Investment Valuation in India

With just 10 working days for the year 2010 to complete, here is a small analysis of the sectors that have consistently outperformed the Sensex over the last 6 years. Average Yearly Return of the Sensex over from 2005 - 2010 = 29.0% [Max return in Yr 2009 - 77.3%] Sectors that have outperformed the Sensex in terms of Average Yearly Returns: Realty ........................ 98.6%  [Max return in Yr 2006 - 469.0%] (Realty Index introduced in 2006) Consumer Goods ..... 51.5%  [Max return in Yr 2007 - 114.8%] Metals ........................ 50.9%  [Max return in Yr 2009 - 220.4%] Consumer Durables .49.1%  [Max return in Yr 2005 - 110.6%] Auto ........................... 42.7%  [Max return in Yr 2009 - 200.5%] Power ........................ 35.8%  [Max return in Yr 2007 - 125.0%] Oil & Gas ................... 35.0%  [Max return in Yr 2007 - 112.8%] Banks ......................... 32.5%  [Max return in Yr 2009 - 81.0%] On a ...

Seven Major Mistakes done by Traders 1. Lack of Knowledge and No Plan It is surprising that some people expect to trade the stock market effectively without any effort. However, if they want to take up golf, for instance, they will happily take several lessons or at least read a book before heading out onto the course. The stock market is not the place for the poorly informed. Although learning what you need is easy, you just need someone to show you the way. The contradictory extreme of this is those traders who spend their life looking for the Holy Grail of trading. The fact is that there is no Holy Grail. But the excellent news is that you don't require it. Indian trading system is highly successful, easy to learn and low risk. 2. Unrealistic Expectations Many beginner traders expect to make huge money over a trading week. The stock market can be an enormous way to restore your current income and for creating wealth but it does need time. Not a lot, but of course some tim...

Futures Future contracts are agreements between two parties to buy or sell an asset (underlying) at a given point of time in the future. They are standardized contract i.e. an agreement, traded on a futures exchange, to buy or sell a standardized quantity of a specified commodity of standardized quality at a certain date in the future, at a price (the futures price) determined by the parties involved. The future date is called the delivery date or final settlement date. The official price of the futures contract at the end of a day's trading session on the exchange is called the settlement price for that day of business on the exchange. Assume that no cash settlement was done between the two parties. A futures contract gives the holder the obligation to make or take delivery under the terms of the contract. Also both parties of a futures contract must fulfill the contract on the settlement date – it is legally binding. The seller delivers the underlying asset to the buyer, or, if i...

Nothing is going good for the economy (whether India or the world). The markets are down and no one knows where it is heading. But there is one common view. The markets have bottomed out and there is little downside from here. However, no one knows when is it going to revive. The levels of 21000 seems fantasy at this point. Analysts are jobless and are considered a liability to the erstwhile employers who used to flaunt a research division not more than 4 months ago. But it is said that if there is anything that comes for free in India, it is advise. So here I am, giving free advise. I know I wont be paid foir it anyways ;-) Seven ways to tackle the bear run Stick to stocks of large companies Look for debt free companies Search for businesses that are insulated (well, relatively) from the slowdown Look for companies that largely depend on domestic revenues Search for value stocks (generally cash-rich companies) Have an investment horizon for at least 2-3 years In case of mid-cap stocks...