Why people come to stock markets?

Stock markets exists since centuries.. it's people and their want of money, the real life line of stock markets.

There has been lots of success stories around these markets which inspire people to join the game. Yes, failures in markets have been eroding the hard earned money but at the end of the day, its the hope, passion and sheer want of quick money that brings people back to markets!

At any given instance, there are two people involved in trade. A lay man may think that only one will win. But in markets, both can be a winner or loser. How is this possible? It is possible because the value of time is always factored in any trade. That is, if a trader had bought XYZ stock/stock options at 100 two days ago & if he is selling today to another trader at 102, he is making 2% profit, while the other trader may sell it at further 102.5 the same day making half a percent gain.. so who lost in this trade.. nobody.. If the situation had been opposite, both would be losers!

So one has to understand at what point of time he/she is entering the game and should also have an exit strategy with a time horizon.

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Suppose You Bought Wipro 100 share value Rs. 100 in 1980

1981 ,1:1 Bonus =200 shares

1985,1:1 Bonus =400 shares

1986 split to  Rs 10 =4000 shares

1987,1 :1 Bonus =8000

1989, 1:1 Bonus =16000

1992 ,1:1 Bonus =32000

1995 ,1:1 Bonus =64000

1997 ,2:1 Bonus =1,92,000

1999 Split to Rs 2 =9,60,000

2004 2:1 Bonus =28,80,000

2005 1:1 Bonus =57,60,000

2010 3:2 Bonus =96,00,000

Today’s Rate  Rs 431

You Earn Rs 413 Crore !!

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Wealth Creators and destroyers in Indian Stock Market

DO YOU KNOW ! ! !

Rs.10,000 Invested in INFOSYS in 1993 is worth Rs.1.25 Cr.

Rs.10,000 Invested Dr REDDY in 1990 is worth Rs.36 Lakhs.

Rs.10,000 Invested in CIPLA in 1990 is worth Rs.31 Lakhs.
Rs.10,000 Invested in HEROHONDA in 1985 is worth Rs.21 Lakhs.

Rs.10,000 Invested in RELIANCE in 1984 is worth Rs.6.5 Lakhs.

Rs.10,000 Invested in SUNPHARMA in 1994 is worth Rs.6 Lakhs.

YOU SHOULD ALSO KNOW THE OTHER SIDE...

PENTAMEDIA has crashed from Rs.2,344 on 23-02-2000 to Rs.7 
 SILVERLINE has crashed form Rs.1,395 on 22-02-2000 to Rs.32

HIMACHAL has crashed from Rs.2,552.90 on 08-03-2000 to Rs.20

DSQ Software has crashed from Rs.2,820 on 10-03-2000 to Rs.6

Note : As per closing rates of 17-04-2008, without considering dividends.

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THE LEADERS

The Living Legend: Warren Buffet 

Warren Edward Buffett (born August 30, 1930) is an American business magnate, investor, and philanthropist. He is widely considered the most successful investor of the 20th century. Buffett is the chairman, CEO and largest shareholder of Berkshire Hathaway and consistently ranked among the world's wealthiest people.
In 1999, Buffett was named the top money manager of the Twentieth Century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton. In 2007, he was listed among Time's 100 Most Influential People in the world. In 2011, President Barack Obama awarded him the Presidential Medal of Freedom. Most recently, Buffett, along with Bill Gates, was named the most influential global thinker in Foreign Policy's 2010 report.
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 The Man Who Broke the Bank of England: George Soros 

George Soros, Hungarian; born August 12, 1930, as Schwartz György is a Hungarian-born American business magnate, investor, and philanthropist. He is the chairman of Soros Fund Management. He is known as "The Man Who Broke the Bank of England" because of his US$1 billion in investment profits during the 1992 Black Wednesday UK currency crisis.

In August 2010, Soros bought a 4% stake in the Bombay Stock Exchange (BSE) for about $35 million. In July 2011, Soros announced that he had returned funds from outside investors' money (valued at $1 billion) and instead invested funds from his $24.5 billion family fortune due to U.S. Securities and Exchange Commission disclosure rules.
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Here are some of the heroes of the Indian stock market, one can gain inspiration from them: 

Indian Warren Buffet: Mr. RJ 

Rakesh Jhunjhunwala (born 5 July 1960) is an Indian investor and trader. He is a qualified Chartered accountant. He manages his own portfolio as a partner in his asset management firm, Rare Enterprises. Jhunjhunwala was described by India Today magazine as the "pin-up boy of the current bull run" and by Economic Times as "Pied Piper of Indian bourses"

Rakesh Jhunjhunwala plunged into full-time investing soon after completing his education. He started his career in 1985 when the BSE Sensex was at 150. He made his first big profit of Rs 0.5 million in 1986 when he sold 5,000 shares of Tata Tea at a price of Rs 143 which he had purchased for Rs 43 a share just 3 months prior. Between 1986 and 1989 he earned Rs 20-25 lakhs. His first major successful bet was iron mining company Sesa Goa(now Sesa Sterlite). He bought 4 lakh shares of Sesa Goa in forward trading, worth Rs 1 crore and sold about 2-2.5 lakh shares at Rs 60-65 and another 1 lakh at Rs 150-175. The price rose to Rs 2200 and he sold some shares.
He credits Madhu Dandavate's Union budget of 1990 as the inflection point for his investing career which quintupled his net worth. Jhunjhunwala said, "Radha Kishan Damani is my guru”.
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The New Hero: Pulak Prasad

 

Pulak Chandan Prasad, the founder of Nalanda Capital Pte Ltd, is the man with the golden touch. He is 45 years of age and has rich experience in identifying winning companies. He did his MBA from IIM Ahmedabad in 1992 and joined McKinsey.

Thereafter, in 1998, he joined Warburg Pincus where he learnt the ropes of equity investing. He is credited with several investments (such as Kotak Mahindra Bank, Sintex Industries, Nicholas Piramal India, Satyam Computer Services) which gave Warburg Pincus multibagger returns. He is best known for the $300 million investment that Warburg made in Bharati Airtel which was sold for $1.9 billion.

In May 2007, Pulak Chandan Prasad decided to strike it on his own and started Nalanda Capital for making investments in India. Thanks to his McKinsey & Warburg Pincus pedigree, he had no problem attracting investors who pumped in $400 Million. He raised another $475m in April 2011. Fortunately, he has lived up to the promise and has had an incredible track record of finding multibagger stocks and enriched Nalanda’s investors.

NALANDA CAPITAL’S SECRET FORMULA FOR FINDING WINNING STOCKS

- Invest only in top quality stocks with high ROE, good business model and ethical management;

- Invest only after thorough research into all pros and cons. Never invest on an impulse;

- Diversify into different sectors to avoid risk;

- Prefer Mid-Cap and Small-Cap Stocks instead of Large-Cap stocks;

- Have a concentrated portfolio of a few stocks that you can watch carefully;

- Invest for the long-term. The minimum holding period is 5 years;

- Avoid Banks & Financial Stocks.