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STOCK
Passline News Service
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owadays, the premises of plush broking houses are almost deserted. A month or two ago, they were crowded with jubilant retail investors who were calculating their earnings and discussing the future of their favourite shares as well as the Indian and global economy.
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Global and domestic happenings will influence the market to some extend, but the main cause for the latest downfall of market is immaturity of the investors. Retail investors totally rely on the tips instead of looking at the fundamentals of the companies. The media is playing a major role in this by giving tips to the investors, and most of these tips are incorrect. Most retail investors, who are in a majority, go by these tips and eventually lose their money.
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retail investors, who are in a majority, go by these tips and eventually lose their money.”
uct for daily use, the value of which will never diminish because the market for the toothpaste will “A good investor,” never come down. SBI asserts Bhuvanendran, is the third largest “should focus on the core areas of the invest- Bhuvanendran bank in the world, with thousands of ing company and not on branches and billions of rupees the scrips of that company. The stock will be volatile always for as net worth. Indian companies
fundamentally stronger than foreign companies to invest. There are Kerala-based companies like Muthoot, Manappuram, VGuard and SIB – which are growing fast and these are opportunities at our doorstep.”
According to Bhuvanendran, an investment of Rs 10,000 in Wipro shares 30 years ago should have fetched Rs 485 crore now; (see box) same Now the trading is the case of Infosyis and Rs 10,000 invested in 100 shares of Wipro in 1980 undergone volume of most of the other Indian blue chip comthe following process broking houses have panies. Our people should plummeted and their reduce spending, particuYear Process Shares Year Process Shares margins are at stake. larly for luxury items, and 1981 Bonus 1:1 200 1985 Bonus 1:1 400 What are the reasons cultivate the investment for this? Are the crises 1986 Split to FV 10 4000 1987 Bonus 1:1 8000 habit. There are a lot of in the United States, malls and big hotels com1989 Bonus 1:1 16000 1992 Bonus 1:1 32000 Europe and West Asia ing up that can empty the 1995 Bonus 1:1 64000 1997 Bonus 1:2 192000 to blame? Or, are the pockets of the middle-class domestic, economic, 1999 Split to FV 2 960000 2004 Bonus 1:2 2880000 and the disposable-inpolitical or social iscome group. We must be 2005 Bonus 1:1 5760000 2010 Bonus 3:2 9600000 sues the culprits? careful about it, otherwise, and grown to Rs 435 Crores ( 96,00,000 shares x Price of one share) within a short time, India These issues may also will be caught in the make a scar on the skin of the reasons other than the like Maruti and Mahindra, or the debt trap like the developed Indian economy, but will not pen- company’s strength. If a person blue chip IT companies all are countries in the West. etrate into the flesh and cause is ready for a long-time investfatal injuries. ment, he will never burn his finWho are responsible for the gers. Only the long-term and recent plight of our stock mar- systematic investors stand to ket? In fact, we are to blame: the gain. You take any available inmajority of retail investors who vestment opportunities, or operalways depend on tips, specu- ate a business venture of your lations and easy money. own – all have risk factors. But, How can one become a in stock investment, you will have smart, intelligent investor? some hidden advantages: you Bhuvanendran, CEO of Hedge can invest in different companies Equities, says: “No expertise or depending on the strength of the help is needed to assess the company as well as your capacsituation. A person having mini- ity. This need not require expermum intelligence and ability for tise on your part to look after your observation of surroundings can investment in a company since easily become a good investor there are experts and professionwithout draining his/her assets.” als in that particular company to make sure that your investment According to Bhuvanendran, grows. On the contrary, in own “global and domestic happenventure, one must work hard to ings will influence the market to get profit and should appoint exsome extend, but the main perts. If an investor is a good cause for the latest downfall of observer of the surroundings, he market is immaturity of the inwill certainly survive.” vestors. Retail investors totally Bhuvanendran believes that rely on the tips instead of lookthere are opportunities for us in ing at the fundamentals of the the US imbroglio. He continues: companies. The media is play“We need not invest in foreign ing a major role in this by giving companies. Take the case of tips to the investors, and most Colgate – toothpaste is a prodof these tips are incorrect. Most PASSLINE
August 31-September 30, 2011