idle discussion. You never talk about open positions or ask others what to do with them. You recognize that opinions count only when they're backed up by cold, hard cash.
6. Trading starts to feel like any other successful profession. Your average profits get bigger while your losses get smaller. You experience fewer drawdowns that drain your capital and undermine your confidence. Your trading day starts to get a little boring, but you prefer the lack of emotional highs and lows.
7. You grade your performance each day and recognize when your actions did not meet your rising standards. You notice how certain times of the day are particularly dangerous or rewarding for your trading style. You keep a written diary that describes your strengths and weaknesses in stark detail.
8. You never cut corners in your market analysis, no matter how tired or exhilarated you feel at the end of the day. You set aside time to review your daily results, download fresh data and uncover themes for the next session. You don't trade at all when nonmarket matters keep you from finishing your nightly preparation.
9. You watch all types of markets, even those you're not trading at the time. You realize the next opportunity could come from anywhere, and you want to be prepared. You also understand that your trading interests will change over time, so you want to be ready for the next big thing.
10. You keep detailed trading records and update them on a nightly basis. You look at both profits and losses with complete detachment and a keen eye for self-improvement. You don't "conveniently" fail to include those trades you'd rather forget about.

gold investment

The following table tracks gold's performance over the past 8 years in terms of 9 different currencies.


Source: GoldMoney


His thesis is that given these exceptional results, gold prima facie may look like a great 'investment'. But in reality, gold is not appreciating, rather currencies are getting debased.


Source: GoldMoney


The price of crude oil in terms of gold, for example, has basically remained unchanged over the 59 year period since 1950. Thus a gram of gold today buys essentially the same amount of crude oil it did in 1950. So, it there has been no appreciation from owning gold in real terms, but it has nevertheless achieved something very important: preserving purchasing power. Which, after all, is what money is supposed to do, but has failed to do so far because of inflation. After all, governments can keep making new money out of paper, but cannot possibly make new gold.

INVESTMENT

One of the Funny Thing about Stock Markets is that Every Time One Man Buys, Another Sells, And Both Think They Are Astute - Henry Ford
Profoundly exhibiting the predator's instinct of the players.When there is always going to be a Loser , who is to be blamed. While educating the unfortunate one, stock markets operate with the only principle that for every winner there is always a loser and Exchanges are Neutral. This
This primarily applies for secondary market investment. When the capital does not form the core of the business then the investment becomes pure speculation and based on perceptions. So shall be the returns. The values get higher and higher changing hands until it bursts. The cycle continues.


It’s human nature to find patterns where there are none and to find skill where luck is a more likely explanation (particularly if your’re the lucky [mutual fund] manager).” -Bernstein,William


Derivatives are the perfect example and the disappearance of big names in the recent days

The human ego to win at any cost is perfectly exhibited in stock markets.

The price of a scrip oscillating every day and every trading hour of the day in the name of price discovery when the business does not change in a given period. Too much of speculation and participation by media in creating a hysteria of a particular stock and perceptional value driving the price, the new age investor should be prepared for all eventualities of his trading decisions and do it with the clear knowledge that only the laws of the jungle will prevail.

or

Trading strategy for positional calls

****OPENING RANGE BREAKOUT********

Do not trade for first 15 minutes i.e. upto 10.10 AM.
first 15 minutes of trade is known as OPENING RANGE. (O.R.)
Write down High and Low of Opening Range.
now whenever trades above high or below low of Opening Range then it is known as OPENING RANGE BREAKOUT. (O.R.B.)
If O.R.B. is up then stoploss will be low of ORB for intraday.
same way, If ORB is down then stoploss will be high of ORB for intraday.
***********HOW TO TRADE FOR POSITIONAL CALLS USING O.R.B.*******

--------When call is 'HOLD LONG'

Do not trade for first 15 minutes.
now if OR breaks up then hold your longs keeping low of OR as stoploss for trading upto 3.00 PM.
after 3.00 PM if trading level is above our closing stoploss level then carry forward the long for next day.
If during inraday, low of OR is broken down and you have closed the long for intraday, then re-examine the level after 3.00PM. If trading above our closing stoploss level then re-enter long to carry forward for next day and if trading below our closing stoploss level, then do nothing.
--------When call is 'HOLD SHORT'

If OR breaks up then close your short. Re-examine at 3.00PM. If still trading below our closing stoploss level then re-enter short and carry forward it for next day. and if trading above our closing stoploss then do nothing.
If OR breaks the OR down then hold the short for intraday keeping high of OR as stoploss.after 3.00PM decide as per closing stoploss level.
----------When call is 'INITIATE LONG'

If OR breaks up then initiate long.
If OR breaks down then avoid the call.
---------When call is 'INITIATE SHORT'

If OR breaks up then avoid the call.
If OR breaks down then initiate short.

************CONCLUSION*****

Do not trade upto 10.10 AM.
From 10.10 AM to 3.00 PM trade with three levels(OR high, OR low, Closing stoploss) and one strategy (Long or Short).
after 3.00 PM trade with one level(Closing stoploss) and one strategy( Long or Short).

31 march 2009

Do not Buy if the Stock Trades below Stop loss level


Do not Sell if the Stock Trades above Stop loss level


Always use Stop Loss.


Nifty Future ( Intra Day )


For the month of April 2009 Nifty may take support at 2943...2966 Zone and face selling at 3147 and 3241 level.


Futures and Options traders may plan their activity accordingly.


Close below 3081 may favour bear only


For today's trading NF may take support at 2950..2920 zone.


Upper side it may face selling at 3011.3033 zone.


Expected swing for today's trading is 2920..3033


Stocks for Day Traders


PIVOT TABLE FOR TRADING NIFTY AND NIFTY STOCKS 31.03.2009


If trades above Pivot Point then Pivot turns Support level. If trades below Pivot Point the Pivot turns Resistance level


STOCK
SUPPORT-2
SUPPORT-1
PIVOT
RESISTANCE-1
RESISTANCE-2


NIFTY
2913.30
2950.80
3008.80
3046.30
3104.30


NIFTY 2900 CALL
121.10
151.20
200.60
230.70
280.10


NIFTY 2900 PUT
58.40
76.20
87.60
105.40
116.80


NIFTY 3000 CALL
76.60
99.20
135.60
158.20
194.60


NIFTY 3000 PUT
90.10
117.70
135.70
163.30
181.30


BHARTIARTL
567.80
588.80
603.60
624.60
639.40


BHEL
1412.60
1442.60
1491.30
1521.30
1570.00


DLF
153.10
159.30
169.50
175.70
185.90


INFOSYSTCH
1235.30
1268.40
1298.70
1331.80
1362.10


NTPC
160.90
172.30
178.90
190.30
196.90


ONGC
746.60
764.60
787.20
805.20
827.80


RELIANCE
1475.50
1496.00
1515.50
1536.00
1555.50


RCOM
157.50
162.80
171.40
176.70
185.30


SBIN
946.80
984.60
1051.80
1089.60
1156.80


TCS
485.10
504.20
537.10
556.20
589.10


Above calculations are based on NSE trading data on 30.03.2009.

Day Trading

Learn how to make huge profit in the first hour itself. Explained with charts and graphs.


Learn how to make profitable trade by using only one indicator in Bull market or Bear market.


Learn how to make winning trade by using Pivot Points successfully. Click to view screen shot of Pivot Table. Very useful for offline traders and those who do not have facility to view charts. All you have to do is enter the High, Low and Current price of a stock or indices. Support and Resistance levels are automatically updated.


Learn how to make mind blowing profit by using New Mid Point Trading Strategy. Very useful for offline traders. Just call your broker and ask High and Low price of a stock then trade as per the instruction given in the ebook.


Learn how to make profit any time during trading session by using Weighted Average Price. Very useful for offline traders. Just call your broker and ask Weighted Average Price and Current price of a stock then trade as per the instruction given in the ebook.


Learn how to Sky Rocket your trading profit by using Channel Breakout Trading Strategy. Best strategy to make profit in the afternoon session.


Learn perfect Swing Trading strategy used by Successful Traders using only one indicator.


Learn foolproof strategy for Buy and Hold type of Investment.


Learn all about Option Trading and perfect Entry and Exit Strategy.


Learn all about Candle Stick reversal chart pattern


Learn important chart patterns to be followed for successful Day Trading.


Learn all those Golden Trading Rules.


Learn how to choose stocks for Day Trading.

heavy stocks

Heavy weight index stocks
Ten stocks are controlling 52% of index
just watch this 10 stocks for market direction


BHARTIARTL 5.79%
BHEL 3.15%
DLF 3.33%
INFOSYSTCH 3.46%
NTPC 5.37%
ONGC 8.14%
RELIANCE 12.26%
RCOM 3.95%
SBIN 3.44%
TCS 3.12%

SAVING

25 Useful Financial Rules of Thumb
Monday, 9th March 2009 (by J.D.)
This article is about Hints and Tips, Money Hacks


If you're new here, you may want to learn what this site is about. I encourage you to subscribe to my RSS feed. Thanks for visiting!

Lately I’ve found myself using more and more financial rules of thumb. A rule of thumb is a general guideline, an easy way to approximate a value quickly. It’s not meant to be completely accurate. On a whim this weekend, I gathered together many of the general rules I’ve been using, as well as several others I found online. Thanks to those who follow me on Twitter, who also contributed suggestions.

For example, @FourPillars wrote, “I hate rules of thumb — they are a poor substitute for proper analysis.” He’s right, of course. Careful analysis always yields the best results. (And there are times when you need the advice of a financial professional.) All the same, it’s often convenient to get a quick estimate of financial numbers. For those situations, it’s helpful to know guidelines like the ones I’ve listed below.

Saving
The number one rule of saving is: Pay yourself first. Set aside your savings every month before you use the money for other things, including bills. Always pay yourself before anything else.

The standard rule of thumb is to save at least 10% of your income. I think a better goal is to aim for 20%. At MSN Money, Liz Weston writes that if you’re young, you can follow this rule of thumb: “Save 10% for basics, 15% for comfort, 20% to escape.”

Nobody agrees how much you should set aside for an emergency fund. Even the experts offer advice ranging from $1000 up to 12 months of expenses. (The most common suggestions range from three to six months of expenses.) However, via Twitter @The_Weakonomist offered a clever rule of thumb to determine how much to save during a recession: Your emergency fund should cover X months of expenses, where X is the current unemployment rate. In other words, because the U.S. unemployment is at 8.1% right now, you should aim to have enough money in the bank to cover eight months of expenses.

On Twitter, @JoyfulAbode reminds us to bank a raise: “Don’t let raises get to your head. If you get a raise, yay! More for savings! (Maybe take 20% to use in your non-savings budget.)” This is the best way to avoid lifestyle inflation.

Finally, never forget inflation. Inflation is the silent killer of wealth. The commonly-cited average U.S. inflation rate is 3% per year. But the long-term average (since 1913) is about 3.42%. As a rule of thumb, I figure that inflation runs 3.5% per year.

Investing
Because the United States had 25 years of stellar stock-market performance, many of the investing rules of thumb got thrown out the window. Now people are wishing they’d stuck to the basics. One of the most important things you can do is know your risk tolerance before you begin investing. The time to decide how much you can afford to lose in the stock market is before a crash, not after one.

For years, the asset allocation rule of thumb was to have X% of your portfolio invested in stocks, where X is equal to 100 minus your age — with the rest invested in lower-risk investments like bonds. (Thus, if you’re 30, you should have 70% invested in stocks and 30% in bonds.) Over the past ten or twenty years, “experts” began to play with that formula. Since I’ve been writing Get Rich Slowly, I’ve seen all sorts of variations on this rule, with some gurus recommending as much as 140 minus your age invested in stocks. With this guideline, I’d be 100% invested in stocks right now. This is dumb. I suspect that the current market is going to prompt a return to the traditional “100 minus your age” advice. (Another way to think of this is that the bond portion of your portfolio should equal your age, and the rest should be in stocks.)

One rule of thumb I’ve seen many places is to invest no more than 10% of your total savings in your employer’s stock. Remember that diversification is important. If your savings and your job are both with the same company, you have all of your eggs in one basket. This is risky. Famously, many Enron employees were burned when the company went under because they had been encouraged to keep their retirement savings in company stock.

Long-term, the stock market averages about a 10% return. But remember: average is not normal. Also, many experts (including Warren Buffett) expect stock returns to be lower over the next few decades.

Perhaps the granddaddy of all financial rules of thumb is the rule of 72. To determine how long it will take an investment to double, divide 72 by the annual return. Thus, if you’re earning a 4% return, your money will double in approximately 18 years. But if you’re getting 10%, it take just a little over seven years to double your capital.

Homeownership
Via Twitter, @MillionMommyND writes, “Need to cut back? Housing, cars, and taxes dominate most budgets. Make dramatic cuts to these budget busters first.” She’s right. As a rule of thumb, tackle big expenses before small expenses. If you can save 1% when shopping for your home or your car, you’ll save more than if you save 10% each month on your cable television. (Though you should still try to do that, too.) Here are some guidelines for saving on a home:

How much house can you afford? @FrugalTrader writes, “When getting a new mortgage, the balance should be less than 2x your family annual income.” So, if your family makes $120,000 per year, your mortgage should be $240,000 or less.

When lenders calculate how much house a borrower can afford, they use the debt-to-income ratio, a measure of how much of your income goes toward debt. These lending limits have crept upward with time. I’m a strong advocate of being conservative here. I believe your housing costs should be less than 28% of your gross income, and your total monthly debt payments should be less than 36%. These numbers provide ample room but prevent borrowers from being trapped by too much debt.

In the Olden Days, the standard advice was to consider refinancing your home if interest rates dropped by 2%. Closing costs are lower today, and now it often makes sense to refinance your home when interest rates have dropped by 1% from your current mortgage. As always, use this rule of thumb as a flag to start looking, but run the numbers before you take action. (Kris and I are signing on our refinance this morning! We’re dropping from 6.25% to 4.96%.)

Automobiles
After your home, your car is probably your biggest expense. One common rule of thumb when purchasing a car is to buy used, or to buy new and to drive it for ten years. Either one will save you big money. (Do both and you’ll save even more.) Here are a couple of guidelines to use when shopping for a vehicle:

On Twitter, @marubozo suggests the 20/4/10 rule of thumb for buying a car. You should pay at least 20% down, finance for no more that four years, and the payment should be less than 10% of your income. The first part of this rule prevents you from owing more than the car is worth, and the last two parts prevent you from buying more car than you can afford. (@ced1969 offers a different approach: “Never finance a depreciating asset, like a car. Pay cash and immediately start saving for the next one.”)

Here’s another one from Liz Weston: To approximate a new vehicle’s five-year cost of ownership (in monthly terms), double the price tag and divide by 60. Looking at a pimped-out Mini Cooper S? Double that $30,000 sticker price to get $60,000, and then divide by 60. Is it really worth $1,000 a month to get rid of your crummy Ford Focus? (Or bookmark and use the Edmunds True Cost to Own calculator.)

Finally, remember the advice of Tom and Ray, the Car Talk guys: It almost always makes more financial sense to repair your car than to buy a new one.

Retirement
Save for your own retirement before saving for your children’s college education. They can get loans for school. You can’t get loans for retirement. When you’re saving, remember the following:

The standard advice is to aim to replace 80% of your pre-retirement income. I think this rule is lame because it focuses on income and not expenses. Income is irrelevant. It’s what you spend that matters. Instead, I recommend a different rule of thumb: Base your retirement needs on 100% of your pre-retirement expenses — plus 10%.

Another approach to retirement savings says that you’ll need to save about 20x your gross annual income to retire. In other words, if you earn $50,000 per year, you’ll need $1,000,000 to retire. Again, I think this is lame because it focuses on income and not expenses, and expenses are what matter. But still, this can be a handy gauge.

In his fantastic book Work Less, Live More, Bob Clyatt shares a common retirement rule of thumb. If you expect to withdraw from your portfolio for 40 years or more, you can probably safely withdraw and spend 4% of its value every year. (Clyatt notes that you can increase this amount to 4.5% with only “slightly diminished safety”.)

Miscellaneous
According to Consumer Reports, when you’re faced with the repair of an appliance (such as a television or a refrigerator), you should buy a new one if the appliance is more than 8 years old, or if the repair would cost more than half what it would take to buy a replacement.

Here are some general rules for credit cards: If you carry a balance, you want a card with a low interest rate. If you don’t carry a balance, you want a card with rewards. In either case, you want a card without an annual fee. (And if you have trouble with compulsive spending, you don’t want credit cards at all!) For more information, read about how to choose a credit card.

Finally, if you get a windfall, use 1% to treat yourself. (Or maybe 2% tops.) Put the rest in a safe place and ignore it for six months. After you’ve had time to think about it, make your decisions. (Read more: How to manage a windfall successfully.)

Other guidelines
Strictly speaking, rules of thumb deal with numbers. Still, there are a lot of non-numeric guidelines that I think are useful to know. Here are a few:

Always take the employer match on the 401(k).
Never touch your retirement savings — except for retirement.
Never co-sign on a loan.
Avoid paying interest on anything that loses value. (Note that under normal conditions, home values appreciate slowly, so they’re not included in this guideline.)
Don’t mess with the IRS. When it comes to taxes, don’t try to cheat. Pay what you owe. Claim all the deductions you deserve, but don’t try to stretch things.
In general, save an emergency fund first; pay off high-interest debt second; and begin investing (at the same time you pay down remaining debt) last.
If you’re not willing to pay cash for it, then it doesn’t make sense to buy it on credit.
For more on this subject, check out the following articles:

Kiplinger’s Personal Finanace: How useful are financial rules of thumb
MSN Money: 16 favorite money rules of thumb
Paul’s Tips: Ten good rules-of-thumb for investing
CNN Money: A cheat sheet for millionaires to be: Financial rules of thumb
Fairmark.com: Roth IRA rules of thumb
Now it’s your turn. What rules of thumb did I miss? Do you disagree with any of those I suggested? What financial rules of thumb do you use when managing your money?

HELTH TIPS 5

Why you need to spring clean your body
Your body is naturally equipped with a self-cleaning process. But too much sugar, caffeine, processed foods, stress, and too little exercise can slow the body's natural detox function to a slow pace. And then your body can't clean itself when it is put up against the increasing number of harmful and toxic substances in the environment. Toxins come in many forms: pesticides in produce, formaldehyde in carpets and cosmetics, PCBs from plastic containers, dioxins from bleached paper products, and more.

Your body will process and eliminate some of the hordes of chemicals that enter, but overflow gets stored in the liver, lungs, kidneys, fat cells, intestines, blood stream, and skin—which can result in chronic illnesses down the road. When you undergo a detox, you get these toxins out of your system.

How do you know if you need a detox?
You know you're suffering from toxic overload if you are experiencing fatigue, memory decline, difficulty focusing, allergies and infections, irritability, anxiety and depression, difficulty with weight gain and weight loss, muscle and joint pain or weakness, skin rashes and outbreaks, recurrent yeast and fungal infections, constipation, diarrhea, abdominal bloating, and indigestion.

Most people report vast improvement in their symptoms after a detox. At first, you may feel a little fuzzy because of the toxins being released. However, when you stick with it, you will begin to feel more alert, energized, and full of vitality.

At-Home Detox
Start small! Begin with a one-day program and gradually increase to one week or more. Here are 5 steps to a daily detox that will gently cleanse your body:

1. Start the Detox Day Right
• First thing in the morning, drink one lemon squeezed in 12 ounces of warm filtered water. Lemon activates your liver to release toxins and helps to cleanse and move the roughage that stays behind in your intestines.

• Take acidophilus or a probiotic supplement. Acidophilus is one of the many "good" bacteria and yeasts known as the probiotics. Probiotics balance our intestinal functions, helping to break down food and control the "bad" bacteria that is also in your system—all of which optimizes the detoxification process. Always take probiotics on an empty stomach.

2. Your Detox Meals
These meals are designed to jump-start your body into becoming healthier.
• Breakfast: Eat oat bran cereal, brown rice, or any other whole grain cereal as long as it is unbleached and does not contain any added sugar or chemicals. Pair with unflavored soy milk.

• Lunch or Dinner: Eat any combination of beans, brown rice, oat bran, vegetables, and organic chicken, turkey, or soy-products. When you eat, notice how your food affects you. You should feel satisfied and energized. If you feel tired and sluggish, try eating smaller meals so that you don't overwhelm your digestion and interfere with the detoxification process.

3. Eat Green to Spring into Health
The green pigment in plants, chlorophyll, is structurally similar to the hemoglobin in the human body—the iron-containing element in blood. It increases red blood cell production and improves oxygenation, detoxification, and circulation. Be sure to eat several servings of fresh green vegetables every day during your detox. Try this super-cleansing broth and juice as a quick way to up your veggie intake.

Detox Broth: Add as many of these ingredients as you can into a large pot of filtered water: collards, Swiss chard, kale, mustard greens, cabbage, dandelion, Brussels sprouts, daikon radish, watercress, seaweed, shitake mushrooms, cilantro, garlic, leeks, fresh fennel, anise, fresh ginger, and turmeric. Boil until all ingredients are soft. You can make in a large batch and refrigerate for up to three days.

Detox Juice: Juice the following together: Aloe vera juice (which can be found in most health food stores), apples, asparagus, beets (including greens), cabbage, carrot and carrot greens, celery, cucumbers, and parsley. You can also purchase vegetable juice from the store, but be sure that it has no added salt or chemicals.

4. Supplement Your Detox
• Take a daily supplement of 1 tablespoon of flax seed oil, walnut oil, or deep-sea fish oil.

• Green Tea is a strong antioxidant, and a great beverage choice for your detox. Be sure to drink decaffeinated green tea.

• Dandelion and Milk Thistle both protect and restore the liver. According to Chinese medicine, the liver is most active in the detoxification process during spring.

• Ginger is a bowel and kidney cleanser. Make yourself tea from fresh ginger root during your detox.

A popular herbal formula among my patients is Internal Cleanse, a special combination of natural herbs to detoxify, calm nerves, clear the mind, promote emotional balance, and ease digestion. For more information, click here.

5. Take an Invigorating Herbal Soak
Soak for 20 minutes in a revitalizing herbal bath. Help draw out toxins by infusing your bath water with eucalyptus, wintergreen, peppermint, fennel, cinnamon, and epsom salts.

Spring may be the best time to cleanse your body, but you don't have to wait until spring to start. Detoxification and cleansing is a healthy maintenance program for all seasons.

May you stay healthy, live long, and live happy!

-Dr. Mao

5 secreates

I had been investing for a number of years before I learnt how to deal with risk. By solidly identifying some market opportunities I had achieved good results, but I treated finance as a game of chess, an exact discipline, where I expected to benefit from good decisions and suffer from poor ones.

1. How to deal with risk

This over-ambitious approach occasionally caused some bad habits. For instance, when I was not performing well, I made three basic mistakes:

I let losing positions drag on for longer than I should, as I hoped that eventually, I would be proved right.
I was a bit harsh on myself, and I assumed that to make a loss, must have missed something obvious.
I let it depress me that many hours of work on research and analysis could actually lead to failure.
Equally, when I made profits, I was over-ambitious and assumed that my reasoning had been right. I thought I was a hero!

Backgammon rather than chess

Fortunately, it didn't take long before I evolved a different way of thinking. I realised that luck plays a role in the investment world. Profits can be simply due to good luck, and losses simply due to bad luck. Financial markets are more like a game of backgammon than a game of chess, because unpredictable events in the markets simulate the involvement of the dice.

With this discovery I started treating markets as partly random and accepted that there was always going to be risk. There is no perfect investment or trade. This approach helped my trading enormously.

I stopped blocking the possibility of losses out of my mind like some dark fear, and I began to consciously anticipate them.
I accepted that it would not always be possible to find a reason for a trade going wrong, apart from just chance. So I gave up over-analysing losses with endless post-mortems looking for my mistakes.
I learnt to assess risks and look at factors like correlation and liquidity.
Having consciously recognised risk, I reasoned that it was not always a good idea to try and minimise it. I knew that having identified some comparative advantages, I had to trust them to work over time.
I accepted that even good ideas can lose money. That helped me to get better at cutting losing positions. Being wrong did not mean that I was a lousy trader. Even a trader with a comparative advantage will often make what is later found to be the wrong decision.
This attitude to risk is worth adopting. Accept that trading is unique�-- a doctor or a lawyer would quickly be out of business with the number of failures that are part of a trader's life.

2. Good ideas can lose money

In 1999 and early 2000, Warren Buffett was very sceptical about the rising valuations in the stock market, particularly those in the tech sector. Consequently, he didn't invest as aggressively as many other fund managers. Then, of course, in mid-2000 the share prices of many tech stocks collapsed to a fraction of their boom value.

It was a massive market crash, and the so-called 'Sage of Omaha' was proved right (yet again!). I'm sure, however, that even he must have felt some pressure when prices were relentlessly rising and his funds were under-performing. With his reputation though, his investors stuck with him through this difficult period, and he held firm. They believed that he had the right approach, even though he was not getting immediate results.

Analysis after a loss

If you've lost money on an investment, ask yourself questions such as:

Were you pursuing a genuine opportunity?
Did you understand how the market usually works?
Did you back a big idea or market anomaly that you had identified?
Was the potential reward worth the risk?
If you have let yourself down, learn from the experience and try not to do it again. But if the investment looks like it made sense, then try not to be put off. Accept that you cannot judge the quality of a single trade or investment by whether you made a profit or loss.

This approach is very disciplined. You do not want to change your investment style on the back of just a few disappointments.

The outcome of an investment or trade is not necessarily a true reflection of the merits of the original idea. Good ideas can lose money.

3. Wild swings and losses are uncomfortable, but they may offer the best rewards

While the markets have evolved and become increasingly sophisticated, there has been enormous scrutiny of just about every possible opportunity. Any obvious and reliable way to make money has now probably disappeared.

This means that there are fewer opportunities which offer smooth above-average returns. In fact, the opportunities likely to last longest are those which are the most uncomfortable. Would you be prepared to back an idea that would probably lose money eleven months out of twelve, even if it would probably pay off in the other month?

A lot of traders don't want that life. A lot of funds would be hammered with capital withdrawals by their investors. We live in a quarterly or annual reporting world. People evaluate performance over a given period and take action if results are not up to scratch.

By careful management of risk, however, you may be able to take on these uncomfortable types of investments. In the mid 1990s, I had "retired" and I only wanted to invest my own money. I continued to trade currencies and futures on my own account, and I also decided to start investing in early stage companies.

Early stage companies are often private companies which are not listed on any share market, although that is normally their aspiration. There are many of these little unlisted companies searching for financial backers, and they usually find it very difficult, since few investors are interested in them.

4. Opportunities may be found in areas that others find uncomfortable

One of my reasons for moving into this high risk sector, was that many people find the risk profile too uncomfortable. The majority of the companies fail, and the investor needs to select his investments extremely carefully, and trust that the winners will more than compensate for the losers.

Investors also have very little liquidity, and they may have to wait years for a chance to get some money back when the company floats on the share market or is acquired by another company.

This is why I came to the conclusion that good, small companies can be underpriced. This can be an advantage for anyone investing in start-ups if they are able to sort through the many companies looking for money and to choose the good over the bad. I have found the process is not that different to looking at the fundamentals driving currencies, interest rates or other markets, and over a ten year period, I have managed to achieve well over a 20 per cent�annual return despite the market collapse in 2000.

Not everyone though, can invest in unlisted companies. The minimum investment needed is at least 50 grand, and you probably need a network to make the introduction. However, I have also been able to apply the experience I have gained from dealing with unlisted companies to help me evaluate small companies which are already listed on the share market.

These are accessible to all investors. In a later chapter I will explore the fundamentals of small companies which I think are important for investors to assess. The small listed companies are also generally riskier than the big solid blue chip stocks, but by making an effort to investigate these opportunities and by managing your risk, you may find that these more uncomfortable investments offer a better price.

In general, keep a lookout for investments and trading styles that others don't like. It is logical that it may be here that you find the winners.

5. Diversify

The benefits of diversification are very well-known. There is a famous expression saying that diversification is the one "free lunch" for the investor. No collection of strategies would be complete without a mention of this easy meal. The world is risk averse. People want to avoid nasty surprises. Investors would prefer to have steady reliable returns, rather than potential wild swings of wins and losses.

Diversification can allow investors to reduce their risk without reducing their overall return. The idea of diversification is that it smoothes out the flow of wins and losses. It is unlikely that a variety of separate trading ideas will all win or lose at the same time. So even if we are placing riskier trades, it may not result in a riskier total portfolio.

I have discussed how I believe that uncomfortable trades with the big swings in wins and losses may offer the best rewards. So diversification is especially useful, because it may be possible to have a more comfortable existence, and still pocket the high return.

There are a few points to note about diversification:

You can diversify within an asset class. For example, a stock portfolio can have a mix of some blue chips with some small stocks.
Diversification across all asset classes (stocks, bonds, cash, gold, property, etc.) is more effective though, since the positions are less correlated.
You shouldn't keep a losing position simply because another one is doing well. I was once very sloppy with a losing currency position, because I had a bond position that was profitable, and in aggregate I wasn't losing money. I realised later, that had I used my usual discipline I would have cut the losing position and been much better off.
Every position in the portfolio should be based on its own merits.
Remember that you can keep cash as one component in a diversified portfolio.
Diversification is not an exact science. Since it is difficult to accurately measure risk, so for diversification a rough mix, based on instincts, is probably adequate.

(Excerpt from Taming the Lion: 100 Secret Strategies for Investing by Richard Farleigh, who made millions before he was 35 through shrewd investing. Published by Vision Books.)

WHAT DO YOU MEAN RETIREMENT ?

What is retirement? And what age should it happen? Is retirement an age or a sum of money?

These questions bug everybody who is at least 32 years of age. Why 32 years? Simply because it takes 2-3 years for the mind to accept that you are no longer in your 20s!

So suddenly you wake up to the rude reality of `retirement`. Retirement can be defined in many ways. For some people it is the end of a journey. For many others it is the beginning of journey. Largely it means life has reached a stage when you can do `what you want to do` than doing `what you must do`. To many people it is the financial freedom to choose between a `job` and a fun activity. It is the choice of going to office happily with a smile on your face instead of worrying whether your boss can sack you. It is the sheer financial freedom.

It normally happens at a particular age - and the age depends on your profession. If you are a gymnast you retire at age 17, if you are a tennis player you may retire at 32 years, a cricketer at age 35, a practicing doctor at age 70, a lawyer at age 75 and a politician at age 93! A business man can choose to retire at any age as he chooses; however, the physical health may not allow him to work beyond 65 years! So, largely retirement is a function of age and the strength of the human body to work.

So if a gymnast can qualify as a doctor and then become a politician he can really work long! On a serious note, the end of a corporate job happens when the calendar says your age is `58` - as per your birth certificate, you need to retire. However retirement can come any time depending on your health condition and on the economic conditions prevailing in the economy. If you are working in a growing economy with a large young population - there is likely to be a tough fight to get into the job market if you have been asked to take a break!

Post titlWhat is Recession? e here...

- It's all in your MIND! And we actually FUEL this recession much more than we think.
Just ask anyone from educated to non-educated person, from smart to dumb; everyone will talk about slowdown, recession, downturn in economy so and so. But do we know what is Recession and who really fuel this?

This story is about a man who once upon a time was selling "Wada-Pav" by the roadside.
. He was illiterate, so he never read newspapers.
· He was hard of hearing, so he never listened to the radio.
· His eyes were weak, so he never watched television.
· But enthusiastically, he sold lots of "Wada-pavs".
· He was smart enough to offer some attractive schemes to increase his sales.
· His sales and profit went up.
· He ordered more a more raw material and "Pav" and used to sale more "Wada Pav's".
· He recruited few more supporting staff to serve more customers.
· He started offering home deliveries.
· Eventually he got himself a bigger and better stove.
· As his business was growing, the son, who had recently graduated from college, joined his father.
· Then something strange happened.
· The son asked, "Dad, aren't you aware of the great recession that is coming our way?"
· The father replied, "No, but tell me about it."
· The son said, "The international situation is terrible.
· The domestic situation is even worse. We should be prepared for the coming bad times."
· The man thought that since his son had been to college, read the papers, listened to the radio and watched TV.
· He ought to know and his advice should not be taken lightly.
· So the next day onwards, the father cut down his raw material order and buns, took down the colourful signboard, removed all the special schemes he was offering to the customers and was no longer as enthusiastic. He reduced his staff strength by giving layoffs. Very soon, fewer and fewer people bothered to stop at his "Wada-Pav" stand. And his sales started coming down rapidly, same is the profit.
· The father said to his son, "Son, you were right".
· "We are in the middle of a recession and crisis. I am glad you warned me ahead of time."

Moral of The Story: It's all in your MIND! And we actually FUEL this recession much more than we think. What can we take away from this story?

How many times we confuse intelligence with good judgment?
Choose your advisors carefully but use your own judgment?
A person or an organization will survive forever, if they have the 5 Cs
* Character * Commitment * Conviction * Courtesy * Courage
The tragedy today is that there are many walking encyclopedias that are living failures.
The more practical and appropriate views on this economic recession is:
· This is the time to reunite together for any small or a big organization,
· This is the time to motivate and retain people which are the biggest asset,
· This is the time to show more commitments to the customers,
· This is the time show values of our company to the world,
· And this is the time to stand by our Nation".
· "People are as Happy as they decide to be"

GOLD

I am writing this article on Gold after receiving many enquiries from investors on “Gold as new investment opportunity”. Gold is now trading around Rs 15,650 per 10 gram. Gold now suddenly caught the attention of herd investors when value investors are selling their holdings. Another classic Herd Mentality (Reliance Power IPO) is now on the cards.



Gold was traded below Rs 12,000 levels per 10 gram for more than 1 year but no investor asked me about gold as investment. Now Gold is trading in the above 15,500 zone but people are now asking me about investment opportunities in the gold and my opinion on the target of 30,000 levels. This incident once again illustrated the “Herd mentality” of investors. These people will never learn in their life about the “value of investment” and “Margin of safety”.

Not many people talked about Sensex and stock markets when it was traded below 14,000 till September, 2007. When Sensex crossed the levels of 18,000, many people started investments in the stocks on the hopes 30,000 Sensex levels. Sensex deceived investors by reaching 21,000 levels and everyone knew the rest of the story.

History of Gold as investment:

See the Gold price chart below to know about the less volatile rise of Gold as investment.



Chart courtesy: indiabullion.in

Gold is traditionally treated as safe investment in the difficult times. Big investors will treat this as “Safe Hedge” when equities are not yielding good returns and when dollar is weak. Same thing happened in 2003 when equities are in down turn for 3 consecutive years. These people will sell their hedge holdings like Gold and FMCG stocks once equities make bounce back. But Gold is safe hedge against inflation.

History of gold prices (in rupees):

1930: 180 per 10 gram
1940: 360 per 10 gram
1950: 1000 per 10 gram
1960: 1110 per 10 gram

1970: 1840 per 10 gram
1975: 5,400 per 10 gram

2000: 3,000 per 10 gram
2006: 5,400 per 10 gram

2009: 15,700 per 10 gram.

Gold surprisingly gave 300% returns from 1970 to 1975 when world suffered worst ever recession after great Depression. Will the history repeat? That is the reason behind current “Mad Gold rush”. But if you invested in the Gold in 1975, your investment gave negative returns for the next 25 years.




Remember 2 things:

1. Gold generally trades in the lower range around March and July. Generally, it is the best time to buy gold and marriage season is the best time to sell God.

2. Below 11,000, Gold is a safe investment but above 15,000- it is only for traders but not for investors.

Future of Gold:




When stock markets are in down turn in 2002, Gold was at Rs 5,400 per 10 gram. Don’t forget that Gold traded below 9,000 per 10 gram till 2007 means you might have got routine returns from Gold investment. But investors who made investments in gold in mid-2007 are now making 70% returns in just 20 months. But I don’t know what will happen to gold investors who bought it at above 15,000 but they remain in losses even after 3 years. Why? Gold will recede to 11,000 levels once equities make comeback. What happened to crude oil will repeat in case of gold also. Don’t forget that Gold is not even an essential commodity. But Gold is a less volatile investment.

Examples:

1. Crude oil prices moved to $147 per barrel and Goldman Sachs people gave $200 per barrel target. It is now trading below the fundamental price at $35 per barrel.

2. Sensex moved to 21,000 and analysts and analysts gave 30,000 target. It is now trading at 9,000 levels.

3. Real Estate prices reached astronomical levels in 2007 but people bought land as if there will be no land available for purchase in future.

Interesting analysis from Zaverat:

If you invested 10,000 in various investments in the early 1999, following are the yields by 2004.

1. Fixed Deposit: 13,794.

2. PPF: 16,025

3. Gold: 15,064

4. BSE Sensex: 20,769. Equities saw the worst bear market in this time zone but gave good returns. 10,000 invested in Sensex is still 10,000 by 2002 but 20,000 by 2004.

Gold may deceive investors for some more time but investors should ask themselves some basic investment questions before making fresh investments.




1. “What is the fundamental value of the investment whether it is a share, real estate or commodities like gold?”

2. Whether the price already included the good news or not?

3. Why analysts are giving bullish estimates? Is there any truth?

4. Are there any better value based investment opportunities?

5. What are the historical moments of that investment?

6. Are we late in joining the party?

7. What is the margin of safety at current price?

My estimate on Gold:

I don’t know what will happen to the Gold in the next few days due to these “Herd investments”. But Gold will trade below 12,000 levels even after 3 years. What it means that you will not get a single rupee from Gold investments at current valuations if you are a long term investor. If you are a trader, enjoy the mania. Young investors should allocate 5-10% of your portfolio to Gold and buy at reasonable prices.

Article on Gold From 4Ps:

4Ps magazine published an article on "How to plan investments for 2009-10?". Magazine published articles on various investment options like Stocks, Commodities, Gold, Real Estate and Currency.



Image courtesy: 4Ps.

Highlights of the article:

Warren Buffett: Gold is the most useless commoditiy.

Stat: Rs 100 invested in Gold in 1979 is Rs 400 in 2009.

picking up a stock

Dabur can be bought as as a stock for swing trading near the levels of Rs 90 with target of Rs 100 with stop loss of Rs 85.

4. Hero Honda is another stock for swing trading which can enable one to make money as the stock can be bought near the level of Rs 915-920 for the traget of Rs 970 with stop loss of Rs 905.

march-09 market lots

Annexure-1

List of underlying in which market lot is being revised downwards:
Sr No Underlying Symbol Present Market Lot Revised market Lot
1 Sterling Biotech Ltd STERLINBIO 2500 1250
2 Lupin Ltd LUPIN 700 350

Annexure-2

List of underlying in which market lot is being revised upwards:
S.No. Underlying Symbol Present Market Lot Revised Market Lot
1 3I Infotech Ltd. 3IINFOTECH 2700 10800
2 Aban Offshore Ltd. ABAN 50 400
3 ABB Ltd. ABB 250 500
4 ABG Shipyard Ltd. ABGSHIP 550 3300
5 Aditya Birla Nuvo Ltd. ABIRLANUVO 200 400
6 Associated Cement Co. Ltd. ACC 188 752
7 Adlabs Films Ltd. ADLABSFILM 225 1800
8 Akruti City Ltd. AKRUTI 300 600
9 Allahabad Bank ALBK 2450 4900
10 Alok Industries Ltd. ALOKTEXT 3350 20100
11 Ambuja Cements Ltd. AMBUJACEM 2062 4124
12 Amtek Auto Ltd. AMTEKAUTO 600 4800
13 Andhra Bank ANDHRABANK 2300 4600
14 Ansal Prop & Infra Ltd. ANSALINFRA 1300 10400
15 Alstom Projects India Ltd. APIL 200 1200
16 Aptech Ltd. APTECHT 650 3900
17 Arvind Ltd. ARVIND 4300 17200
18 Ashok Leyland Ltd. ASHOKLEY 4775 19100
19 Asian Paints Ltd. ASIANPAINT 200 400
20 Aurobindo Pharma Ltd. AUROPHARMA 700 2800
21 Axis Bank Ltd. AXISBANK 225 900
22 Bajaj Auto Ltd. BAJAJ-AUTO 200 800
23 Bajaj Hindustan Ltd. BAJAJHIND 950 5700
24 Bajaj Holdings & Investment Limited BAJAJHLDNG 250 1000
25 Balaji Telefilms Ltd. BALAJITELE 1250 5000
26 Ballarpur Industries Ltd. BALLARPUR 7300 14600
27 Balrampur Chini Mills Ltd. BALRAMCHIN 2400 9600
28 Bank of Baroda BANKBARODA 700 1400
29 Bank Nifty BANKNIFTY 25 50
30 Bata India Ltd. BATAINDIA 1050 4200
31 Bharat Electronics Ltd. BEL 138 552
32 Bharat Earth Movers Ltd. BEML 125 750
33 Bharat Forge Co Ltd. BHARATFORG 1000 4000
34 Bharti Airtel Ltd. BHARTIARTL 250 500
35 Bharat Heavy Electricals Ltd. BHEL 75 300
36 Bhushan Steel & Strips Ltd. BHUSANSTL 250 1000
37 Oswal Chem. & Fert. Ltd. BINDALAGRO 4950 29700
38 Biocon Ltd. BIOCON 900 3600
39 Birla Corporation Ltd. BIRLACORPN 850 3400
40 Bombay Dyeing & Mfg. Co Ltd. BOMDYEING 300 1800
41 Bongaigaon Refinery Ltd. BONGAIREFN 2250 9000
42 Bosch Limited BOSCHLTD 50 100
43 Bharat Petroleum Corporation Ltd. BPCL 550 1100
44 Bombay Rayon Fashions Ltd. BRFL 1150 2300
45 Brigade Enterprises Ltd. BRIGADE 550 5500
46 Cairn India Ltd. CAIRN 1250 2500
47 Canara Bank CANBK 800 1600
48 Central Bank of India CENTRALBK 2000 8000
49 Century Textiles Ltd. CENTURYTEX 212 1696
50 CESC Ltd. CESC 550 1100
51 Chambal Fertilizers Ltd. CHAMBLFERT 3450 6900
52 Chennai Petroleum Corporation Ltd. CHENNPETRO 900 3600
53 CMC Ltd. CMC 200 800
54 CNX 100 CNX100 50 100
55 CNX IT CNXIT 50 100
56 Container Corporation Of India Ltd. CONCOR 250 500
57 Core Projects And Technologies Ltd. COREPROTEC 750 6000
58 Corporation Bank CORPBANK 600 1200
59 Crompton Greaves Ltd. CROMPGREAV 500 2000
60 Cummins India Ltd. CUMMINSIND 475 1900
61 Develop Credit Bank Ltd. DCB 1400 14000
62 Deccan Chronicle Holdings Ltd. DCHL 1700 6800
63 Dena Bank DENABANK 2625 10500
64 Dish TV India Ltd. DISHTV 5150 20600
65 Divi's Laboratories Ltd. DIVISLAB 155 310
66 DLF Ltd. DLF 400 1600
67 Dr. Reddy's Laboratories Ltd. DRREDDY 400 800
68 Edelweiss Capital Ltd. EDELWEISS 250 1000
69 Educomp Solutions Ltd. EDUCOMP 75 150
70 Everest Kanto Cylinder Ltd. EKC 1000 2000
71 Escorts India Ltd. ESCORTS 2400 9600
72 Essar Oil Ltd. ESSAROIL 1412 2824
73 Everonn Systems India Ltd. EVERONN 400 800
74 Federal Bank Ltd. FEDERALBNK 851 1702
75 Financial Technologies (I) Ltd. FINANTECH 150 600
76 Firstsource Solutions Ltd. FSL 4750 19000
77 Gateway Distriparks Ltd. GDL 2500 5000
78 The Great Eastern Shipping Co. Ltd. GESHIP 600 2400
79 Gitanjali Gems Ltd. GITANJALI 500 4000
80 GMR Infrastructure Ltd. GMRINFRA 1250 5000
81 Gujarat Narmada Fertilizer Co. Ltd. GNFC 1475 5900
82 Grasim Industries Ltd. GRASIM 88 352
83 Gujarat State Petronet Ltd. GSPL 3050 12200
84 GTL Ltd. GTL 750 1500
85 GTL Infrastructure Ltd. GTLINFRA 4850 9700
86 Great Offshore Ltd. GTOFFSHORE 250 1000
87 Gujarat Alkalies & Chemicals Ltd. GUJALKALI 1400 5600
88 GVK Power & Infrastructure Ltd. GVKPIL 4750 19000
89 Havells India Ltd. HAVELLS 400 2400
90 Hindustan Construction Co. Ltd. HCC 1400 8400
91 HCL Infosystems Ltd. HCL-INSYS 1700 3400
92 HCL Technologies Ltd. HCLTECH 650 2600
93 Housing Development Finance Corporation Ltd. HDFC 75 150
94 HDFC Bank Ltd. HDFCBANK 200 400
95 Housing Development and Infrastructure Ltd. HDIL 516 3096
96 Hindalco Industries Ltd. HINDALCO 1759 7036
97 Hindustan Oil Exploration Ltd. HINDOILEXP 1600 6400
98 Hindustan Zinc Ltd. HINDZINC 250 1000
99 Hotel Leela Ventures Ltd. HOTELEELA 3750 15000
100 IBN18 Broadcast Ltd. IBN18 1250 2500
101 Indiabulls Real Estate Ltd. IBREALEST 650 2600
102 ICICI Bank Ltd. ICICIBANK 175 700
103 ICSA (India) Ltd. ICSA 600 2400
104 Industrial Development Bank of India Ltd. IDBI 1200 4800
105 Idea Cellular Ltd. IDEA 2700 5400
106 Infrastructure Development Finance Company Ltd. IDFC 1475 5900
107 IFCI Ltd. IFCI 1970 15760
108 Indian Hotels Co. Ltd. INDHOTEL 1899 7596
109 India Cements Ltd. INDIACEM 725 2900
110 India Infoline Ltd. INDIAINFO 1250 5000
111 Indian Bank INDIANB 1100 2200
112 Indusind Bank Ltd. INDUSINDBK 1925 7700
113 Indian Overseas Bank IOB 1475 5900
114 IRB Infrastructure Developers Ltd. IRB 1100 4400
115 Ispat Industries Ltd. ISPATIND 4150 24900
116 ITC Ltd. ITC 1125 2250
117 IVRCL Infrastructure & Projects Ltd. IVRCLINFRA 500 2000
118 IVR Prime Urban Developers Ltd. IVRPRIME 800 8000
119 The Jammu & Kashmir Bank Ltd. J&KBANK 300 1200
120 Jet Airways (India) Ltd. JETAIRWAYS 400 2400
121 Jindal Saw Ltd. JINDALSAW 250 1000
122 Jindal Steel & Power Ltd. JINDALSTEL 160 320
123 Jaiprakash Associates Ltd. JPASSOCIAT 750 4500
124 Jaiprakash Hydro-Power Ltd. JPHYDRO 3125 12500
125 JSL Ltd. JSL 1000 8000
126 JSW Steel Ltd. JSWSTEEL 275 1650
127 CNX NIFTY JUNIOR JUNIOR 25 100
128 Kesoram Industries Ltd. KESORAMIND 500 2000
129 Kingfisher Airlines Ltd. KFA 850 8500
130 Kotak Mahindra Bank Ltd. KOTAKBANK 275 1100
131 KSK Energy Ventures Limited KSK 850 1700
132 K S Oils Ltd. KSOILS 2950 5900
133 The Karnataka Bank Ltd. KTKBANK 1250 5000
134 Lakshmi Machines Ltd. LAXMIMACH 100 400
135 LIC Housing Finance Ltd. LICHSGFIN 850 1700
136 Lanco Infratech Ltd. LITL 425 2550
137 Larsen & Toubro Ltd. LT 100 400
138 Mahindra & Mahindra Ltd. M&M 312 1248
139 Mahindra Lifespace Developers Ltd. MAHLIFE 350 1400
140 Maharashtra Seamless Ltd. MAHSEAMLES 600 2400
141 Maruti Suzuki India Ltd. MARUTI 200 800
142 Matrix Laboratories Ltd. MATRIXLABS 1250 5000
143 United Spirits Ltd. MCDOWELL-N 125 250
144 Mindtree Ltd. MINDTREE 600 1200
145 Mercator Lines Ltd. MLL 2450 9800
146 Monnet Ispat Ltd. MONNETISPA 450 1800
147 Moser-Baer (I) Ltd. MOSERBAER 825 4950
148 Mphasis Ltd. MPHASIS 800 1600
149 MRF Ltd. MRF 100 200
150 Mangalore Refinery and Petrochemicals Ltd. MRPL 2225 8900
151 Mahanagar Telephone Nigam Ltd. MTNL 1600 3200
152 Nagarjuna Constrn. Co. Ltd. NAGARCONST 1000 4000
153 Nagarjuna Fertiliser & Chemicals Ltd. NAGARFERT 3500 21000
154 National Aluminium Co. Ltd. NATIONALUM 575 2300
155 Nava Bharat Ventures Ltd. NBVENTURES 800 3200
156 New Delhi Television Ltd. NDTV 550 3300
157 Network 18 Fincap Ltd. NETWORK18 500 2000
158 Neyveli Lignite Corporation Ltd. NEYVELILIG 1475 5900
159 Nifty Midcap 50 NFTYMCAP50 75 300
160 NIIT Ltd. NIITLTD 1450 8700
161 NIIT Technologies Ltd. NIITTECH 1200 4800
162 Noida Toll Bridge Company Ltd. NOIDATOLL 4100 16400
163 Oracle Financial Services Software Limited. OFSS 150 600
164 Oil & Natural Gas Corp. Ltd. ONGC 225 450
165 Opto Circuits (India) Ltd. OPTOCIRCUI 1020 4080
166 Orbit Corporation Ltd. ORBITCORP 750 6000
167 Orchid Chemicals Ltd. ORCHIDCHEM 1050 4200
168 Oriental Bank of Commerce ORIENTBANK 1200 2400
169 Pantaloon Retail (I) Ltd. PANTALOONR 850 1700
170 Parsvnath Developers Ltd. PARSVNATH 700 7000
171 Patel Engineering Ltd. PATELENG 250 2000
172 Patni Computer Systems Ltd. PATNI 650 2600
173 Peninsula Land Ltd. PENINLAND 2750 16500
174 Petronet LNG Ltd. PETRONET 2200 8800
175 Power Finance Corporation Ltd. PFC 1200 2400
176 Piramal Healthcare Ltd. PIRHEALTH 750 1500
177 Polaris Software Lab Ltd. POLARIS 2800 5600
178 Power Grid Corporation of India Ltd. POWERGRID 1925 3850
179 Praj Industries Ltd. PRAJIND 1100 4400
180 Prism Cement Ltd. PRISMCEM 5550 22200
181 PTC India Ltd. PTC 2350 4700
182 Punj Lloyd Ltd. PUNJLLOYD 750 1500
183 Puravankara Projects Ltd. PURVA 500 7000
184 Rajesh Exports Ltd. RAJESHEXPO 1650 9900
185 Ranbaxy Laboratories Ltd. RANBAXY 800 1600
186 Reliance Communications Ltd. RCOM 350 1400
187 Rural Electrification Corporation Ltd RECLTD 1950 3900
188 Reliance Capital Ltd. RELCAPITAL 138 552
189 Reliance Industries Ltd. RELIANCE 75 300
190 Reliance Infrastructure Ltd. RELINFRA 138 552
191 Reliance Industrial Infrastructure Ltd. RIIL 200 800
192 Reliance Natural Resource Ltd. RNRL 1788 7152
193 Rolta India Ltd. ROLTA 900 1800
194 Reliance Petroleum Ltd. RPL 1675 3350
195 Reliance Power Ltd. RPOWER 500 2000
196 Steel Authority of India Ltd. SAIL 1350 5400
197 Satyam Computer Services Ltd. SATYAMCOMP 600 1200
198 State Bank of India SBIN 132 264
199 Shipping Corporation of India Ltd. SCI 1200 4800
200 Sesa Goa Ltd. SESAGOA 1500 3000
201 Siemens Ltd. SIEMENS 376 1504
202 Sintex Industries Ltd. SINTEX 700 1400
203 S Kumars Nationwide Ltd. SKUMARSYNF 1900 11400
204 Sobha Developers Ltd. SOBHA 350 2800
205 SREI Infrastructure Finance Ltd. SREINTFIN 1750 7000
206 SRF Ltd. SRF 1500 3000
207 Strides Arcolab Ltd. STAR 850 3400
208 Sterlite Industries (I) Ltd. STER 219 876
209 Sterlite Technologies Ltd. STRTECH 1050 6300
210 Sun TV Network Ltd. SUNTV 1000 2000
211 Suzlon Energy Ltd. SUZLON 1000 6000
212 Syndicate Bank SYNDIBANK 1900 3800
213 Tata Chemicals Ltd. TATACHEM 675 2700
214 Tata Communications Ltd TATACOMM 525 1050
215 Tata Motors Ltd. TATAMOTORS 425 1700
216 Tata Power Co. Ltd. TATAPOWER 200 400
217 Tata Steel Ltd. TATASTEEL 382 1528
218 Tata Tea Ltd. TATATEA 275 550
219 Tata Consultancy Services Ltd. TCS 250 500
220 Tech Mahindra Ltd. TECHM 200 1200
221 Thermax Ltd. THERMAX 450 1800
222 Titan Industries Ltd. TITAN 206 412
223 Torrent Power Ltd. TORNTPOWER 1700 3400
224 Triveni Engg. & Inds. Ltd. TRIVENI 1925 7700
225 Tata Teleservices (M) Ltd. TTML 5225 10450
226 Tulip IT Services Ltd. TULIP 250 1000
227 Television Eighteen India Ltd. TV-18 850 3400
228 TVS Motor Company Ltd. TVSMOTOR 2950 11800
229 UCO Bank UCOBANK 5000 10000
230 Ultratech Cement Ltd. ULTRACEMCO 400 800
231 United Phosphorous Ltd. UNIPHOS 1400 2800
232 Unitech Ltd. UNITECH 900 9000
233 UTV Software Communications Ltd. UTVSOF 300 1200
234 Vijaya Bank VIJAYABANK 3450 6900
235 Voltamp Transformers Ltd. VOLTAMP 250 1000
236 Voltas Ltd. VOLTAS 900 5400
237 Walchandnagar Industries Ltd. WALCHANNAG 700 2800
238 Welspun Gujarat Stahl Rohren Ltd. WELGUJ 800 3200
239 Wipro Ltd. WIPRO 600 1200
240 Wockhardt Ltd. WOCKPHARMA 600 2400
241 Wire & Wireless (I) Ltd. WWIL 3150 25200
242 Yes Bank Ltd. YESBANK 1100 4400
243 Zee Entertainment Enterprises Ltd. ZEEL 700 2800

SOUND FINANCIALS

What does it mean to be financially responsible? It's a complex question with a complex answer, but at its core is a simple truth: To be financially responsible, you need to live within your means. And to live within your means, you must spend less than you make!

Credit cards and debt
Sorry - if you're really looking to be financially responsible, just being able to make your credit card payment doesn't cut it. In fact, the fact that you have a credit card payment at all and aren't able to pay your balance in full shows that you already spend more than you earn. Responsible use of a credit means paying the balance on your account in full each month.

And (this part will hurt) credit cards should be used for convenience, not to make ends meet. Credit cards are handy because they eliminate the need to carry cash - you can even generate reward points. And credit cards can be very helpful in an emergency. That said, if an emergency does force you to carry a balance on your card, living in a financially responsible manner means curbing your spending until that balance is paid off.

The same logic applies to all recurring payments that involve paying interest. Think about: Paying interest on anything means that you are spending more for that item than the purchase price. Does that sound like the most responsible choice, or just the most convenient? When the interest payments are factored in to the purchase price, you are spending more to obtain the item than even the item's manufacturer thought it was worth.

As such, avoiding paying interest on anything should be a major objective. Of course, when it comes to the cost of housing and transportation, avoiding interest is almost impossible for most of us. In such situations, minimizing the amount you spend in interest each month is the most responsible action.

Acting in your own best interest
For many people, cutting down on interest and borrowing is easier said than done, but in practice, it really comes down to knowing the difference between necessities and luxuries. For example, you might need a car, but you don't need a luxury sedan and, unless you can afford to pay for it in cash, you shouldn't be driving one.

Likewise, you might need a place to live, but you don't need a mansion. And, although most of us must have a mortgage in order to afford a home, purchasing a home in a financially responsible manner means that you should purchase one that won't break the bank.

In financial terms, this means it shouldn't cost more than two or 2.5- times your yearly income. Another healthy estimate is that your monthly mortgage payment should not cost more than 30 per cent of your monthly take-home pay.

In addition to avoiding overspending on your home purchase, you should make a down payment that is large enough to eliminate the requirement of having to pay for private mortgage insurance. If you can't afford to meet these purchasing guidelines, rent until you can afford to buy.

Paying yourself first
Spending every dime that you earn is simply irresponsible unless you have a massive trust fund that is so flush with cash that you will never outlive the earnings. For most people, especially those of us hoping to retire someday, saving is an activity that must be taken seriously.

A great way to do this is when you get your paycheck - and before you pay your bills - pay yourself first. A good goal to save is 10 per cent.

When it comes to saving, investing in the stock market might be the most profitable choice available. Sure, investing involves risk, but taking calculated risks is sometimes a necessity. The responsible way to go about it is to have a plan.

Start by examining asset allocation strategies to learn how to choose the right mix of securities for your investing strategy. From there, contribute to your employer-sponsored savings plan if such a plan is available. Most plans offer to match your contributions up to a certain percentage, so by contributing at least enough to get the match, you earn a guaranteed return on your investment.

If your finances permit, maximize your tax-deferred savings opportunities by contributing the full amount that the plan allows. After you've started investing, monitor the progress that you are making toward your goals and rebalance you portfolio as necessary to remain on track.

Emergency fund
Financial responsibility means being prepared for the unexpected. Most experts agree that you need to be able to support yourself financially for at least six months without an income. If you are married and used to living on dual incomes, this means being able to pay the necessary bills such as the mortgage, food and utilities on one income - or even neither income!

If a missed paycheck would ruin you financially, it's time to create an financial escape hatch to prevent this.

Don't worry about the neighbours
Financial responsibly means doing what you have to do to take care of your needs and the needs of your family. To make this happen, your focus should be internal. The neighbors aren't paying your bills, so their spending habits shouldn't dictate yours or set the bar for your standard of living.

Budgeting
Having a budget is one the core pillars of financial responsibility. You should know where your money is going. Business owners know the importance of understanding their cash flows and balance sheets; as a result, no successful business exists without a budget. Neither should you.

A very personal definition
Does being financially responsible mean that you have to scrimp and save? Maybe, but only if that is what it takes to live within your means. On the other hand, if you are the Sultan of Brunei, you may easily be able to afford a jet, a mega-yacht, a mansion in the South of France and a few palaces.

Although those of us with lesser means might frown on this extravagance, it shouldn't be confused with a lack of financial responsibility. After all, there's nothing irresponsible about buying things you can afford to pay for.

Arriving at 'responsible'
Ultimately, financial responsibility means living within your means, regardless of the level of those means. So take a close look at your financial situation, evaluate you earning and spending habits, and make the necessary adjustments to put yourself on responsible financial footing.

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