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Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
Stockmarket For Dummies
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Stockmarket For Dummies

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Stock Market for Dummies

Stock Market for Dummies

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  • 1. Stock Market For Dummies (Me and You!)
  • 2. What is stock market? <ul><li>Why are you telling me all this?
  • 3. Why its important to me?(assets and earnings)
  • 4. Debt v/s Equity – Difference between Debt and Equity financing
  • 5. IPO – Initial Public Offer
  • 6. Risk – Risk of being an owner - Dividends
  • 7. Common v/s Preferred Stocks – Preferred Stock between Bond and Common
  • 8. Different classes of Stock – Class A and Class B – Voting rights – Steve Jobs – Mark Zuckerberg – Laxmi Mittal </li></ul>`
  • 9. Authorities
  • 10. How stocks trade
  • 11. <ul><li>Farmer's market
  • 12. Buyers and sellers meet
  • 13. Primary and Secondary Market
  • 14. Primary Market – IPO
  • 15. Secondary Market – No control of company what so ever
  • 16. Bombay Stock Exchange and National Stock Exchange
  • 17. Over the counter exchange – Trading floor and Virtual Trading </li></ul>
  • 18. SENSEX
  • 19. <ul><li>BSE SENSEX – 30
  • 20. Started 1 January 1986
  • 21. Consists of 30 company across different sectors
  • 22. Nerve of the economy
  • 23. The index is calculated based on a free float capitalization method—a variation of the market capitalization method.
  • 24. The base value of the SENSEX is taken as 100 on April 1, 1979, and its base year as 1978-79.
  • 25. share price times the number of shares outstanding
  • 26. Index divisor – magic number </li></ul>
  • 27. NIFTY <ul><li>Same Index covers 50 companies across 22 sectors
  • 28. The base period for the S&P CNX Nifty index is November 3, 1995
  • 29. The base value of the index has been set at 1000, and a base capital of Rs 2.06 trillion
  • 30. Nifty Index was developed by Ajay Shah and Susan Thomas.
  • 31. Total return on Sensex and Nifty is around 20% </li></ul>
  • 32. <ul><li>Depository
  • 33. A bank or company which holds funds or securities deposited by others, and where exchanges of these securities take place.
  • 34. NSDL – National Security Depository Limited
  • 35. CDSL – Central Depository Services Limited
  • 36. Depository Participant – Intermediaries between depository and investors
  • 37. SEBI – Security and Exchange Board of India – Regulator of securities market in India
  • 38. What all needed? Trading account, demat account and of course MONEY! </li></ul>
  • 39. Rules of making money!
  • 40. <ul><li>Rule No 1 : Never lose money in stock market
  • 41. Rule No 2 : Never forget rule no 1 </li></ul>
  • 42. Factors affecting stock market <ul><li>Economic Factors
  • 43. Market trends and rumors
  • 44. Global market indicators
  • 45. Govt policies and regulations
  • 46. Company or sector wide factors </li></ul>
  • 47. <ul><li>Capitalization – Large Cap, Mid Cap and Small Cap
  • 48. Groups – A, B and Z
  • 49. Circuit – Control mechanism
  • 50. Kinds of trade – Intra day and Delivery
  • 51. Short selling and Short covering </li></ul>
  • 52. The Bear The Bull and Farm
  • 53. Picking up the right stock!
  • 54. <ul>Fundamental Analysis </ul><ul><li>Analyzing stocks on the basis of country, sector or individually
  • 55. Includes going through the balance sheet of the company and P/L statement and checking various ratios
  • 56. EPS = Net Earnings / Outstanding Shares
  • 57. Trailing, Current and Forward EPS
  • 58. P/E = Stock Price / EPS
  • 59. High P/E -> Overpriced stock (Not always!)
  • 60. Indicator of market sentiment towards the stock </li></ul>
  • 61. <ul><li>PEG (Price to Future Growth ratio)
  • 62. PEG = (P/E)/ (projected growth in earnings)
  • 63. Technically Lower the better
  • 64. Compare it to P/E
  • 65. This is projected ratio, not always accurate!
  • 66. Interest coverage ratio
  • 67. IC = EBIT/ Interest expense
  • 68. Below 1.5 = signs of trouble times! </li></ul>
  • 69. <ul><li>Debt/Equity Ratio
  • 70. D/E = Total Liabilities / Shareholders Equity
  • 71. Sector based, Auto manufacturing -> High
  • 72. IT companies -> Low
  • 73. Check the competitor or top 5 sector based ratios when considering this </li></ul>
  • 74. Technical Analysis <ul><li>Support
  • 75. Resistance
  • 76. Depends on past prices and volumes of stock traded.
  • 77. All about reading the graphs
  • 78. Out of the reach for this presentation </li></ul>
  • 79. Hedging and Speculation <ul><li>Hedging means insuring against a negative event
  • 80. It is done to reduce exposure to various risks
  • 81. Hedgers try covering the risks
  • 82. Hedgers try to reduce the risks associated with uncertainty
  • 83. Speculation is opposite of hedging
  • 84. Speculators are risk lovers
  • 85. Speculators make bets or guesses
  • 86. A hedger seeks to cover a foreign exchange risk
  • 87. A speculator accepts and seeks out to accept it to make profit </li></ul>
  • 88.  
  • 89. <ul><li>Never risk more than 10% of your trading capital in a single trade.
  • 90. Never do overtrading.
  • 91. Don't enter a trade if you are unsure of the trend.
  • 92. When in doubt, get out, and don't get in when in doubt.
  • 93. Distribute your risks equally among different markets.
  • 94. Avoid taking small profits and large losses.
  • 95. Be willing to make money from both sides of the market.
  • 96. Never change your position without a good reason.
  • 97. Don't follow a blind man's advice.
  • 98. When you lose don't blame it on luck. </li></ul>
  • 99. <ul><li>A well diversified portfolio
  • 100. Investment in good shares
  • 101. Lot of patience </li></ul>
  • 102.  

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