Better Safe than Sorry

Better Safe than Sorry... is not a Mantra, its a tool for smart investment opportunities.

Let's understand why in an economy like India it will work.

Investors are always confused to invest in Stocks/Mutual fund, or bank fixed deposit/bond etc etc.
Especially when interest rates fall, shares tend to move in opposite direction. In India shares prices have fallen with the Sensex at a near 13 month low and interest rates have followed. A year back it was easy to get an interest rate of 9.25 per cent on a deposit at State Bank of India. Today, the maximum interest rate that one can get is 8 per cent. Clearly, in the last one year interest rates and share prices have fallen. In fact, even gold has fallen in the last one year.

Choosing between shares and fixed deposits?

The question now is: If both are falling where to put money. In 2015, the Sensex has thus far given negative returns. On Jan 1, 2015, the Sensex closed at 27,507 points. We are nearly 2000 points below those levels at Thursday's close of 25,622 points. Many analysts see the Sensex EPS at around 1450 for the financial year 2015-16. This translates into a price to earnings ratio of around 17.6 times one year forward earnings. This makes Sensex valuations at long term averages, which means it is fairly valued at current levels. So, after a nearly 14 per cent fall on the Sensex from the highs of 30,000 points in March, the markets are still not a screaming buy. Hence, if you think that after the fall you should be buying shares at these levels, you could certainly nibble selectively as the valuations are fair. Selective purchases can be done and if there is a further reaction in stocks of around 5-10 per cent, it would be an excellent opportunity to buy into blue chip stocks like ICICI Bank and Tata Motors. If you have fixed deposits which have been placed almost a year back at interest rates of 9.25 per cent and more for the longer term, it would be unwise to break them and put money in shares, since these have been locked at high interest rates. If you want to buy shares you can start nibbling selectively and in case the market falls lower from here, you can keep buying stocks at lower levels and averaging your costs. Please do not buy shares in large quantities until the US Fed meeting ends on Sept 17. This would give you a clear indication on where interest rates are headed in the US. If there is a hike in interest rates in the US on Sept 17, you could see massive sell-off in Indian markets. This would give you an ideal opportunity to buy into shares. For the time being just hold onto cash for at least a week.

Confidence v/s Will Power

The Only reason I am uploading this piece so soon in our season; is because this is the key to everything you do ...not only in market but in real life as well.

Since last few months working with few FII and fund managers; i have got a chance to learn something more in-depth and come to "in terms" with this ideology

There are three types of confidence:

•  False/Imaginary Confidence

• Temporary/On-Off Confidence

• True Confidence

False confidence —  This type of person will talk big and poses like a big shot. he often takes big risks in an effort to either impress others or to message their own ego and discomfort, and the outcome is terrible sometimes as it leads to busting there trading account.

Temporary confidence — Which is conditional on recent performance. This type of person's self-esteem is tied to their account equity or P&L.  When they are in a good run, they feel confident and like to take larger risks (often the prelude to giving it all back). And when performance is lousy they start grasping at anything, maybe exiting winners prematurely or taking on excessive risk to get their money back.

 True confidence — This is confidence that does not depend on recent results. It is based on a deep sense of inner trust.This is the person who has a history of doing the right thing, regardless of the outcome. Doing the right thing in the sense that they act in their own best interest and trust and understand that doing so over time has a positive impact on results.  The trust runs deep enough to provide resilience in the face of disappointment.  This is true self-confidence, the kind you want in trading and in life.

In my many years of experience and learning from it, I’ve discovered confidence is a major part of the foundation for discipline.

Why is self-trust and resilience in the face of disappointment the  foundation for discipline? 

Disappointment in trading, in it’s myriad of  manifestations – missing out, leaving big money on the table,  taking a loss, etc – is inevitable for even the best traders. It’s an elemental fact that traders who  understand this, internalize it, and make it a part of their trading strategy are the most successful.

 Almost everyone says that discipline is a requirement to succeed in trading. But most people never talk about  what really underlies  discipline. And now you know.

 Are you surprised it’s not will-power? Will-power is not sustainable, it also results in fatigue by significantly reducing glucose (blood sugar levels).

In fact, empirical research shows that extended use of will-power results in cognitive fatigue and lower glucose levels. And cognitive or mental fatigue is dangerous for a trader, it makes us susceptible to making the kind of mistakes we regret later.

 Now that you know that will-power is not enough, do you want to develop the necessary ingredients for discipline?

Stay tuned for next post with market update and insight.

WELCOME BACK FOLKS !!!

Hello Everyone!!!!!

Welcome Back Friends....we have lot of new exiting things this season.

WHAT -  The purpose of restarting this blog is to identify analysis and evaluate the role of knowledge in financial market based on heuriskein method with excel based arithmetical progression within a given time frame, probability of various permutations & combinations;  also known as heuristics algorithms or as modern science would name it AI "Artificial Intelligence"

WHEN / WHY - As you know today among-st the top groups of TV channels aired today most of then would be related to financial market. An industry that has more then 7+ channels dedicated 24 * 7 to share and express views of experts on global market outlook as well as local... just imagine the media info floating everywhere & anywhere ... day in and day out.

WHERE - More than 5000 Registered Brokers, 5 Lac Sub-Broker, 50 Lac Sub Dealers ... Contributing more than 27% of National Employment…Indian Financial Market is the 2nd largest with regards to monthly volume in Trillions of dollars… HR department in any (global & local = glocal) ... GLO-CAL Financial Market have always stressed on the importance of getting investors with not only the right book knowledge but also people who fit into the advisory criteria for appreciation of your portfolio.

HOW - Now just comprehend how advisable it is to gain adequate knowledge before start trading and investing especially insights to analyze key info and evaluate day trading behavior, and provide recommendations in order to improve it. This Blog will also reveal the importance of the direct relation between goals and investments. In order to gain a strategic profit making system in our case AI and exercise the strategic goals of investing, the day trading objectives should be directly aligned and followed with simple and realistic follow ups on timely basis as well....... need for AI is at its prime and will be part of necessity in near future to come.  

The mission and vision statements into one statement called “Our Future” working hand in hand and aligned with profit making objectives is the bottom line for this BLOG!!!