Mantra to create wealth: see an opportunity where others see none

Prosperity,success and wealth comes from innovative ideas,initiative,and endurance to stand through rough and tough times.During the last one month many investors have seen their networth depleting by as much as 40%. However success begins with the ability to see an opportunity where others see none.We invite the attention of our readers /friends /investors to our earlier recommendations and the prices they were recommended at.We suggest that these companies shares can be purchased at our old recommended prices:

1. Marson Ltd.          recommended in Nov 2007 at Rs. 4.    Price touched high of Rs. 16

2. Facor Steel           recommended in Oct 2007  at Rs. 4 .  Price touched high of Rs. 18

3. Supreme Petro      recommended at Rs.24.           Price touched high of Rs.51 Now buy at Rs. 23

4. Shivalik Bimetal    recommended in Aug at Rs. 15     Price touched high of Rs.34

5.Software Tech Group STG  recommended at Rs.13    Price touched high of Rs. 44

6. Laffan Petro   recommended at Rs. 20   Price touched High of Rs. 40  Now buy at Rs. 18

7. Clutch Auto    recommended at Rs. 115    touched high of Rs. 170        Now buy at Rs. 72

Its possible that some of the prices have still not bottomed out.However we consider it very difficult if not impossible to locate the bottom,and in doing so we may miss the bus.Some experts are of the opinion that the market will take a U-turn in May 2008. So you still have a few months to see an opportunity where others see none and pick some of the under-priced stocks which will create wealth for you in 2008.


Rakesh Jhunjhunwalla Speaks on investments and how he made his millions

Listening to Rakesh Jhunjhunwalla for one hour is better than reading 25 books on investment.Here is the summary:

A) ‘Enter the market when no one else does’

Jhunjhunwala takes the cue from Warren Buffett when he says: “Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”

  • Don’t follow stock picks by big investors
  • Remember: the market is always right
  • You can never be taught about market, you have to learn it
  • You must balance fear and greedJhunjhunwala says he is ‘well invested’ in key growth areas like banking, retailing and infrastructure, all of which are based on India’s domestic performance.His private equity interests offer more detail — education (private schools in Mumbai), hospitals and health care, a security company, pharmaceuticals, and dredging.
  • B)‘Markets are like women — always volatile’
  • “Markets are like women — always commanding, mysterious, unpredictable and volatile,” ‘Big Bull’ Rakesh Jhunjhunwala had told a gathering in Mumbai a few months back.For Jhunjhunwala, trading by the hunches is the best thing to do. “If in doubt, listen to your heart,” is what he tells young investors. Given below are some investment gems from him:
  • Be optimistic
  • Be opportunistic
  • Study the market thoroughly
  • Maximise profits and minimise losses
  • Invest in a business not a company
  • Have an independent opinion, always
  • Be happy with your gains but take losses in your stride
  • Be prepared for risks
  • Despite sharp corrections, early this year Jhunjhunwala predicted that the Indian markets will reach its peak by 2010

  • C)’Markets plunging? Don’t sell in panic’
  • Jhunjhunwala states that there is nothing to fear despite a sharp plunge in the Sensex this year. He assures investors thus:

  • Nothing has changed as the Indian market is ‘deep-rooted’
  • Corrections, however sharp, are indispensable
  • Panic selling during a sharp fall is the worst thing to do
  • Stay invested and calm when the markets nosedive
  • The country is poised to soon achieve a double-digit economic growth along with an impressive corporate profit growth
  • This is bound to drive the bourses
  • It does not take rocket science to understand that India’s economic growth will be in double digits

    D)Tips for beginners

    And for beginners in the stock market, this is what he has to say:

  • Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it
  • Do something you love
  • The means are as important as the end
  • Aspire, but never envy
  • Be paranoid of success — never take it for granted. Realise success can be temporary and transient
  • Build a fighting spirit — take the bad with the good
  • When you see a horizon, it seems so distant. When you reach that horizon, you will realize how many more horizons are within reach
  • Jhunjhunwala said enormous wealth was created over the last five years because opportunities in India have grown manifold.ŠAdmitting that gains were going to be moderate in future unlike the manifold rise over the last few years, he advised investors to be realistic in their expectations.Š
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    Share Trading and Game of Chess

    In 1972, Bobby Fischer won the  World Chess Championship.That year I was doing M.Tech from IITK India and staying at Room Number 316 ,Hostel #4 of IIT Kanpur. I vividly remember the day was 1st Sept 1972 when Bobby Fischer was declared winner defeating Boris Spassky.My immediate neighbour Mr. Behl was doing PhD in Physics,and we both became almost addicted to the game of Chess, and used to play regularly.Occasionally we were joined by Institute champion Mr. Dhawan,and in a very short time I had picked up the game very well,and in that year Chess tounament I was placed 6th,among 48 entries received.Not bad for a novice who started playing just a few months back.

    Later after leaving IITK,I continued playing Chess and Contract Bridge,and won a few awards too.In year 1976,I started investing in stocks,and now that I have also started trading in shares,I find that playing game of Chess and Trading in shares,have number of similarities.Some of them are:

    1. Market sentiment is the “Queen” which can move in any direction.Understanding of market sentiment carries the biggest weightage in share trading,just as Queen has the most points for one piece on the Chess Board.
    2. Fundamentals of the company are like the two “Rooks” which can move up or down or sideways but at a slow pace signifying the movement of Elephants.
    3. Technicals  of the company,are like the two “Bishops”which can move only diagonally as the data interpretaion of price/volume movement is diagnosed by a Technical expert,who normally does not like to be straightforward.He likes to confuse traders with his interpretation.
    4. M&A activity in the company is like the movemrnt of  two “Knights”,as atleast two entities are involved in M&A and after the event a new entity takes shape.
    5. All employees are represented by “Pawns”.Some of them can become Queen,but can not take position of the “King” as happens in family run businesses.

    So the most important element in share trading is the market sentiment.To understand market sentiment requires the intuitive ability to read the mind of other traders.In today’s Times of India,I was reading about the 13 year old Grand Master PARIMARJAN NEGI from India.And the common trait I found between Bobby Fischer and Parimarjan is the incredibly high retentive power.In 1972 newspapers had reported that Bobby Fischer remembered all the moves that were played during various games with Boris Spassky.And today’s Times of India reported and I quote:

    “He remembers all his games.At the age of four Parimarjan’s computer like mind got hooked on to chess.He could foresee the moves of his opponents” 

    I think people like Rakesh Jhunjhunwalla and Warren E Buffet have also been gifted with excellant retentive power and intuition to foresee the market sentiment,analyse the fundamentals accurately and predict the behaviour of the market with Technical analysis,before others can.Well,my consolation is that I still have 20 more years to catch up with Warren Buffet and send a letter like written by him on 26th June 2006 ,the day I started my blog to my Guru HE Sri Sri Ravi Shankar.I am sure I will be able to accomplish my mission before my visa to visit this planet expires.       Š