TRADING DISORDERS – STOCK MARKETS

TRADING AS A PROFESSION:

Professional experts consider "Day Trading" is an effective tool to make money on the volatility day but amateur retail investors get caught on the wrong foot due to emotional imbalance and lack of understanding of the "Game Plan" involved.

The Online Trading opened many windows of opportunities to retail investors. Many traders prefer Day trading in stock markets as a profession because of the underlying opportunity to make money is huge. The online screens exhibit the trades with rise and fall of the prices in ticker and the colors that stimulate emotions to Buy or Sell instantly to grab the opportunity. The emotional "Greed and Fear" attached to the position when built, generate anxiety and turbulence in the mind and get confused to take right decisions at the right time.

COMMON TRADING DISORDERS:

The Institutional and professional investors wait for the right time to go for shopping in stock markets whose investment research enhances better decision-making process with RIGHT perspective in STOCKS that can do well in future, improve their balance sheets at revenue front & profits part and market capitalization. The Investment decisions in stock markets considered both on Scientific research and Art part is recognizing the “TIME to INVEST”. They have the holding capacity as well loss-bearing capacity and may sometimes write off the loss and search afresh in other stocks.

RETAIL TRADER CHALLENGES:

I)Revenge Trading:

Revenge Trading is a very common practice and done to make money from that counter/scrip. The force of revenge gets generated in the mind as a consequence to the loss incurred due to hasty decisions made in the market volatility. The trader gets emotional rage to the foolish position made and a humiliating failure to enjoy profits triggers retaliation. Many losers as traders do trade with induced insults met and previous wounds stored, strike back with vengeance, also addicted to trade with vigor to prove that they are right and worthy.

The traumatic losing deals are painful and hard to digest. The failure to take right decision bug the mind, pressure build beneath the layers over a period of time. The frustrated mind call for a revenge and retaliation to cover losses from that stock triggers Revenge Trading (study the “Rouge Trader”, a true story of Nick Leeson).

The human Psychology Research Institutes state that the pre-frontal cortex the amygdala responsible for emotional reactions controls the decisions that the trader makes when encountered with an emotional reaction and also regulates the anxiety that shoots up once substantial positions are taken up.

II)Coercive Trading:

Coercive Trader with animal instincts, rule the mind and heart with EGO-centric approach become blind to accept reality, do trade with little reasoning. These traders ignore the warnings, think little on what is being done at the trading, blindly build positions and their ultimate consequences are well known to many.

Most of the times, many traders who lost their control over their positions “pray for the wish” to happen and keep on buying when the price is falling and keep on selling when the prices are rising with coercive nature and argumentative mind. Any size of position against the major trend is a drop in the ocean and simply trying to demand the ticker to do the opposite never happens, seldom prayers get respected those who ignored “The Reality”. This kind of approach even ruined Jesse Livermore (the greatest trader, read the book “ The Reminiscences of a Stock Operator”)

Emotional Compulsive Trading:

Stock trading is a dangerous game for Traders with high emotional attitude get attracted to the magic of Ticker, can become a prey to the market operators. Emotionally disturbed trader lack the situational judgmental mindset, is a Noise Trader (the term first used by Fisher Black in 1986) who is also known a Idiot Trader whose decisions to buy and sell are irrational, confusing, erratic and become a compulsive trader to keep on punching BUY or SELL, doesn’t consider the direction but involves in push and pull off the volume into the system. Needless to mention the results of these traders, may not survive in trading for a long time.

UNDERSTAND GREED AND FEAR:

Professional/seasoned traders get the gut feel, place entry and exit points with a well-defined plan in tune with markets movements. The small-time retail players make their decisions based on some advice, find difficult to deal deep-rooted greed to make instant money in the volatility and fear of further loss influence their decisions but not the rationale, end up winding the capital base. These traders get success less than 5 percent but more than 90% get addicted, continue to create problems to their accounts.

Catch a ROPE:

Result Oriented Planned Efforts-ROPE for better returns as a principle for investing, a well-thought strategy. Market participants unanimously agree that TIMING the bottoms and highs in Stock-Market, a very difficult task anybody can ever achieve. So Institutional investors find their Buying Zones and Selling Zones, instead merely focus on exact right Bottom to BUY and Right High to SELL, whereas retail investors get tempted to CATCH the opposite side for quick bucks, end up in losing wealth.

CONCLUSION: Stock trading is a big opportunity to make money. By the way, understand trading disorders, risks, traps and emotions involved to manage success in stock markets.

A planned approach helps to garner the opportunity and wealth can be created as well. 

TRADE the PRICE

THE VERY FUNDAMENTAL ASSUMPTION OF STOCK INVESTMENTS (for that matter any investments) ARE TO MAKE MONEY WITH SUITABLE PORTFOLIO OVER A PERIOD OF TIME. MANY RETAIL INVESTORS QUITE OFTEN FAILED TO RECOGNIZE THE BASIC RISKS INVOLVED AND ALSO IGNORE THE FUNDAMENTAL RULES TO BE STRICTLY FOLLOWED TO MAKE MORE MONEY FROM THE STOCK MARKETS.

Ace Investor Ideology:

Every Investor bestowed with equal opportunities to make lots of money from stock market investments provided think & invest like an institutional investor does. No matter how big or small money available for investments, doesn't matter whether BUY a small-cap, mid-cap or Large-cap but the approach to investments in markets makes a person rich or multi-millionaire.

Most of the stock market retail investors follow their legendary investors stock investments. It is not wrong to follow a successful investor's ideology but what matters most is the suitability to one's needs and requirements. So always understand the concepts of an Ace Investor strategy & sector allocation then develop a workable strategy that suits well but don't just follow blindly.

Who Rules...?

The Stock price action gets activated from Low to High and High to Low due to a determined tussle between BULLs & Bears that enables smooth transfer/exchange of VOLUME to acquire/offload the stock. During good times BULLs command the most, while BEARs take charge when gloominess runs but the underlying attraction point that turn tables is neither Bulls nor Bears but the PRICE. The STOCK PRICE attracts the interested parties to become BULLS or BEARS to command and enjoy the future returns. The possibility and future prospects propel the participants to decide their position and sustain their view till the PRICE reaches its realistic value.

Trade the Price:

Stock trading/investments open the doors of opportunities to many players like Day-traders, Swing traders, Positional traders, retail/small investors & Institutional investors..etc with a bouquet of investment opportunities in different companies in various sectors. The growth stocks always build their strong base during the times of bad periods/recession time and emerge as winners and find pinnacle place as tide turns their favour with a tag as most sought/favoured stocks. It is always advisable to "Trade the Price" to make more money from markets even in multi-bagger stocks once the valuations reach very high. In case the overall market take a Southward journey, these counters also deserve a trade but don't exit from the stock. This situational position sizing and building the portfolio is very important to enjoy long-term multifold returns. (Ex: Recently Rakesh Jhunjhunwala sold Delta Corp at Rs 160+ levels range and re-entered @ Rs105+)

Build Capacity to Hold:

The capacity to hold with large quantities for a reasonable period makes a big difference in enjoying the multi-bagger stocks upward journey. Many seasoned investors know that the Elliot principle plays a big role and most retail investors get out of the stock during the first leg of the up move or in the retracement levels.

Many successful investors who learned hard lessons from their experiences shared the importance of Position sizing. Their initial investment experiences are bitter to digest and some blew their accounts with an anticipation to make HUGE profits in short period, turned sour. The psychological exuberance while buying blue-chips and excitement to hold large quantities of quality stocks for multi-bagger returns encouraged them to ignore current high valuations. All the more, got trapped in LEVERAGE loop, find it hard to hold for a longer period during the downfall forced them to exit for a loss or nominal profits from that possible multibagger counters. These experiential situations are common to many investors.

MULTI-BAGGER INVESTMENT STRATEGY:

NO-DOUBT, STOCK-MARKETS ARE ONE OF THE BEST AVAILABLE AVENUES FOR INVESTMENTS TO SMALL INVESTORS TO LARGE INSTITUTIONAL PLAYERS. THE STOCK-MARKET INVESTMENTS MADE IN MULTI-BAGGER COMPANIES, MANY A TIMES REWARD INVESTORS WITH MANY FOLD RETURNS TO THOSE WHO “SPOT THE RIGHT OPPORTUNITY AT THE RIGHT PRICE” AND POSITION THEIR INVESTMENTS ACCORDINGLY.

• The multi-bagger companies carry a unique business model with high-end products&services and less competition "Buyer Requests & Seller Demands" mode.

Ex: 8K Miles (Rs 18 Low in 2012,Rs 2550 High in 2016)

• Once, well-established companies ran into doldrums with underutilized capacities, later get a new drive, turn-around story with better economic prospects to garner the unfolding opportunities.

Ex: INDO COUNT INDUSTRIES (Rs 5.0+ Low in 2012,Rs 1248+High in 2016)

• Management rejuvenate their entire team with positive energies to increase revenue and profitability with 20-35% QoQ growth.
• The stock hardly falls from the consolidated floor price range gained in its upward journey

Conclusion: There are many good stocks available in Indian stock markets to become multi-baggers in next 3-5 Yrs. It is very important to identify good stocks to BUY and Hold, but at right price is even more important.

HUGE DERENCE ORDERS WORTH 2.5 TRILLIONS!!

Manohar Parrikar says orders worth Rs2.5 trillion placed for modernization of defence sector

Defence minister Manohar Parrikar says defence budget is currently about 1.65% of GDP and he would like it to be 3% but it wouldn’t happen overnight

New Delhi: Defence minister Manohar Parrikar on Friday said that orders worth nearly Rs2.5 trillion have already been placed to modernize defence forces under his tenure and this figure would soon touch Rs3 trillion.

 Speaking at the Hindustan Times Leadership Summit, Parrikar said there was a backlog of defence orders worth Rs583,000 crore, some of them pending for over 10-12 years. 

 He said many of these are being cleared but he cannot order as per will as defence budgets are to be taken into consideration. Typically anything brought has costs spread over 5-7 years or more. 

 The military budget is currently about 1.65% of the gross domestic product and Parrikar said he would like it to be 3%, but he conceded it would not happen overnight. 

 India has become the world’s fourth largest spender on defence, following a 13.1% increase in its 2016-17 defence budget, according to US research firm IHS Inc. 

 India’s rise in the rankings from sixth position last year is a result of an increase in expenditure to $50.7 billion, combined with cuts to military spending by Russia and Saudi Arabia, where low oil prices have put considerable strain on their finances. 

 According to a report released by PricewaterhouseCoopers Pvt. Ltd, India ranks among the top 10 countries in the world in terms of its military expenditure and import of defence equipment—only 35% of defence equipment is manufactured in India, mainly by public sector units. 

  Parrikar said his target is to bring greater synergies and understanding between the armed forces and defence ministry over the next six months in matters related to procurement and what is required by the forces.

 The defence minister also said that the surgical strikes in Pakistan-occupied Kashmir by the Indian Army had introduced a "principle of uncertainty" in the minds of the adversary and did not rule out more such strikes. 

  “The surgical strikes have introduced a degree of uncertainty... obviously, uncertainty itself creates decision-making bottlenecks. You will never know them,” the defence minister said. “It was a continuous insult to be treated like this... Someone comes, hits us and we can’t do anything.”

 Asked if India could carry out more surgical strikes, Parrikar said the “principle of uncertainty” should be allowed to operate. “It will be beneficial to all of us.” 

 On an attack in Nagrota that left seven soldiers dead on Tuesday, Parrikar said it was obvious that “some sort of lethargy” had set in over a period of time and it was “painful to see soldiers die.” 

 "We have to thing out of the box," Parrikar said on how to secure our military installations from more terrorist attacks. He said help of agencies like DRDO was being taken. DRDO has been asked to look into various kinds of high tech fencing.

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http://www.livemint.com/Politics/EpJSaDBGYECi221Ul4OYqL/Manohar-Parrikar-says-orders-worth-Rs25-trillion-placed-for.html

HOUSING DEMAND..!!

Housing for all gets Rs 82,000 cr boost

By KA Badarinath Mar 24 2016 , New Delhi

Tags: Policy

Govt to use socio-economic data to spot beneficiaries

The central government’s ambitious ‘housing for all by 2022’ plan got its most major boost on Wednesday. The Union cabinet gave its green signal to prime minister Narendra Modi’s pet initiative to build one crore pucca houses in rural India with an investment of Rs 82,000 crore in the next three years.

Briefing newsmen, communications minister Ravishankar Prasad said all poor people — below or above poverty line — without houses or those living in dilapidated houses, would be eligible for financial assistance under the pradhan mantri awaas yojana (PMAY).

Huge investment planned for rural housing is expected to give a big boost to the construction industry, 250 other ancillary industries, generate millions of semi-skilled and unskilled job opportunities, apart from spreading transport services in rural areas.

The government expects that houses for rural poor would positively impact education and health apart from nutrition, sanitation and over all economic security.

President Pranab Mukherjee in his address to Parliament on May 2014 gave the first hint of government’s resolve to provide houses for all by 2022 with water, electricity, sanitation and access to public services.

Finance minister Arun Jaitley followed up this address with an action plan in his budget for 2014-15.

Under the project, rural houses would be built across the country, barring Delhi and Chandigarh, where the cost would be shared between the Centre and states in the ratio of 60:40.

In northeastern states and hilly areas, the Centre will pay for 90 per cent of the construction costs, while 10 per cent cost would be borne by states. Hitherto, Indira awaas yojana, under which assistance up to Rs 75,000 per household was available, would now be subsumed into the PMAY. Under the earlier scheme, about 351 lakh houses were built with an investment of over Rs 100,000 crore.

Under PMAY, Rs 1.2 lakh would be provided as assistance to those seeking to build houses on plains. This amount will be enhanced to Rs 1.3 lakh per family in inhospitable terrain and hilly areas. Apart from budgetary funds, additional finances worth Rs 21,975 crore will be mobilised through Nab­ard to be amortised through annual budgets after 2022.

The government will use socio-economic and caste census data of 2011 to identify rural beneficiaries for houses under the project. It will also set up a technical su­pport agency to ensure that one crore houses are constructed. To ensure transparency, the government plans to get the list of beneficiaries vetted by gram sabhas. Village panchayats will offer reasons for any changes made to this list.

badarinath@mydigitalfc.com

http://www.mydigitalfc.com/policy/housing-all-gets-rs-82000-cr-boost-065
badarinath@mydigitalfc.com