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Thursday 24 April, 2008

Want to earn like Warren Buffett? ...24 tips







"An investor needs to do very few things right as long as he or she avoids big mistakes. " Warren Buffett

One of the world's most successful investors, Warren Buffett is the richest man on earth. Chairman of the Berkshire Hathaway, Buffett's wealth jumped by $10 billion to hit $62 billion during 2007. Buffett's life is an inspiration for investors across the globe.

So what makes the world's wealthiest man so rich? Buffett believes that successful investing is about having common sense, patience and independent research.

'How Buffett Does It', by James Pardoe is a great guide for investing in any market. A look into Buffett's simple, yet intelligent mantras for investing and minting millions.

1. A frugal billionaire Buffett believes in simplicity. He advises investors to take easy decisions. Never buy when you are doubtful. Invest only if you understand the businesses well.

2. Focus on not losing money rather than making it. Don't own any stock for 10 minutes that you wouldn't own for 10 years.


3. A proponent of value investing, he believes that one must take decisions on his own. He doesn't believe in listening to analysts or brokers. The best investing decisions come from oneself.

"It is not necessary to do extraordinary things to get extraordinary results."

4. Buffett advises to invest in 'old economy' businesses, companies, which have been around for fifty years and will continue to have a long innings.

5. We have often heard of people suffering heart attacks when markets crash. Well, Buffett advocates a sound temperament for stock market success.

6. You don't need to be a genius to succeed in the stock markets. People who can stay cool will succeed in the long run. Always keep in mind the hidden costs, from commissions on active stock trading to high mutual fund fees.

7. Buffett always looks at businesses he can understand, look at the profits in the past, long-term potential of the company, good top level management of the company and companies that have a good value proposition. The strategy is to think about the business in the long term.

"You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right."

8. Invest in businesses with great management. Always keep a track of the management of the company. The top decision makers have a lot to do with the company's performance.

9. One of Buffet's biggest strengths is independent thinking. Many people go by what the experts says or what others do but belief in one's own judgement is the key to stock market success.

10. Patience pays, says Buffet. He says one must not worry too much about the price of the stocks. What's more important is the nature of business of the company, earnings capability and its future potential.

11. Don't target just stocks, look at businesses. How a company performs is key to its stock market performance. You must know the track record of a company before you invest in it.

"Price is what you pay. Value is what you get."

12. Prices keep changing. Don't get worried by the ups and downs. Investing is all about creating wealth. It's important to understand the value of a stock than its price.

13. He believes that franchisee businesses are good opportunities to invest in. Avoid hi-tech, complex businesses. Look for businesses that are set to diversify and grow.

14. Never be disappointed when markets fall. Take it as a buying opportunity. Buffet says one must have lesser number of investments with more money in each lot.

15. He advises to avoid diversification. Invest in companies with sound business models. Choose a few good ones and stay invested, it will give you the benefits.

"I don't look to jump over 7-foot bars; I look around for 1-foot bars that I can step over."

16. Doing nothing pays at times! One must not jump at price fluctuations and take impulsive decisions.

17. Don't get carried away by market forecasts. Ignore market swings and remain an investor with a good business sense.

18. Buffett advises to be fearful when others are greedy and greedy when others are fearful. Buy when people are selling and sell when people are buying.

19. Make a list of companies, sectors that you find safe to invest in and try to stick to the list.

20. A sound business, strong management, good fundamental and low stock price should be a must-buy.

"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."

21. Try to ignore stock charts, says Buffett. They may not give the right indicators. A stock which may have done well earlier may not do so in future.

22. Buffet spends a lot of time on reading and more importantly thinking. Reading helps investors, so spend a lot of time reading about the stocks, companies and markets. A good investor must have a good knowledge base.

23. A good investor also needs to be efficient. Investors may have great capabilities but many do not make use of it. One needs to hone skills to meet the targets.

24. Good investors never rush to make money. They give time, thought and work on investment decisions. The mistakes that others make should be a lesson for you.

Monday 14 April, 2008

Free Trading Videos

Thursday 10 April, 2008

Stock Profit Calculator 2.1

Stock Profit Calculator 2.1
Stock Profit Calculator is the first equity calculator that lets your store buy and sell calculations for quick reference. All calculations are stored in an easy to read table that allows quick access for updates. The main calculator sections is freeware and never expires. You can unlock extra features for a nominal fee. Download the software for free and give it a shot.
Released: 2005-10-08
Last Updated: 2005-10-05
License: $29.99
Publisher: Stock Profit Calculator
Language: English
Platform: Windows
Requirements: Windows
Install: Install and Uninstall

Thursday 3 April, 2008

Swaps Show India to Raise Cash Ratio to 7-Year High, ICICI Says

India's interest-rate swaps show investors are bracing for central bank measures that may require banks to hold more money in reserve as policy makers seek to cool inflation from a 13-month high, ICICI Securities Ltd. said.
The cost of swaps due in one to five years rose the most in eight months on March 28 as banks bought them to guard against an increase in short-term borrowing costs caused by central bank actions to drain cash from the financial system, said Arvind Sampath, senior vice president at the unit of India's biggest lender by market value. The contracts show policy makers may raise the cash-reserve ratio as high as 8 percent at their next meeting, the most since May 2001, he said.

``What's getting priced into swaps is an escalation in short-term rates that would follow an increase in the cash reserve ratio,'' Mumbai-based Sampath said in an interview. ``Inflation is fueled by supply side factors, which can't be addressed by using interest rates directly. The central bank is more likely to resort to liquidity tightening.''

The Reserve Bank of India last raised the cash reserve ratio on Nov. 10, when it increased it half a percentage point to 7.5 percent. It was at 5.25 percent at the start of last year.

Swaps are derivative contracts used to hedge against rate fluctuations and involve the exchange of floating-rate and fixed-rate payments.

The cost of swaps due in one and two years climbed 22 basis points and 21 basis points respectively on March 28, the biggest advances since July according to data compiled by Bloomberg. Five-year swap rates rose 14 basis points, also the most in eight months. One-, two- and five-year swaps were at 7.09 percent, 7.02 percent and 7.20 percent respectively yesterday in Mumbai. A basis point is 0.01 percentage point.

Betting on Measures

``Bigger increases in short-dated swap rates show the market is betting on money-draining measures that will make short-term borrowings costlier,'' Sampath said.

Wholesale prices rose a faster-than-expected 6.68 percent in the week ended March 15 from a year earlier, the most in 13 months, the government said March 28. The inflation rate is ``unacceptably high'' and the central bank is ready to take action to contain price gains, Reserve Bank Governor Yaga Venugopal Reddy said March 31.

``Policy makers have to take steps to curb excess money in the coming weeks,'' Sampath said. ``Government spending will increase in April, boosting cash in the system. If they let the liquidity stay as it is, it will feed into inflation.''

Finance Minister Palaniappan Chidambaram plans to increase spending in the new fiscal year to spur economic growth that may have slowed for the first time since 2005. Asia's third-largest economy probably expanded 8.7 percent in the year ended March 31, according to a government forecast, compared with 9.6 percent the previous year, the fastest since 1989.

Money supply growth in India averaged 21.6 percent in the fiscal year ended March 31, above the central bank's target range of 17 percent to 17.5 percent, Reserve Bank data show.

Tuesday 1 April, 2008

Government unveils measures to fight inflation

In a slew of measures to combat inflation, the government on Monday decided to scrap import duty on crude palm and soya oils and ban export of non-basmati rice and pulses.

The decisions were taken at a meeting of the Cabinet Committee on Prices at Prime Minister Manmohan Singh's official residence in Delhi on Monday night.

The CCP approved ban on export of non-basmati rice with immediate effect and decided to extend the ban on pulses export for one more year from Monday, Finance Minister P Chidambaram told reporters after the meeting that lasted over three hours.

These decisions will come into effect from midnight tonight, but a notification would be issued on Tuesday, he said.

Chidambaram said all edible oils in crude form can be imported at zero duty, while the duty on oils in the refined form would be 7.5 per cent.

The government also decided to raise the Minimum Export Price of Basmati rice to $1,200 per ton from $1,100, to discourage export and increase availability in the domestic market.

It also cut import duty on butter and clarified butter (ghee) from 40 per cent to 30 per cent.

Besides, the CCP also decided to scrap import on maize from 15 per cent at present.

The Union government also advised states to impose limits on stocks of commodities under the Essential Commodities Act, besides asking steel producers not to raise prices.

Asked whether these measures would help in containing inflation, which has touched 6.68 per cent for the week ended March 15, Chidambaram said: "I sincerely hope so."

The meeting of CCP, which was attended by Commerce and Industry Minister Kamal Nath, Agriculture Minister Sharad Pawar, Railway Minister Lalu Prasad Yadav, besides Chidambaram, deferred a decision on duty reduction on iron and steel as Steel Minister Ram Vilas Paswan is away from the country.

The CCP was informed that the ministries of commerce and industry and steel are trying to bring together iron ore and steel producers to work out ways to moderate prices.

Steel producers have increased prices between Rs 3,500 to Rs 4,000 per tonne during the past three months, triggering concerns among dealers and realty developers.

The meeting between the two ministries and producers is likely to be convened on Tuesday or the day after, Chidambaram said.

On maize, he said zero duty would be applicable on import of up to five lakh tons.

He said only 5-6 states have started collecting data on stock position of various commodities, although the Centre had empowered them 18 months ago to impose "restrictions on stock limits under the Essential Commodities Act."

"There is a large onus upon state governments to exercise the power, which they wanted and which was given to them 18 months ago," Chidambaram said.

Earlier, the Left parties gave the government two weeks to work out measures for containing prices.

The Congress, which heads the multi-party United Progressive Alliance government, too decided to ask the government to ban futures trading in more farm items to keep prices under check.

Futures trading is already banned on staple commodities like rice, wheat and pulses -- urad and tur.

Also during the day, the Consumer Affairs Ministry called a meeting of the three national commodity exchanges on Monday to seek their views on whether a few more essential commodities like potato and edible oils be banned from the futures trading to check prices.