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Tracked by: 110 Boarders
1203
Dear BSR,
The levels you have indicated are quite possible as the smart have already finished,off loading their holdings and the weak have started the process just now,to enable the smart to re enter
Regards,
...
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by :
BullSheetRules
Dear lovemeall26,
In my BS opinion, You have explained different situations correctly.
Just for info: I am SHORT on Nifty! :)
Over a longer time frame, I expect Nifty continue to come down and stablise under 3000 level unless DOW make some kind of immediate UPTREND above 10000 level.
You may find a bit SCARY to know what kind of level I am looking for building those LT investment portfolio. :) Just to give an idea: IFCI about 12-15 level, Nagarjuna around 12-14 level, Renuka around 18-22 level.
If I do not see those counters coming to my price level target, then I will PLAY as per PLAYers PLAYing the GAME!
This is like I will invest in a new home in real estate only when a flat of 1 crore CRASH to a price of 20 lakhs first and then will see the new developments / situtations! :)
I hope that clears some BS points as far as building those LT investments are concerned!
Gud luk & happy investing! :) 
Tracked by: 110 Boarders
I expect that Sensex will surely touch 9000 till 16.10.2008 and then will start recovery. initially there may be sharp bounce and will retest this level of 9000 , there after may start establizing. Upmove not expected during 2008, however consolidation is expected in Nov & Dec in the range of 9000 -10000. the sentiments has so badly shaken that smart money will not return in the market so early.
Let us see what happens ...
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by : hindlevernet
Dear vam,
Bears have taken their toll. No serious slide in Dow
anymore. It may not fall below 7500. It touched 7883
on Friday.
Tracked by: 0 Boarder
its not that theres no effects of the global economy finacial collapse on the asian emerging, china india. clearly the vast housing, realty sectors in asia, the india economy have seen unprecedented downfall a collapse only to reveal the huge defaults in mortgage,personal loans, increase in foreclosures. the bubbles in the local india economy have only started to go bust with the signs of effects coupled with the global crises being felt with many big businesses finding difficult to be in business and many small going out of business. the various big banks only see their books filled with huge mortgage, personal corporate loans going bad and many going down. if seen the thing actually going wild in the past few years was the huge bubble growth all over the benefitting the most being the asian china, india other emerging and with the bubbles globally collapsing these economys to see unprecedented effect on the propects of many sectors actually survive any longer. ...
Tracked by: 110 Boarders
Good useful post in ur page.
regrads
shakti...
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by : vam_aru
Dear Shakti,
Yeah you are right , Even if we try to reach the level of 3800, investors will start booking profits and drag the index lower, so the consolidation activity to occur for 3 to 9 months.
for this I have posted one strategy under "Market Outlook - Medium Term", the Title is "How to play markets for 3 to 9 Months ?" , and the same has been updated in my homepage also.
Please have a look and let me know your views, your suggestions are welcome..
Tracked by: 110 Boarders
Dear BSR,
do you feel the global scenario is stabilizing or still worsening.This week will be definitely a decisive week, guided by Monday.
If the Fib Low of 10059 breaks and followed by the second support of 9892 breaks this week, no blood will be there to be shed. More than 40% of retail investors will be out of the market forever.
regards
shakti...
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by : BullSheetRules
Dear sp.palo,
I follow combination of TA, FA and Sentiments and PLAY as per the PLAYers PLAYing the GAME! :)
For me, Stock market or for that matter, any market is a GAME of Real Money!
Gud luk & happy investing! :)
Tracked by: 0 Boarder
After several years of rapid growth, 2009, will prove a testing year for India.
Inflation : Inflation continues to pose a threat. Inflation peaked at 12% in early August ‘08. Inflation, is being caused by rapid growth (demand pull factors) but, also the cost push inflation factors (rising oil prices). Hopefully, the fall in oil prices and higher interest rates will reduce inflation without causing too much of a slowdown.
Economic Growth. After reaching growth of 9.8% in 2007/08, growth is expected to slow down to 7%. This might not be a bad thing as it will avoid inflationary pressures building further. However, some worry the global credit crunch could reduce growth much more.
Global Recession and Indian Economy : It appears that Europe, Japan and the US are entering into recession. Falling house prices, crisis in the financial system, and lower confidence could lead to a sharp downturn, with the worst still to come.
Many argue, that India’s growth is not so dependent on growth in the West. However, the Indian stockmarkets have been hit by the global crisis. India’s growing service sector and manufacturing sector would be adversely impacted by a global downturn. However, I still feel that India’s economic success is not dependent on growth in the West, and at worst India’s growth rate will be less than hoped for.
The Indian government still have a target of 10% growth for 2010/11, but, I think this could prove unrealistic.
/TC/...
Tracked by: 0 Boarder
Why does IMF want to ratchet up pressure on poor?
From Mr Rick Rowden.
Sir, If the International Monetary Fund is projecting that the world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s, and that "that global growth was likely to slow to 3.9 per cent growth in 2008 and 3 per cent in 2009, sharply down from 5 per cent growth last year" ("IMF forecasts global slowdown", FT. com, October 8), then why is it still making its assistance to low-income countries conditional on the adoption of tighter fiscal and monetary policies?
As the northern markets for developing country exports begin to dry up, such policies will only make a bad situation even worse for the world`s poorest countries. ActionAid has analysed the IMF programmes for 15 countries for which the IMF has pledged scaled-up emergency assistance in response to price increases for food and fuel imports, and found that in almost every case the IMF is still calling for ratcheting down moderate inflation and deficits .
The monetarists at the IMF offer the same policy prescriptions whether times are good, neutral or bad - tighten policy and cut public spending. But if the rich countries are now seeking to soften the blows of a pending recession and protect businesses and jobs by lowering interest rates and increasing public spending, then shouldn`t developing countries be allowed to do the same?
Rick Rowden,
Senior Policy Analyst,
ActionAid International USA,
Washington, DC, US
...
In reply to:
For Monday October 13th
Posted by : sambala
India for greater IMF watch on major economies
Washington, Oct 11 (IANS) India has asked the International Monetary Fund (IMF) to refocus and strengthen its traditional surveillance and lending functions as part of efforts to resolve the global financial crisis with the spotlight on important bigger countries.”The twin crises - in the financial markets and the commodity price increases - bring to the fore the role of the Fund,” Finance Minister P. Chidambaram told the International Monetary and Financial Committee Meeting here Saturday.
Noting that the Fund’s role, particularly in the financial crisis, has been perceived as peripheral, he said it should be unambiguously tasked with the mandate of providing the global public good of financial stability.
In the absence of the minister who has cancelled his trip, his statement was read out by Reserve Bank of India governor D. Subbarao, who is now leading the Indian delegation at the World Bank-Fund meetings as also at the meeting of the Group of 20 major economies.
Suggesting that IMF may be best suited to play the role of the conductor in organising orchestrating efforts to resolve the crisis of global proportions, he said: “As a first step, the Fund’s response should be refocusing and strengthening the Fund’s traditional surveillance and lending functions.
“Exchange rates are important in the Fund’s surveillance but financial sector stability, the orderly flow of capital, and the linkages between the real economy and the financial sector are equally critical if not more important issues,” the Indian delegate said.
Urging the Fund to adopt “a more wholesome, balanced and priority-driven approach to surveillance”, he said: “I reiterate the need for greater focus on systemically important countries, since developments in such countries tend to impact all other countries, particularly smaller ones.”
Chidambaram also suggested a clear division of labour between the Fund and other international financial institutions (IFIs) avoiding overlaps in financing mandates and development of appropriate instruments that would appeal to different types of member-countries.
“The usefulness of a contingent credit line as an instrument of crisis prevention tailored for emerging market economies undertaking reforms has been well recognized and work on this aspect needs to be expedited,” he said.
“A review of the Fund’s lending function should also take note of the resource position of the Fund, he said noting that since the Eleventh Review of quotas in 1998 there has been no general increase in quotas.
“The issue of governance continues to be critical to the legitimacy, credibility and effectiveness of the Fund,” the Indian delegate said describing “continuance of the process of realignment of quotas and voice” as the most crucial issue.
India, he said, supported the proposed three-pronged process - work based on the Independent Evaluation Office (IEO) report; the recommendations expected from the Trevor Manuel Committee of Eminent Persons; and the inputs from civil society.
Tracked by: 0 Boarder
India for greater IMF watch on major economies
Washington, Oct 11 (IANS) India has asked the International Monetary Fund (IMF) to refocus and strengthen its traditional surveillance and lending functions as part of efforts to resolve the global financial crisis with the spotlight on important bigger countries.”The twin crises - in the financial markets and the commodity price increases - bring to the fore the role of the Fund,” Finance Minister P. Chidambaram told the International Monetary and Financial Committee Meeting here Saturday.
Noting that the Fund’s role, particularly in the financial crisis, has been perceived as peripheral, he said it should be unambiguously tasked with the mandate of providing the global public good of financial stability.
In the absence of the minister who has cancelled his trip, his statement was read out by Reserve Bank of India governor D. Subbarao, who is now leading the Indian delegation at the World Bank-Fund meetings as also at the meeting of the Group of 20 major economies.
Suggesting that IMF may be best suited to play the role of the conductor in organising orchestrating efforts to resolve the crisis of global proportions, he said: “As a first step, the Fund’s response should be refocusing and strengthening the Fund’s traditional surveillance and lending functions.
“Exchange rates are important in the Fund’s surveillance but financial sector stability, the orderly flow of capital, and the linkages between the real economy and the financial sector are equally critical if not more important issues,” the Indian delegate said.
Urging the Fund to adopt “a more wholesome, balanced and priority-driven approach to surveillance”, he said: “I reiterate the need for greater focus on systemically important countries, since developments in such countries tend to impact all other countries, particularly smaller ones.”
Chidambaram also suggested a clear division of labour between the Fund and other international financial institutions (IFIs) avoiding overlaps in financing mandates and development of appropriate instruments that would appeal to different types of member-countries.
“The usefulness of a contingent credit line as an instrument of crisis prevention tailored for emerging market economies undertaking reforms has been well recognized and work on this aspect needs to be expedited,” he said.
“A review of the Fund’s lending function should also take note of the resource position of the Fund, he said noting that since the Eleventh Review of quotas in 1998 there has been no general increase in quotas.
“The issue of governance continues to be critical to the legitimacy, credibility and effectiveness of the Fund,” the Indian delegate said describing “continuance of the process of realignment of quotas and voice” as the most crucial issue.
India, he said, supported the proposed three-pronged process - work based on the Independent Evaluation Office (IEO) report; the recommendations expected from the Trevor Manuel Committee of Eminent Persons; and the inputs from civil society.
...
In reply to:
For Monday October 13th
Posted by : sambala
Post-war system no longer up to the task of global finance
THE new UK Business Secretary, Peter Mandelson, argued last week that new global solutions were needed because "the machinery of global economic governance barely exists", adding: "It is time for a Bretton Woods for this century".
With war raging across the globe in July 1944, ministers from all 44 Allied nations met at the imposing Mount Washington Hotel in Bretton Woods, New Hampshire, to thrash out a set of rules that would govern world finance once Hitler was defeated.
Knowing that greater international trade would help to prevent future wars, and determined to avoid another Great Depression, the delegates signed the Bretton Woods Agreements, creating the International Monetary Fund and the World Bank.
It was a big vision, driven by grand historical figures: Winston Churchill, Franklin D Roosevelt and the British economist, John Maynard Keynes.
Currency links
The currency links in the system collapsed in the 1970s and what is left has, not surprisingly, proved ill-equipped to deal with the fiendishly complex practices of 21st-century banking that led to the current worldwide crisis.
Neither the IMF, the World Bank nor any other institution has the power to police the global financial system in a way that might have prevented the excessive risk-taking which led to the subprime mortgage crisis and, in turn, the credit crunch.
"The current system is in crisis and we have an environment where dog eats dog," said Bob McKee, of the UK economic consultancy Independent Strategy.
"Electorates will expect more regulation, and politicians will push for it."
As the world`s central bankers gather this week in Washington DC for an IMF-World Bank conference to discuss the crisis, the big question they face is whether it is time to establish a global economic "policeman" to ensure the crash of 2008 can never be repeated.
Top of the to-do list for any new or reformed body would be new rules to manage the level of risk that banks and financial institutions are allowed to take on.
Chaos
As chaos reigns in the financial markets, the issue of regulatory reform is never far from the headlines. So what might a new architecture of global economic regulation look like?
In essence, any organisation with the power to police the global economy would have to include representatives of every major country -- a United Nations of economic regulation. Robert Zoellick, president of the World Bank, identified the weakness of the current system this week when he said international organisations that excluded countries such as China, India, Brazil, Saudi Arabia, South Africa and Russia were outdated.
Gerard Lyons, a member of the International Council of the Bretton Woods Committee, a steering group for the IMF and World Bank, said: "We need to look at the current crisis and decide what banks have been doing well and what went wrong. We have an opportunity now to make changes in global banking that make sure we keep all the good bits and eradicate the bad."
Danny Gabay, a former Bank of England economist, suggested the answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS), the umbrella organisation for the committee that came up with the Basle II Accord.
"The BIS has been spot on throughout this," he said.
"The problem is that it has no teeth.
Warnings
The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so."
By Gordon Rayner
Saturday October 11 2008
Tracked by: 0 Boarder
Post-war system no longer up to the task of global finance
THE new UK Business Secretary, Peter Mandelson, argued last week that new global solutions were needed because "the machinery of global economic governance barely exists", adding: "It is time for a Bretton Woods for this century".
With war raging across the globe in July 1944, ministers from all 44 Allied nations met at the imposing Mount Washington Hotel in Bretton Woods, New Hampshire, to thrash out a set of rules that would govern world finance once Hitler was defeated.
Knowing that greater international trade would help to prevent future wars, and determined to avoid another Great Depression, the delegates signed the Bretton Woods Agreements, creating the International Monetary Fund and the World Bank.
It was a big vision, driven by grand historical figures: Winston Churchill, Franklin D Roosevelt and the British economist, John Maynard Keynes.
Currency links
The currency links in the system collapsed in the 1970s and what is left has, not surprisingly, proved ill-equipped to deal with the fiendishly complex practices of 21st-century banking that led to the current worldwide crisis.
Neither the IMF, the World Bank nor any other institution has the power to police the global financial system in a way that might have prevented the excessive risk-taking which led to the subprime mortgage crisis and, in turn, the credit crunch.
"The current system is in crisis and we have an environment where dog eats dog," said Bob McKee, of the UK economic consultancy Independent Strategy.
"Electorates will expect more regulation, and politicians will push for it."
As the world`s central bankers gather this week in Washington DC for an IMF-World Bank conference to discuss the crisis, the big question they face is whether it is time to establish a global economic "policeman" to ensure the crash of 2008 can never be repeated.
Top of the to-do list for any new or reformed body would be new rules to manage the level of risk that banks and financial institutions are allowed to take on.
Chaos
As chaos reigns in the financial markets, the issue of regulatory reform is never far from the headlines. So what might a new architecture of global economic regulation look like?
In essence, any organisation with the power to police the global economy would have to include representatives of every major country -- a United Nations of economic regulation. Robert Zoellick, president of the World Bank, identified the weakness of the current system this week when he said international organisations that excluded countries such as China, India, Brazil, Saudi Arabia, South Africa and Russia were outdated.
Gerard Lyons, a member of the International Council of the Bretton Woods Committee, a steering group for the IMF and World Bank, said: "We need to look at the current crisis and decide what banks have been doing well and what went wrong. We have an opportunity now to make changes in global banking that make sure we keep all the good bits and eradicate the bad."
Danny Gabay, a former Bank of England economist, suggested the answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS), the umbrella organisation for the committee that came up with the Basle II Accord.
"The BIS has been spot on throughout this," he said.
"The problem is that it has no teeth.
Warnings
The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so."
By Gordon Rayner
Saturday October 11 2008
...
In reply to:
For Monday October 13th
Posted by : sambala
Post-war system no longer up to the task of global finance
The current system is in crisis and we have an environment where DOG eats DOG," said Bob McKee, of the UK economic consultancy Independent Strategy.
Tracked by: 0 Boarder
Post-war system no longer up to the task of global finance
The current system is in crisis and we have an environment where DOG eats DOG," said Bob McKee, of the UK economic consultancy Independent Strategy....
In reply to:
For Monday October 13th
Posted by : sambala
Around $4,600 billion has been wiped off the value of shares worldwide this week – more than one and a half times the total amount of cash generated by the UK economy last year.
Tracked by: 110 Boarders
ok vam. I will definitely check that out.
regards
shakti...
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by : vam_aru
Dear Shakti,
Yeah you are right , Even if we try to reach the level of 3800, investors will start booking profits and drag the index lower, so the consolidation activity to occur for 3 to 9 months.
for this I have posted one strategy under "Market Outlook - Medium Term", the Title is "How to play markets for 3 to 9 Months ?" , and the same has been updated in my homepage also.
Please have a look and let me know your views, your suggestions are welcome..
Tracked by: 110 Boarders
Dear Shakti,
Yeah you are right , Even if we try to reach the level of 3800, investors will start booking profits and drag the index lower, so the consolidation activity to occur for 3 to 9 months.
for this I have posted one strategy under "Market Outlook - Medium Term", the Title is "How to play markets for 3 to 9 Months ?" , and the same has been updated in my homepage also.
Please have a look and let me know your views, your suggestions are welcome.....
In reply to:
WILL NIFTY HIT 3600 & SENSEX TOUCH 12000
Posted by : sp.palo
hai vam,
it will take months for nifty to reach 3800 levels.
shakti
Tracked by: 0 Boarder
Around $4,600 billion has been wiped off the value of shares worldwide this week – more than one and a half times the total amount of cash generated by the UK economy last year....
In reply to:
For Monday October 13th
Posted by : sambala
IMF warns of world financial system `meltdown`
The International Monetary Fund has warned that the world financial system stands on the "brink of systemic meltdown", despite international efforts to bring the crisis to an end.
By Edmund Conway in Washington
Dominique Strauss-Kahn, the IMF`s managing director, made the comments after talks with US President George W Bush and other leading finance minister in Washington as they tried to find a solution to the global financial turmoil, which has seen stock markets around the world plunge on fears of recession.
He said: "Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown."
The IMF also warned global equities could plunge by a further 20 per cent in the coming days unless governments deliver concrete action to address the crisis.
At the meeting of finance ministers from the Group of Seven leading world economies, including the UK and US, world leaders pledged to part-nationalise swathes of the global banking system as part of a drastic international plan to halt the panic gripping financial markets and prevent the crisis from descending into a global depression.
Finance ministers from the Group of Seven leading world economies, including the UK and US, said they stood ready to pump public money into banks in order to prevent them from collapse.
The agreement came as Chancellor Alistair Darling admitted that the UK was facing "turbulence the like of which we have never seen" after markets ended their worst week in history, with shares having fallen by more than a fifth on all leading stock exchanges.
The G7 presented a five-point "Plan of Action" to arrest the turmoil, including, most significantly a promise to "ensure that our banks…can raise capital from public and well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses."
It leaves the G7 – which also includes Japan, France, Italy and Canada – open to start buying bank shares with taxpayers’ cash.
US Treasury Sectretary Hank Paulson said he was preparing to use the American $700bn bail-out scheme to fund buying troubled banks’ shares. It mirrors Gordon Brown’s £50 billion bail-out of Britain’s struggling institutions unveiled earlier this week.
With investors gripped by panic, the FTSE 100 has fallen by 21 per cent this week, and yesterday alone suffered a drop of 8.9 per cent – the third biggest in history.
Despite assurances from President George W Bush, shares in Wall Street fell for an eighth successive day on Friday, while the pound and the euro slumped against other currencies.
The agreement produced last night by finance ministers in Washington is thought to represent a last-ditch attempt for governments to prevent the financial crisis from worsening yet further next week. Some experts fear that unless it succeeds in boosting confidence the financial system may collapse entirely, threatening a worse economic slump than was experienced in the 1930s.
The G7 statement, which was among the most eagerly awaited in recent history, said: "[We agree] today that the current situation calls for urgent and exceptional action."
Mr Paulson described the G7 statement as "an aggressive action plan to address the turmoil in global financial markets and the stresses on our financial institutions."
Among the five pledges was a promise to protect savers’ deposits when banks collapse.
It came after Mr Darling and Bank of England Governor Mervyn King pledged to do everything in their power to prevent economic catastrophe. On a frenzied day in financial centres across the world, Mr Darling urged his fellow ministers to "step up to the mark and do something"
Tracked by: 0 Boarder
IMF warns of world financial system `meltdown`
The International Monetary Fund has warned that the world financial system stands on the "brink of systemic meltdown", despite international efforts to bring the crisis to an end.
By Edmund Conway in Washington
Dominique Strauss-Kahn, the IMF`s managing director, made the comments after talks with US President George W Bush and other leading finance minister in Washington as they tried to find a solution to the global financial turmoil, which has seen stock markets around the world plunge on fears of recession.
He said: "Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown."
The IMF also warned global equities could plunge by a further 20 per cent in the coming days unless governments deliver concrete action to address the crisis.
At the meeting of finance ministers from the Group of Seven leading world economies, including the UK and US, world leaders pledged to part-nationalise swathes of the global banking system as part of a drastic international plan to halt the panic gripping financial markets and prevent the crisis from descending into a global depression.
Finance ministers from the Group of Seven leading world economies, including the UK and US, said they stood ready to pump public money into banks in order to prevent them from collapse.
The agreement came as Chancellor Alistair Darling admitted that the UK was facing "turbulence the like of which we have never seen" after markets ended their worst week in history, with shares having fallen by more than a fifth on all leading stock exchanges.
The G7 presented a five-point "Plan of Action" to arrest the turmoil, including, most significantly a promise to "ensure that our banks…can raise capital from public and well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses."
It leaves the G7 – which also includes Japan, France, Italy and Canada – open to start buying bank shares with taxpayers’ cash.
US Treasury Sectretary Hank Paulson said he was preparing to use the American $700bn bail-out scheme to fund buying troubled banks’ shares. It mirrors Gordon Brown’s £50 billion bail-out of Britain’s struggling institutions unveiled earlier this week.
With investors gripped by panic, the FTSE 100 has fallen by 21 per cent this week, and yesterday alone suffered a drop of 8.9 per cent – the third biggest in history.
Despite assurances from President George W Bush, shares in Wall Street fell for an eighth successive day on Friday, while the pound and the euro slumped against other currencies.
The agreement produced last night by finance ministers in Washington is thought to represent a last-ditch attempt for governments to prevent the financial crisis from worsening yet further next week. Some experts fear that unless it succeeds in boosting confidence the financial system may collapse entirely, threatening a worse economic slump than was experienced in the 1930s.
The G7 statement, which was among the most eagerly awaited in recent history, said: "[We agree] today that the current situation calls for urgent and exceptional action."
Mr Paulson described the G7 statement as "an aggressive action plan to address the turmoil in global financial markets and the stresses on our financial institutions."
Among the five pledges was a promise to protect savers’ deposits when banks collapse.
It came after Mr Darling and Bank of England Governor Mervyn King pledged to do everything in their power to prevent economic catastrophe. On a frenzied day in financial centres across the world, Mr Darling urged his fellow ministers to "step up to the mark and do something"
...
In reply to:
For Monday October 13th
Posted by : sambala
IMF warns of world financial system `meltdown`
The International Monetary Fund has warned that the world financial system stands on the
Tracked by: 0 Boarder
STRATEGY for another 3 to 9 Months.
========================================
Dear INVESTORS,
Most of the investors old or new , Have seen their portfolio eroded , Old investors staring at 30 to 40 % Minus, New investors are starring at 70 % down, Very new investors ( One who started investing week back ) starring at 10 % down.
So How one looks at the stock market now?
If some one Bought a house for 20 lakhs and give for rent it will fetch you 1500 in small city, 3000 in medium , and 10000 in Big cities.
So think of your stock market investment like house, suppose if you have a portfolio CURRENT worth say 5 lakhs, you should be looking to make atleast 5000 as a rent from these.
How this will work?
Suppose you are holding any stocks which is also trading in F & O, and if the stock is having some liquidity in options you can try this Income strategy.
For example : Let`s say you have Larsen and Toubro Invested around last October 2007,at 3000 rs ( 50 Shares )
Investment : 50 * 3000 = 150000 ( considering the bonus you have received you would be having 100 shares now ).
Current Rate : 100 * 900 = 90000 ( 60000 Miuns )
Invest another 90000 for 100 shares.
Total Investment : 2.40 Lakhs , 200 shares , your Average is 1200 rs
At any time during the month of Option Series, look to SELL 2 Lots of 1200 CA at around 25 rs .... In this way you will receive 5000 rs. ( you need to have some margin money to hold these SELL positions ).
The Idea is to gain Either make 5000 rs a month, or Get Rid of the shares above your Average price, If Larsen and Toubro is not moving to 1200 before the option expiry you can keep entire 5000 rs, If it reaching 1200 at expiry, any way you will not having much loss, you will get your entire investment back.
Suppose in the first month It`s not reaching 1200, But it had reached 1050, Then your average logically is 1175 rs, and you can look to SELL 1300 CA for 25 rs any time during the Option Month.
In this way you can constantly reduce your Average price, and be still be able to gain 5000 rs as Monthly rental for 2.4 Lakhs you have invested.
PS: Choose the shares which has some liquidity in options, and also if you can make your average nearer to current rate it`s better. Your idea is to either come out with out losses or receive rentals...
Those who would like to keep the shares for very long term should play this strategy carefully, because if you choose the strike rate and if there is some surge up and your strike price reached you have to give your shares, as your price is capped when you sell the options.
Queries are welcome...
...
