Excerpts from the Preface: Q. How do you make a small fortune in the stock market? A. Start with a large one. A prime example of the Indian stock market’s potential is Infosys. If you subscribed to 100 shares of Infosys at its 1993 IPO at a price of INR 95 per share, you would own 1,02,400 shares of the company today. At an average price of INR 700 per share, that investment would now be worth over INR 7 Crores! Introduction: Taxmann’s Stock Market Wisdom highlights the great potential of the stock market while guiding investors to invest wisely and how to avoid its pitfalls. It is an attempt to assist investors to understand the following: · How the market system operates? · How one should invest money in it? · How one can generate wealth through it over the long term. The author has also explained how the markets have evolved, what their present stage is, where they’re headed, and, of course, how you can benefit, with the help of multiple case studies. · Featuring the following case-studies: o India’s Top 25 Years Return Chart o World stock exchange performance o The Roller Coaster Journey of the SENSEX from 100 to 41,000 o Amazing story of Reliance Industries – The first Indian company to enter the 10 Trillion Market Cap Club o Avenue Supermarts Ltd. – The company that defies gravity

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3. Stock markets around the world have been the largest wealth creators in the last
century. International companies like Apple, Google, Microsoft, and Facebook
have generated hundreds of billions of dollars in wealth in recent decades. Even
in India, companies like Infosys, HDFC, and Kotak Mahindra Bank have created
numerous multimillionaires. A prime example of the Indian stock market’s
potential is Infosys. If you subscribed to 100 shares of Infosys at its 1993 IPO
price of ` 95 per share, you would own 102,400 shares of the company today. At
an average price of ` 700 per share, that investment would now be worth over
` 7 cr.
Despite these success stories, many in India remain sceptical about shares and
stock markets, sometimes out of ignorance but also as a result of ill-advised
approaches. This book is a humble attempt to highlight, to the ordinary investor,
the great potential of the stock market while guiding him to invest wisely and
avoid its pitfalls.
Some investors and traders routinely make millions and sometimes billions on
the stock market. Others routinely lose similar amounts. In common parlance,
one hears more stories of wealth created than of fortunes lost, but the truth
is that there are nearly equal numbers of winners and losers. Horror (failure)
stories are rarely discussed in public because, as the saying goes, “Success has
many fathers, failure is an orphan”.
Does the stock market create wealth or destroy it? The immediate answer, from
an average investor, is that the market is a dangerous place. News accounts
of stock market crashes, scams by fraudsters, the Satyam Computer episode,
market volatility, and the global financial crisis of 2008 have frightened investors
to such an extent that many sincerely believe that the stock market is unsuitable
for normal people. In India, negative publicity about the stock market created
so much panic even amongst educated and knowledgeable people that the
Employees Provident Fund (EPF) Trustees refused to invest so much as 5% of their
I-9
Preface

4. corpus in the market, despite the government encouraging them to do so for a
long time. (Luckily, on 6 August 2015, the EPF Trustees decided to test the market
by investing in ETFs issued by SBI Mutual Fund, up to an amount of 5% of the
incremental contribution coming to the fund.)
The negative sentiment is reflected in a common market-related joke.
Q. How do you make a small fortune in the stock market?
A. Start with a large one.
The joke’s underlying sarcasm reflects a common sentiment. There are investors
who tell their brokers not to reveal their visits to the broker’s office if their wives
call.
The number of investors in India, as revealed by depository figures, is about 40
million, equal to about 3% of the population. In other countries the percentage
of market participants is much larger—over 10% in many other developing
countries and over 20% in the developed economies. The incredibly low number
in India becomes even more telling when one considers that the country has
close to a billion mobile connections. The ordinary person is ignorant of, or
indifferent to, the stock market, yet captivated by unproductive assets such as
cell phones, gold, jewellery, and land. This pattern may help explain why India
remains underdeveloped despite having some of the best minds and most
entrepreneurial workers in the world.
What, then, are the facts? The truth is that the stock market has created real
wealth far in excess of any other form of organized investment. If you take the
investment return figures for the Indian investors’ preferred asset classes—
real estate, gold, and bank deposits—and compare them with stock market
returns, stocks outperform them all (See Annexure 1 for full information) by a
substantial margin. India’s best-known market index, the Sensex, has delivered a
compounded annual rate of return of around 16% for the 40 years since 1978–
1979 (when the index was constituted with a base of 100 points).
Yet the names most often associated with the Indian stock market are of
miscreants who took investors for a ride or manipulated the system to their
personal advantage—people like Harshad Mehta, who engineered the big
boom of 1990s, and Ketan Parekh, who piloted the market boom of 2001.
These operators manipulated the market in different ways, but in both cases
the market crashed when the scams were exposed. In both instances, investors
had entered in large numbers after seeing the market rocket upwards, but
many did not know the fundamentals or realities of investing in stock. When
the duplicitous activities were exposed, investors lost not only huge sums but
also faith. Not surprisingly, the public is less aware of successful investors and
PREFACE I-10

5. wealth creators such as Warren Buffett and Peter Lynch in the West and Rakesh
Jhunjhunwala and Basant Maheswari in India.
Most people are scared of investing in the market, but the reasons for this
are varied. Some are ignorant of how the market system operates; others
have invested rashly or thoughtlessly and lost money; still others do not heed
warnings from those around them. But in these days of high inflation and
shrinking investment opportunities, the risk is not to invest in the market but
to avoid it. The runaway increase in gold prices early in the decade withered,
although gold is showing signs of life again lately. Real estate prices have
stagnated for various reasons, including the fight against black money. This book
is a humble attempt to assist investors to understand how the market system
operates, how one should invest money in it, and how one can generate wealth
through it over the long term.
To be successful, stock market investment must be careful and disciplined.
Wealth in the market is created only over the medium to long term. Anyone
who wants quick money is likely to lose. Patience is key, but most investors and
traders lack it.
Planned and systematic investment, based on up-to-date information on market
and macro-economic developments, is likely to yield substantial returns over
time. A healthy and robust stock market plays a pivotal role in any country’s
economic development. In the following pages, you will read numerous
examples of huge multi bagger returns that investors earned by virtue of their
patience and understanding of market dynamics. The Indian Government also
supports stock market investors by offering substantial fiscal benefits, like partial
exemption from income tax on profits made on stock sales after one year of
investment. (See separate chapter on this.)
Obviously, you have an interest in the market, as you have taken the trouble
of picking up this book. Let me now take you on the exciting journey into stock
market investment. I will tell you how the markets have evolved, what their
present stage is, where they’re headed, and, of course, how you can benefit.
Fasten your seat belts and prepare for take-off.
Happy investing.
T.S. ANANTHARAMAN
November, 2020
I-11 PREFACE

6. Author’s Note
1. Stocksdiscussed in thebook areillustrativeand foracademicpurposes only.
They should not be taken as recommendations. Before initiating any action
on any stock/sector, kindly consult your financial advisor.
2. While care has been taken to update information to the extent possible up
untilJanuary2020,figureschangeeveryquarter.Beforeusinganyinformation
for analysis, please ensure you have the latest data from the right sources.
3. Comments on the performance of companies/sectors/individuals, etc.,
are given only to highlight certain viewpoints. The author has no intention
whatsoever of passing judgment on the involved parties or denigrating
them even indirectly.
4. Thestockmarketisadynamicfield.Viewsandopinionskeepchangingbased
onnewdevelopmentsbothinsideandoutsidethecountry.Keepthisinmind
when making any decisions.
5. The author has no gender preference. Wherever male names are used, one
mayapplyfemalenamesaswellandviceversa.Withcertainanecdotesfrom
the author’s own experience, fictitious names have been used to protect
the privacy of the individuals concerned.
6. It is possible that unintended mistakes have crept in while data was being
compiled and summarized. The author would appreciate suggestions for
improvement.
7. The author is an investor and a regular participant in the stock markets, and
consequently may have held, or may be currently holding, positions in some
of the stocks discussed in this book.
8. This book was completed before the COVID-19 pandemic hit the world. The
virus has affected the whole world, both developed and developing, in an
unprecedentedmanner,wreakinghavoconlivesandlivelihoods.TheIndian
stock markets crashed by 40% in the matter of few weeks during early 2020
(from 42,274 to 25639 in Sensex and from 12430 to 7511 in Nifty). Thanks
to concerted action by most central banks and governments and injection
of more than $10 trillion into the world financial system, markets have not
only recovered from the crash, but (at the time of going to the press) have
crossed the all-time highs in most of the countries, including India. This
proves the resilience of stock markets in the medium- to long-term and the
importance of keeping invested even during troubled times as detailed in
various chapters of the book.
PREFACE I-12

7. I-19
PART ONE
INVESTING WISDOM
1
WHY YOU SHOULD INVEST IN THE
INDIAN STOCK MARKETS
1.1 Introduction 3
2
EVOLUTION OF THE STOCK MARKET IN INDIA
2.1 Early days 6
2.2 Origin of sensex 7
2.3 Stages of development 7
2.4 Technology takeover 10
2.5 Tech boom and bust 10
2.6 Introduction of derivatives 10
2.7 Eclipse of regional SEs 11
PAGE
Foreword I-5
About the Author I-7
Preface I-9
Acknowledgements I-13
Chapter-heads I-15
Contents

8. 2.8 Markets today 11
2.9 Conclusion 12
3
MARKET AND INVESTOR BEHAVIOUR
3.1 Introduction 13
3.2 Lesson from history 13
3.3 Solution to the problem-stick to basics 16
3.4 Conclusion 17
4
RIGHT NUMBER OF STOCKS IN YOUR PORTFOLIO
4.1 Introduction 18
4.2 Market pundits’ portfolios 18
4.3 Basic parameters 19
4.4 Conclusion 20
5
INVEST IN WINNERS, DO NOT CHASE LOSERS
5.1 Introduction 21
5.2 Wrong booking of profits/losses 21
5.3 Avoid sentiments in investing 22
5.4 When to get out of a losing stock 22
5.5 Cost averaging 23
5.6 Avoid booking small profits 24
5.7 Conclusion 24
6
BUY IT, HOLD IT, FORGET IT STRATEGY
6.1 Introduction 25
6.2 The strategy 25
PAGE
CONTENTS I-20

9. 6.3 Relevance of the strategy today 28
6.4 Conclusion 30
7
LOW PE vs. HIGH PE WHICH ONE TO BUY?
7.1 Introduction 31
7.2 Low PE multiple is obvious choice 31
7.3 Why buy high PE share? 31
7.4 An example: Bajaj Auto, Hero Motocorp. and Tata Motors
vs. Eicher Motors 32
7.5 Relevance of PE multiple 33
7.6 Conclusion 33
8
SMALL vs. LARGE COMPANIES
8.1 Introduction 34
8.2 Market view of small vs. large companies 34
8.3 How to invest in small-cap companies 35
8.4 Case study: Multibagger returns in small cap 37
8.5 Conclusion: Ideal - A mixed portfolio 37
9
BENEFIT FROM BEATEN DOWN STOCKS
9.1 Introduction 38
9.2 Buy when there is blood on the street 38
9.3 Conclusion 40
10
IMPACT OF CURRENT EVENTS ON STOCK PRICE
10.1 Introduction 41
10.2 Market impact of news/events 41
PAGE
I-21 CONTENTS

10. PAGE
10.3 Impact of IPO performance 43
10.4 Conclusion 43
11
PRICING POWER
11.1 Introduction 44
11.2 Duopolies and oligopolies 44
11.3 Power of pricing 45
11.4 Economic moat 46
11.5 Measuring pricing power 46
11.6 Conclusion 47
12
LIFE EXPECTANCY OF COMPANIES
12.1 Introduction 48
12.2 Life expectancy of companies 48
12.3 Survival of sensex companies 49
12.4 Sustainability of companies 52
12.5 Conclusion 52
13
DIVIDEND DECISIONS
13.1 Introduction 53
13.2 What is dividend? 53
13.3 No-dividend policy 54
13.4 Why dividends? 54
13.5 Dividend income could be substantial 55
13.6 Steady and rising dividends 56
13.7 Domestic vs. MNC policies 56
13.8 Conclusion 57
CONTENTS I-22

11. PAGE
14
BONUS SHARES, SHARE SPLIT AND RIGHT SHARES
14.1 Introduction 58
14.2 Bonus shares 58
14.3 Impact of bonus issue 59
14.4 Income tax impact of bonus shares 60
14.5 Splitting of shares 60
14.6 Income tax impact of splitting of shares 61
14.7 Right shares 61
14.8 Conclusion 62
15
BUYBACK OF SHARES
15.1 Introduction 63
15.2 What is buyback of shares? 63
15.3 Why buyback shares? 64
15.4 Buyback vs. dividend 64
15.5 Conclusion 65
16
MUTUAL FUNDS AND THEIR RELEVANCE
16.1 Introduction 66
16.2 What is a mutual fund? 66
16.3 Types of mutual funds 67
16.4 Equity funds 68
16.5 Income funds 68
16.6 Balanced funds 69
16.7 Net Asset Value (NAV) 69
16.8 Systematic Investment Plans (SIPs) 69
16.9 Choosing a mutual fund 70
I-23 CONTENTS

12. PAGE
16.10 Why mutual funds? 70
16.11 Conclusion 73
17
VALUE INVESTING
17.1 Introduction 74
17.2 Essence of value investing 74
17.3 Why are stocks underpriced? 75
17.4 Basic principles of value investing 76
17.5 Conclusion 82
18
INVESTING IN GROWTH SHARES
18.1 Introduction 83
18.2 Essence of growth investing 83
18.3 Growth vs. Value - How different are they? 84
18.4 Identifying growth companies 84
18.5 What is the right price earning multiple? 85
18.6 Exiting growth companies 86
18.7 Conclusion 87
19
LESSONS IN WEALTH CREATION
FROM WARREN BUFFETT
19.1 Always remember the 2-part rule 88
19.2 Time is the essence of wealth creation 89
19.3 Do not watch the stock exchange tickers 89
19.4 Invest in businesses that you understand 90
19.5 Identify a good business at a fair price and invest in it for
long term 90
19.6 Use margin of safety 91
CONTENTS I-24

13. PAGE
19.7 Do not diversify your portfolio 91
19.8 Avoid herd mentality in investment 92
19.9 Summary 92
20
TRADING VS. INVESTMENT
20.1 Introduction 93
20.2 What is trading? 93
20.3 What is investing? 94
20.4 Issue of trading vs. investment 96
20.5 Conclusion 97
21
SENSIBLE INVESTMENTS - PRACTICAL POINTS
21.1 Introduction 98
21.2 Practical points for successful investment 98
21.3 Pitfalls to avoid 104
21.4 Useful tools for sensible investments 106
21.5 Conclusion 108
22
KEY TO MULTIBAGGER RETURNS
22.1 Introduction 109
22.2 Multibagger scrips in India 109
22.3 Preparing for multibagger companies 110
22.4 Researching and identifying a quality scrip with potential 111
22.5 Buying the scrip at the right price 113
22.6 Holding the scrip to its true potential 114
22.7 Booking profits at the right time 115
22.8 The puzzle of multibaggers 117
I-25 CONTENTS

14. PAGE
22.9 Multibaggers and you 118
22.10 Conclusion 119
PART TWO
BASICS OF STOCK ANALYSIS
23
BASICS OF FUNDAMENTAL ANALYSIS
23.1 Introduction 125
23.2 Industry/sector analysis 125
23.3 Company analysis 126
23.4 Accounting ratios 127
23.5 How to analyse a company? 130
23.6 Conclusion 132
24
BASICS OF TECHNICAL ANALYSIS
24.1 Introduction 133
24.2 What is technical analysis? 133
24.3 Graphs and trend analysis 134
24.4 Trend lines, support and resistance 136
24.5 Popular theories/tools of technical analysis 137
24.6 Conclusion 140
ANNEXURES
ANNEXURE 1 : COMPARATIVE RETURNS CHART 143
ANNEXURE 2 : INDIA TOPS 25 - YEAR RETURNS CHART 145
ANNEXURE 3 : WORLD STOCK EXCHANGE PERFORMANCE 146
ANNEXURE 4 : THE ROLLER COASTER JOURNEY OF THE SENSEX FROM
100 TO 41,000 147
ANNEXURE 5 : NSE NIFTY 50 149
CONTENTS I-26

15. PAGE
ANNEXURE 6 : AMAZING STORY OF RELIANCE INDUSTRIES - THE
FIRST INDIAN COMPANY TO ENTER ` 10 TRILLION
MARKET CAP CLUB 152
ANNEXURE 7 : AVENUE SUPERMARTS LTD. - THE COMPANY THAT
DEFIES GRAVITY 154
ANNEXURE 8 : AN ILLUSTRATION OF COMPOUNDING 156
ANNEXURE 9 : CONSISTENT COMPOUNDERS (MULTIBAGGERS) 157
ANNEXURE 10 : EMERGING MULTIBAGGERS 161
ANNEXURE 11 : THE IMPACT OF INCOME TAXES ON STOCKS 165
ANNEXURE 12 : ACCOUNTING FOR SHARE TRANSACTIONS 170
ANNEXURE 13 : REGULATION IN INDIAN FINANCIAL MARKETS 173
ADDITIONAL READING FOR INTERESTED READERS 176
BIBLIOGRAPHY 179
FINANCIAL TERMINOLOGY 181
I-27 CONTENTS

16. Sample Chapter
“The true investment objective of growth is not just to make gains but to avoid
loss.” – Attributed to Philip Fisher.
5.1 Introduction
Thefundamentalreasonforinvestinginstocksistocreatewealth.Itgoeswithout
saying that, to create wealth, one should invest in winners and not losers. But
of course, this is trickier than it sounds. The fact is that investors often choose
the wrong track, sometimes out of ignorance but more often because their
mindset is wrong. Even the most talented and studied investors do not buy the
right stocks all the time. Mistakes are not just possible but normal. The key is
to recognize the mistake, correct it promptly, and avoid repeating it.
5.2 Wrong booking of profits/losses
One very common mistake is booking profits in winners while keeping losers.
This results from the mindset that all investments should be profitable in the
end. Investorsof this mindsetcling to scripsthathavelostvalue,convinced that
the cost will be recovered if they only wait long enough. If, after a prolonged
wait, the scrip slowly creeps up in price and passes the level of the investor’s
original cost, they finally sell the scrip for a small profit, feeling satisfied that
they averted a loss. In reality, they are making one of two mistakes. If the scrip
was a poor choice, the investor should have sold it as soon he knew it, rather
than wait (forever) for the scrip to regain its original value. If the scrip is actually
a good value, it should be kept until it reaches its true potential, not sold for a
small profit. A good example of this lesson is the scrip Manappuram Finance.
Let us look at its price movement over a period of several years.
Invest in winners,
do not chase losers
5
C H A P T E R
21

17. During the middle of 2014, Manappuram Finance was quoting around ` 35 to
40. A few months later, the scrip fell into the range of ` 20 to 25, due to some
regulatory concerns and the fall in gold prices. The price remained below 30
for most of 2015, then started rising in early 2016, reaching the 35 to 40 range
in the second quarter. Investors who entered the scrip in the 35 to 40 range
during 2014 would have had to wait about two years to recover their cost. No
doubt, many of them sold in the second quarter of 2016, when the price finally
exceeded their cost. Let us now consider where mistakes were made.
When Manappuram Finance’s price collapsed during late 2014 and early 2015,
investors should have opted to “stop loss” and sold the scrip, as there were
serious concerns about the stock at that time. The investors who waited for
cost recovery and sold in Q 2 2016 earned no return even after waiting for 2
years. As it turns out, this too was a serious mistake: after crossing 35 to 40
range in Q 2, the scrip went on to cross ` 100 during Q 4 of 2016. Thus, the
investors who sold in Q 2 after finally recovering their cost achieved the worst
possible outcome.
The right approach would have been to sell in late 2014 or early 2015 as soon
as the mistake became apparent, or, having already waited through difficult
times, to persevere until the scrip reached its true potential.
5.3 Avoid sentiments in investing
There’snoroomforsentimentininvesting.Oneinvestsinsharestomakeprofits
and create wealth. Listed shares are generally highly liquid, so if a stock under-
performs, you can get out of it quickly—without incurring large exit charges.
In real estate or in gold jewellery—the two other common investments for
Indians—exiting can be difficult and typically involves expensive fees. In real
estate, for example, transfer costs of around 8%–15% of the cost of the asset
apply every time a transfer takes place. And finding a buyer for your property
may take time. In gold jewellery, the making charges are sometimes as high as
10%–20% of the cost of gold, and most of this sum is lost in every transfer. In
contrast, the cost of selling shares is nominal—typically a quarter to half per
cent at the maximum.
5.4 When to get out of a losing stock
If a share investment turns bad, get out of it quickly, but only after doing some
homework. If you picked up the scrip after conducting detailed research, go
Para 5.4 PART 1 : INVESTING WISDOM 22

18. back to your information and see where you went wrong. If your data still
seems dependable and if the scrip’s non-performance seems only temporary
or is attributable to an easily resolved problem or issue, then there’s no need
to sell right away. In fact, an industry leader that’s experiencing some modest,
temporary trouble could be an ideal candidate for purchase. For example, in
June2015,Nestle,themarketleaderinFMCGsegment,experienceda10%one-
day decline in its scrip after sales of its top brand, Maggi noodles, were banned
due to a product defect. Maggi is sold all over the world, so smart investors
should have intuited that the ban would be temporary and the product would
soon be back on the shelves. Sure enough, the ban was lifted after 5 months
and the product recaptured its market share in less than a year.
On the other hand, if you realize that your premise for buying was wrong or
that conditions in the market have changed (as, for example, due to unexpect-
ed government policies or an unexpected problem with the integrity of the
promoter), then don’t dawdle—sell the scrip. In these situations, booking loss
early is wiser than waiting for the price to recover.
Another mistake to avoid is to blindly mimic others, including experts. Picking a
SensexorNiftysharebasedon“expert”advicemaynotcauseyouseriousharm,
as a share included in a major index should satisfy basic standards. But if the
scrip is unknown, be extremely careful. A recent example of the risk is “Surana
Solar” scrip5
. On June 9, 2015, Exchange data showed that India’s best-known
investor, Rakesh Jhunjhunwala, had purchased 2.56 lakh shares of the scrip at
anaveragepriceof` 53.74.Thiswasbignews,asthecompany’sfinancialswere
poor; the stock hit the upper circuit. When news reports later clarified that
the purchase had been made by someone other than the well-known investor,
the scrip collapsed to the lower circuit, losing more than 40% in the next four
trading sessions. NSE and BSE were instructed by SEBI to withhold securities
and fund payouts, pending an investigation into the matter. Thus, anyone who
buysblindly,withoutverifyingthequalityorfundamentalsofthescrip,isatrisk.
5.5 Cost averaging
Cost averaging is a strategy that investors often adopt when the price of the
purchased scrip falls. For example: If you buy 100 shares of a company @ ` 50,
then buy another 100 shares after the scrip falls to ` 40 each, you would have a
total of 200 shares at an average cost of ` 45 (100 *50 + 100*40 = 9000/200 =
5. ChennaiBureau,“Jhunjhunwalaeffect:BourseswithholdpayoutsinSuranaSolartrades,”TheHinduBusiness
Line, Saturday, June 13, 2015.
23 CH. 5 : INVEST IN WINNERS, DO NOT CHASE LOSERS Para 5.5

19. 45 per share). Cost averaging can be done at a higher price also, which would,
naturally, result in a higher average cost than the original.
Cost averaging at lower prices is generally not recommended. A fall in price
normally means something is wrong with the scrip. Why buy more of it when
thingsarenotOK?Ontheotherhand,ifyouboughtascripafterproperresearch,
and if the fall in price is caused by something that can be set right soon or is
a one-time event, then a purchase may be in order. The key point here is that
one should not blindly follow a principle of buying when the price falls. Buying
is a serious decision in which all aspects of the case should be considered; it
should not be an impulsive response to a cheap price.
5.6 Avoid booking small profits
A practical problem for casual investors and traders is that they end up booking
small profits on good shares in order to hold onto other shares that have so far
incurred losses. Investors who do this are missing the big picture. Peter Lynch,
the legendary investment manager, notes that instead of rectifying mistakes,
investors do the opposite by “pulling out the flowers and watering the weeds”.
Lynch observes that “if you are lucky enough to have one golden egg in your
portfolio, it may not matter if you have a couple of rotten ones in there with it”.6
5.7 Conclusion
No one picks good shares all the time. Mistakes are inevitable, so don’t fret too
much over them. The mistake to avoid is to hold your worst picks while selling
your best ones. Warren Buffett remarks that “if you buy things you don’t need,
you will soon sell things you need”. If a person has a portfolio of 10 scrips, it
is normal to have couple of big losers, a couple of small losers, some small
winners, and a few big winners. The strategy to adopt is to get rid of the losers
(after examining their potential and being satisfied that their prospects are
bleak), cost average the future winners, and hold onto the big winners. Over
time, the profits from the big winners will be far higher than the losses you
booked from the fallen shares. The winning strategy is to cut your losses early
and run with the winners.
6. Lynch, Peter, and John Rothschild. One Up On Wall Street: How to Use What You Already Know to Make
Money in the Market (New York: Simon & Schuster, 2000).
Para 5.7 PART 1 : INVESTING WISDOM 24

20. STOCK
MARKET WISDOM
Author : T.S Anantharaman
Edition : 2020 Edition
ISBN No : 9788194924661
Rs. 725 USD 20
Date of Publication : December 2020
Weight (Kgs) : 0.245
No. of papers : 224
ORDER NOW
Description
Taxmann’s Stock Market Wisdom highlights the great potential of the stock market
while guiding investors to invest wisely and how to avoid its pitfalls. It is an attempt
to assist investors to understand the following:
u How the market system operates?
u How one should invest money in it?
u How one can generate wealth through it over the long term.
The author has also explained how the markets have evolved, what their present
stage is, where they’re headed, and, of course, how you can benefit, with the help of
multiple case studies.
u Featuring the following case-studies:
n India’s Top 25 Years Return Chart
n World stock exchange performance
Reviewed by Motilal Oswal (Managing Director) | Motilal Oswal Financial Services Ltd.
“For any new investor who is starting his journey in stock markets, or even an old
investor who has not been yet able to decode investment success for himself, this is
a fine book to start or restart the journey, as the case may be.”
“The basics of investing and trading have been explained in a very lucid and simple
manner and the complete spectrum of investing has been covered from history of
the stock markets, the working of the stock markets, the basic of fundamental analy-
sis, basics of technical analysis, concepts dividends, bonus, splits, buy backs, etc.”
“Most importantly, a large part of this book is about behaviour analysis and how it
impacts the investor returns in this fascinating journey of stock market investing.”