what is stock market?// TO BE AN EXPERT

TO BE AN EXPERT

1. Technical analysis
2. Follow Some expert

Technical analysis

- Technical analysis is a method used to predict the future stock price movement using historic data. In this method, the financials of a company or not taken account of while deciding on buying or selling a stock. In technical analysis, the pattern of price and volumes of a stock traded are the key parameters. There are many types of charts and methods used in technical analysis which will be discussed in next chapters. A technical analyst believes that a stock or market moves in a predictible pattern untill a set of rules get changed. Technical analysis may be very useful if you can compare the predictions made using the fundamental analysis. Critics of tech analysis like well known Warren Buffett opines technical analysis in his own words "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer" and "If past history was all there was to the game, the richest people would be librarians."

Follow :

- Technical analysis is a method used to predict the future stock price movement using historic data 10-20 Years, suppose some one invented some money ex $10,000 milliom a many year ago then is worth $ 30 million today. The same money if you had invested in some bank or post then 500 would have been just 0.5 million. This gives the sole reason why I recommend every investor before investing in any company go through the company details, to become a success full investor just follow this footsteps. But most of his strategies are completely not revealed. But we will try to extract few, from time to time investments etc. 1. Value Investing: This is the key. Different investors use different methods to find the intrinsic value of a company and compare it with the market value. If there is a huge discounting in the stock price, it comes to value picks category. s "In the short term the market is a popularity contest; in the long term it is a weighing machine." Just apply this to a company stock; you will know how far you have improved your approach. 2. Past growth: How a company has given returns on equity over last 5,10 years is an important factor. 3. Growth consistency: A consistent growth in top line and bottom line. That is growth in net sales and net profit. Intrinsic value put simply may be 'what value each share will get, if the company is liquidated today.'

THIS IS AN SMALL JUST A SMALL INTRODUCTION OF STOCK MARKET

If you don’t follow the stock market, you are missing some amazing drama.
------------------BY Mark Cuban

My friend is My DAD, and i learn this knowledge from my dad only and i trying to give u some small knowledge that i have about stock market.....
and this is my first blog so plz help me and i also thanks some sites that help me a lot

ALSO AS WELL IF I GET SOME INFORMATION ON STOCK MARKET DEFINITELY I WILL MENTION HERE.........SO BE WITH US.

what is stock market?// knowledge

HOW TO BUILD KNOWLEDGE :

• Fundamental analysis
• Introduction to Fundamental analysis
• Dividend
• Financial Result
• Book Value of a stock

Fundamental analysis

- Fundamental analysis means analyzing the well being of a company or an industry or an economy. There are no hard and fast rules but neglecting some of the key issues may be fatal for your investments. In this section we will be discussing in short many of the factors, ratios etc. to make you an able person to decide whether a company/industry/economy is healthy or not.

Introduction to Fundamental analysis

-The basic need for any type of analysis is to find the ways to make profit and cut losses. We will here talk about stock market related factors. so a good practice is to finalize the economy where you invest. Economy is the country's fundamentals. It involves the analysis of people behind making economic policies, their track record, the governing laws that drive the economy etc. Next, you better narrow down your focus on the industry buy analyzing the demand - supply gap, laws of the economy with respect to the chosen industry, the raw material and labor availability, the market for the products, forecast on the price movements of the end products in the industry etc. Now you need to narrow down your search to few companies, which will excel or continue to excel in the industry you have chosen. This involves looking into financial data, management background, the competition and the concepts they use. In the next topics we will cover all these in detail.

Dividend

- "diluted earnings per share" is the more trustworthy unit of knowing the worth of a stock. The diluted as the term suggests is the earnings per share calculated on today's net profit divided by the number of shares if all convertible securities are converted into equity shares on a future date. That is if the stock has reported a net profit of 20 millions this fiscal and has issued 5 million shares, then Earnings per share stand at 4. Now if comny has issued 1 million fully convertible debentures at a specified price on a future date which will be coverted to another 5 million shares then "diluted earnings per share' will stand at 2 per share. This is just an indication but the effect of equity dilution may be overcome by increase in revenues, reduction in interest paid on these debentures etc.

Use of Financial statements and results in analyzing a stock value.

- One may not become an accounts expert for investing in stocks. But it is a blunder to invest without atleast understanding few important terminologies. The basic need for our alalysis of balance sheet is to determine the maintainability of profits by a company in long run. So all our scruitiny mainly depend on the growth figures. For an example, if a company has earned a profit of say 20 million and out of this say 10 million has come from profits by selling a fixed asset. So we will be negating this 10 million for our purposes of calculating EPS and hence the PE Ratios because this income can not be repeated again in coming years. Another important factor is to look at operating margins. A company should have a fair profit margin. This means a minor fluctuation in selling prices can not greatly effet the net profits.

Book Value of a stock

- The book value of a stock is the actual worth of the stock as in company books. That is the net asset of a company after deducting all liabilities divided by the number of Stocks of the company. By general knowledge you may say that the company shares should be traded at the book value. But as a stock analyst this may not be a fair thing to say. You need to couple Book Value and EPS to arive at a fair price of a stock. Take for example, a stock has a book value of 100 and its EPS is 12. Also the company EPS is growing at a rate of 15% per year. This will mean that the company book value will be on rise in future too. So at the end of year 1 we are very sure that the book value will stand at 115, 2nd year 132.25 and so on. So you approximately know that by 4 years the book value will be around 200. Thus when your other investments may be at say 120, your BV will be 200. Thus you may discount the current book value by a fair factor.

what is stock market?// HOW TO START

HOW TO START

• Setting up a bussiness:
• What is Stock?
• What is bebt?
• Secondary market?
• Stock Broker
• Bonus Shares
• Right Shares

Setting up a bussiness:

-Irrespective of which part of the world you plan to set up your business, your business needs funds. So now say you need a funds of 100 curreny units to start your business. If you have all the 100 bugs, you will be easily able to setup your business. Imagine you have 60 bugs and decide to get the remaining 40 from an outsider. You have 2 ways of making him invest. 1. Either you ask him to invest 40$ (imagining the business is in US) and give him a regular interest. Return his money when you can. 2. Or ask him to give you 40$ and give him a pro-rata share in profits and return his money evaluating the worth of the company once both of you decide. Again on pro-data basis. The first method is called debt. The second method is called Equity. The amount considered here is a low 100$ and you will get a single person to give you the required 40$. Usually the amount required to set up great industries runs into billions and you may not be able to find a single entity to invest the entire money. Thus the need comes to ask more people. Different laws exist in different countries to deal with this. But the principle purpose remains the same.

What is Stock?

- As explained in the previous topic, Imagine a business is set up with initial investment of say 10 billion. The promoter, the person who starts this venture has say 40 billion and needs another 60 billion. So he may opt for getting this amount from public in a country. So he will get the government permission for the same explaining the authorities the need. This investors along with the promoter is called share holders, which directly mean that they are pro data share holders in the new company and they will be eligible for the profit share or any other benefit that may company get in future. Note that, this also means that they will be eligible for the losses too. But, one point to note is that the loss will be only up to the level of their investment. That means a person will not be asked again to give money to fill up the losses. This 100 billion is split into X stocks of face value y , where x X y = 100 billions.

What is a debt?

- "An amount owed for funds borrowed. The debt may be owed to an organization's own reserves, individuals, banks, or other institutions. The debt is normally secured by a note or bond or mortgage or other instrument that states repayment and interest provisions. The note, in turn, may be secured by a lien against property or other assets." With respect to stock markets, a company may have debt in the form of secured/unsecured loans, bond issues.

Stock markets - trading

- After a company issues its securities either in an IPO or subsequent issues, What if an investor needs money or wants to en-cash the profits made by the company or wants to stop ongoing losses in the investment? Secondary stock markets have been set up around the world almost in all countries to facilitate an investor to sell his securities to another interested investor. Unlike IPOs where the offer price is fixed while issuing, here the rates are market driven. Which means a share can trade at a price agreed between the buyer and the seller. Some of the stock exchanges are New York Stock Exchange, NASDAQ, London stock exchange, Paris Stock Exchange, Bombay Stock Exchange.

Stock Broker / Stockbroker

- A stockbroker or Brokerage house is a entity affiliated to a stock market who bridges the gap between an investor and a stock market to buy or sell stocks and shares. Now a days most of the brokers facilitate "online trading" which facilitates you to trade online from home if you have an Internet connection. Finding a trustworthy stockbroker is most important to avoid frauds and losses due to misguiding.

Issue of Bonus shares

- A company issue shares in lieu for cash or sometimes against transfer of physical or intellectual property to the company's hands. But bonus shares are issued to the existing shareholders by converting free reserves or share premium account to equity capital without taking any consideration from investors. Bonus shares do not directly affect a company's performance. Bonus issue has following major effects. 1. Share capital gets increased according to the bonus issue ratio. 2. Liquidity in the stock increases. 3. Effective Earnings per share, Book Value and other per share values stand reduced. 4. Markets take the action usually as a favorable act. 5. Market price gets adjusted on issue of bonus shares. 6. Accumulated profits get reduced.

Issue of Rights

-An issue of securities to the existing shareholders with the right resting on the investor either to accept or reject the offer. A corporation/company usually offers a rights issue to the existing shareholders an option to buy new shares of the company at a predetermined price usually at a discount to the existing market price in a pre fixed ratio. A rights issue will be of the form, issue of x number of shares to the existing shareholders at a price of y per share in the ratio of n shares for every y shares held as on date D. A rights issue has the following effects on the price of a stock. 1. Share capital gets increased according to the rights issue ratio. 2. Liquidity in the stock increases. 3. Effective Earnings per share, Book Value and other per share values stand reduced. 4. Markets take the action usually as a favorable act. 5. Market price gets adjusted on issue of rights shares. 6. Company gets better cash flow which may be used to improve the business and may help increase effective Earnings per share. 7. Usually a shareholder may not back out from applying for the rights issue unless the offer is almost same as the prevailing market price. This is because if a stock is trading at 100 and a rights issue in the ratio 1:1 at a price of 40 will make the stock trade at 70 soon after the ex-rights date.