Intricacies of investment in corporate securities b.v.raghunandan

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Intricacies of investment in corporate securities b.v.raghunandan

  1. 1. Intricacies of Investment in Corporate Securities<br />Investor Awareness Week,<br />ICWAI, Grace Towers, Mangalore.<br />February 12, 2011<br />
  2. 2. Equity Shares: Nature<br />Equity shares of listed companies<br />Ready Market<br />Long-term Investment<br />Meant for Seasoned Investors<br />Study of Companies<br />Involves procedures<br />
  3. 3. King of Investment<br />Dividend: Interim, Final and Special<br />Bonus Shares<br />Market Value<br />Stock-Split<br />Buy-back<br />Rights Issue<br />Sponsored Issue<br />Strategic Value<br />
  4. 4. Qualities Needed<br />Control on Emotions<br />Building up Rome<br />Going against Current<br />Understanding Market & Companies<br />Disbelief in market sentiments<br />Impact of Economic Events<br />Mistrust the Obvious<br />Total Faith<br />
  5. 5. Current Scenario: Problems<br />Inflation<br />Scams<br />Swiss Bank Accounts<br />Political Impasse<br />Budget Blues<br />Infrastructure Slowdown<br />Reliance Conflict<br />Poor Market Sentiments<br />
  6. 6. Getting Started……….<br />-opening a bank account<br />-opening a demat account<br />-opening a trading account<br />-selection of sector<br />-selection of Companies<br />-timing of purchase<br />-timing of exit, if unavoidable <br />
  7. 7. Selection of Sector<br />High Growth Sector: IT, Telecom, Pharmaceuticals, Automobiles, Auto-ancillaries, Financial Services<br />Stable Industries: FMCG, Agro-inputs, Steel, Cement, Metals, Banks<br />Sunrise Industries: Nuclear Power, Cooling Tower Construction, Railway Wagons and Locomotives, Infrastructure, Power, Ship-building<br />
  8. 8. Selection of Companies<br />Consistently good performance<br />Efficient management<br />Rewarding shareholders<br />Acquisition spree<br />Professional management<br />High level of skills in project execution<br />Lobbying skill<br />Decent governance<br />
  9. 9. Factors to be Considered<br />Price-Earning Ratio<br />Dividend rates<br />Earning per share<br />Growth in sales<br />Auditors Report<br />Avoiding hype<br />Diversification<br />Footprints<br />
  10. 10. Sectors to be Avoided <br />Highly seasonal<br />High operating and huge investment<br />Requiring huge size real estate in city centers <br />Constant demand for higher level of funding<br />Acute competition <br />
  11. 11. Companies to be Avoided<br />Trading in its shares through investment trusts<br />Controversial management<br />Poor quality of accounting<br />Products of social resistance<br />Very long gestation period<br />Brokers’ favourites<br />
  12. 12. Ignorable Factors<br />Technical Analysis<br />Samples of Data<br />Target and Stop-Loss<br />Media analysis<br />Market expectation<br />Opinions of experts<br />Suggestions of fund managers<br />
  13. 13. Timing of Purchase & Sale<br />Seasonality of market- year, week, derivative settlements<br />Going counter-market and counter-sentiment<br />Keep investible cash reserves<br />Look for market mistakes<br />Avoid euphoric moments<br />No emotional purchase or sale<br />
  14. 14. Avoidable Things<br />Borrowing and Investing<br />Investing Retirement Benefits<br />Temporary Investments<br />Distress Sale<br />Frenzied Buying<br />Betting on a single sector<br />Investing only in Growth Companies<br />Investing only in shares<br />Buying in Heated Market<br />Selling in Depressed Market<br />
  15. 15. Wise Investor<br />Shares Information <br />Transparency<br />Unaffected by market movements<br />Unwavering loyalty (staying invested)<br />Designs his own investment objectives<br />Avoids derivatives trading<br />Avoids small and temporary opportunities<br />
  16. 16. THANK YOU<br />

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