So you want to make money in equities? or do you want to talk about many shares in the market?
You must be clear about these above 2 questions. Recently I met somebody who wanted to invest about Rs 10-15L – I had just given him 3-4 names. He wanted more. He wanted about 8 companies in which he would invest Rs. 15L – about Rs. 2L per company.
And he had no clue why – and I was asking him to buy Bharti Airtel, Reliance – kinda shares. One person buying 2k shares would have done NOTHING to the price of the share, but he was not in a mood to put more than Rs. 2L in one share. I showed him portfolios with 50k shares of big companies -where people had Rs. 30L – Rs. 1 crore in one company, but he could not fathom something like that.
It is not easy to build a portfolio, but you cannot be looking for 8 companies if all you have is Rs. 15L. Max this portfolio should contain is about 4-5 shares. My take – of course each one of us is different.
What is required to make money on the stock exchange?
1. Low entry costs: I have entered many stocks at very low levels, and would stick to them even during a bad period. The sheer dividends makes it worthwhile to do so. For e.g. I have NTPC bought at Rs. 90. It allows me to sell, buy back, etc. but the willingness to hold comes from the low cost – which means there is a very decent dividend yield – the rewards for holding.
2. Low Price Earnings: Apollo Hospital, Coromandel International, Eid parry, Cholamandalam finance, Shriram Transport Finance (exited much earlier), VIP Industries, etc. in my portfolio were yield shares not very long ago. It will still work, and please do try the same.
3. Insider buying: when executives (and owners) buy big time, it is a good indication of it being a good buy. HOWEVER U SHOULD do your own research – there are some stupid managers all over the world.
try these 3, will tell u more….
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