Sensex at 1 lakh by 2025: I SAY POSSIBLE ? WHAT U SAY

A equity research group Elliot Wave International is predicting that SENSEX could reach 1 lac levels 16 odd years from now in 2025.Do you know it true? I don't know that this research report is genuine or no?But I personally feel that this can come true as India along with China will be the leading economy in the world. Here is a Evidence.Other factors -Indian GDP is surely ought to increase it will much higher than it is now.It could easily be over 8-9 trillion $.So I am bullish on Indian Economy (2025).Though trusting any report in dangerous. But one can always check out the past records and find what is possible. How Wipro Ltd. made many people BILLIONARIES?
Do you know an investment of Rs. 10,000 in Wipro in 1979 would be worth more than 200 Cr. today. Believe it or not but this is the fact.So all of you all may be searching for another Wipro. But no one knows which company will be WiproIts all on you.What do you have to say on this ?

Investment norms for New Pension Scheme finalised

Investment norms for New Pension Scheme finalised

Paving the way for the New Pension Scheme (NPS) from this Friday, the Pension Fund Regulatory and Development Authority (PFRDA) On Wednesday announced investment guidelines for contributory plans.

Following recommendations from the Deepak Parekh-headed Expert Group and taking into account comments from the public, PFRDA has categorised NPS investments into three asset classes – E (equity), C (corporate paper) and G (government securities).

PFRDA has appointed State Bank of India, UTI, IDFC, ICICI Prudential Life Insurance, Kotak Mahindra and Reliance Mutual Fund as the fund managers for NPS. These players have to set up separate companies to manage the business. All players, barring Kotak Mahindra, have signed the requisite agreements, with the only remaining fund manager likely to sign the pact tomorrow.

As per the guidelines, investments in E scheme would allocate assets into index funds that replicate the portfolio of a particular index, such as the BSE’s 30-share Sensex or the NSE’s Nifty 50 index.

The G scheme would allow investors to park money in Government of India and State Government bonds. For this category, the Expert Group had recommended liquid funds of asset management companies (AMCs) and fixed deposits of banks that have a net worth of over Rs 500 crore, a capital adequacy of at least 9 per cent and whose proportion of net non-performing assets against net advances is below 5 per cent.

The C scheme would allocate investments in liquid funds of AMCs with average total assets under management of at least Rs 5,000 crore over the last six months. The scheme would also park assets in fixed deposits of scheduled commercial banks that fulfil the given criteria suggested by the Expert Group.

Further, the C class assets would also include debt securities with a maturity of at least three years. These instruments include debt papers issued by corporates, banks and financial institutions. PFRDA said that at least 75 per cent of the investment in this category has to be made in instruments having an investment grade rating from at least one credit rating agency.

The C class investments also allow allocations for credit-rated municipal bonds, infrastructure bonds, PSU bonds and credit-rated public financial institutions.

The funds of those investors who do not specify an asset class would be routed to the ‘Auto Choice’ scheme by default.

Under this option, 50 per cent of the investments would be allocated to E category assets, 20 per cent would be invested in G category and the rest in the C class of assets for investors up to the age of 35.

For investors at the age of 55 years, 10 per cent of the investments would go into the E class, 80 per cent would be invested in the G category and the rest 10 per cent would be parked in the C class of assets, under the auto choice option.

All on Long term Investing and How to identify Multibaggers ?

All on Long term Investing and How to identify Multibaggers ?

When some one says Long term investment the first thing to come in mind is Patience.Do you know an investment of Rs. 10,000 in Wipro in 1979 would be worth more than 200 Cr. today. Believe it or not but this is the fact.So all of you all may be searching for another Wipro. But no one knows which company will be Wipro.

How to analyse the stocks for long term ? - My Six Sigmas.

1. Check the market cap. Select a company preferably in a market cap of 3 figures. Less the market cap the more is the advancement oppurtunities.
2. Look for an upcoming sector. eg . Telecom and Pharma. An example is China Mobile worlds largest mobile company. Every body needs a cell phone. Telecom is sure to rock.
3. Look for resources Example - Land. Look for companies which have good amount of property. As most money made is in Property and Development.
4. Increasing profits in balance sheet on year over year basis. A tip check for PAT.
5. Future Order value. Example LNT is one good stock.
6. Be Confident in your Scrip

What does Value Stock and Value Investing Means ?

What does Value Stock and Value Investing Means ?

Value Stock Means a stock which is available at a dirt cheap rate comparing with its previous price or any other fundamental of the stock say it dividend offered, Earnings of the company, etc and is thus considered undervalue by the investor.

Thus a investor buy a value stock when he thinks the future of the stock is bright if compared with its current price.In Simple words a value stock is a stock which is available at a dirt cheap rate compared with its fundamentals.

Value Investing is a strategy adapted by various investors of buying the stocks when they are available cheaply or at a dirt cheap rate.It is also a strategy of selecting stocks that trade for less than their intrinsic values.Typically, value investors select stocks with lower-than-average price-to-book or price-to-earnings ratios and/or high dividend yields.

How Warren Buffett picks stocks in a bear market?

How Warren Buffett picks stocks in a bear market?
In times of economic decline, many investors ask themselves, 'What strategies does the Oracle of Omaha employ to keep Berkshire Hathaway on target?'The answer is that the esteemed Warren Buffett, the most successful known investor of all time, rarely changes his long-term value investment strategy and regards down markets as an opportunity to buy good companies at reasonable prices.In this article, we will cover the Buffett investment philosophy and stock-selection criteria with specific emphasis on their application in a down market and a slowing economy.

The Buffett Investment Philosophy

Buffett has a set of definitive assumptions about what constitutes a 'good investment'. These focus on the quality of the business rather than the short-term or near-future share price or market moves. He takes a long-term, large scale, business value-based investment approach that concentrates on good fundamentals and intrinsic business value, rather than the share price.

Buffett looks for businesses with 'a durable competitive advantage.' What he means by this is that the company has a market position, market share, branding or other long-lasting edge over its competitors that either prevents easy access by competitors or controls a scarce raw-material source.

Buffett employs a selective contrarian investment strategy: using his investment criteria to identify and select good companies, he can then make large investments (millions of shares) when the market and the share price are depressed and when other investors may be selling.

In addition, he assumes the following points to be true:

• The global economy is complex and unpredictable.
• The economy and the stock market do not move in sync.
• The market discount mechanism moves instantly to incorporate news into the share price.
• The returns of long-term equities cannot be matched anywhere else.

Buffett Investment Activity

Berkshire Hathaway investment industries over the years have included:

Insurance

Soft drinks

Private jet

aircraft

Chocolates

Shoes

Jewelry

Publishing

Furniture

Steel

Energy

Home building

The industries listed above vary widely, so what are the common criteria used to separate the good investments from the bad?

Buffett Investment Criteria

Berkshire Hathaway relies on an extensive research-and-analysis team that goes through reams of data to guide their investment decisions.While all the details of the specific techniques used are not made public, the following 10 requirements are all common among Berkshire Hathaway investments:

1. The candidate company has to be in a good and growing economy or industry.
2. It must enjoy a consumer monopoly or have a loyalty-commanding brand.
3. It cannot be vulnerable to competition from anyone with abundant resources.
4. Its earnings have to be on an upward trend with good and consistent profit margins.
5. The company must enjoy a low debt/equity ratio or a high earnings/debt ratio.
6. It must have high and consistent returns on invested capital.
7. The company must have a history of retaining earnings for growth.
8. It cannot have high maintenance costs of operations, high capital expenditure or investment cash flow.
9. The company must demonstrate a history of reinvesting earnings in good business opportunities, and its management needs a good track record of profiting from these investments.
10. The company must be free to adjust prices for inflation.

The Buffett Investment Strategy

Buffett makes concentrated purchases. In a downturn, he buys millions of shares of solid businesses at reasonable prices.Buffett does not buy tech shares because he doesn't understand their business or industry; during the dotcom boom, he avoided investing in tech companies because he felt they hadn't been around long enough to provide sufficient performance history for his purposes.

And even in a bear market, although Buffett had billions of dollars in cash to make investments, in his 2009 letter to Berkshire Hathaway shareholders, he declared that cash held beyond the bottom would be eroded by inflation in the recovery.

Buffett deals only with large companies because he needs to make massive investments to garner the returns required to post excellent results for the huge size to which his company, Berkshire Hathaway, has grown.

Buffett's selective contrarian style in a bear market includes making some large investments in blue chip stocks when their stock price is very low.And Buffett might get an even better deal than the average investor: His ability to supply billions of dollars in cash infusion investments earns him special conditions and opportunities not available to others. His investments often are in a class of secured stock with its dividends assured and future stock warrants available at below-market prices.

Conclusion

Buffett's strategy for coping with a down market is to approach it as an opportunity to buy good companies at reasonable prices.Buffett has developed an investment model that has worked for him and the Berkshire Hathaway shareholders over a long period of time. His investment strategy is long term and selective, incorporating a stringent set of requirements prior to an investment decision being made.Buffett also benefits from a huge cash 'war chest' that can be used to buy millions of shares at a time, providing an ever-ready opportunity to earn huge returns.Source - Rediff.com (Actual article is from Investopedia but I extracted it from Rediff)

Some basic principle of Smart Investing.

Some basic principle of Smart Investing.
Here are some basic Principle of Smart Investments.
1. Diversify, Diversify and Diversify
2. Start investing early
3. Invest in things you know
4. Avoid fads
5. Don't let a market slump change your long-term investment plan
6. Don't check the price of a stock (or mutual fund) after you've sold it
7. Pay attention to what's going on with your investments
8. Be realistic about your tolerance for risk
9. Hold onto your winners and sell your losers
10. Get the best investment advice you can--and then think for yours