Technicals & Fundamentals
BINESH CHAND BOTHRA
Technicals are by the minute,for the minute and of the minute whereas Fundamentals are for the years, years and years.
Technicals are market movement of the prices,chart, conditions, situation and demand supply position whereas fundamentals are policy of the govt. acceptance of the product in the market, management of the co.& past performance of the co. in question. Debt / equity ratio of the co. etc.
and the long term sustainability of the product and the co.
Technicals is following the movement in the market whereas Fundamentals is following the performance and valuation of a company.
People following technicals cant afford to do any thing other than sit in front of their screens and be alert every moment for every movement, because they play on momentum, whereas people following Fundamentals have the time in their stride to do whatever they want to do during market hours without bothering for the movement or the price fluctuations on a daily basis.
In trading even if you think you are right you may be wrong and make a loss.Whereas in investing in good and sound company even if you are wrong for a while but if you stay invested with patience you are bound to be right and make profit ultimately.
GDP IS LESS VOLATILE ,WHEREAS STOCK
MARKET IS VERY VOLATILE.
TOTAL VALUE OF GDP 2.9 TRILLION DOLLARS.
TOTAL MKT. CAP ALL STOCKS 2.4 TRI. DOLLARS
IF THE RATIO OF BOTH IS 1 THEN MARKET IS FAIRLY PRICED. IF IT IS .5 THEN IT IS CHEAP AND IF IT IS 1.5 THEN MKT. IS EXPENSIVE
YOU NEED TO TAKE INVESTMENT DECISIONS ACCORDINGLY.
STOCK MARKET IS NOT A PLACE OF CHANCE IT REQUIRES SKILL AND INTELLIGENCE TO MAKE MONEY WHEREAS CASINO IS ABSOLUTELY A PLACE OF CHANCE TO MAKE MONEY.
TRADERS TRADE ON PRICE MOVEMENTS WHICH IS OPEN FOR MANIPULATION BY OUTSIDERS, TECHNICALS, WHEREAS INVESTORS INVEST IN COMPANIES/ BUSINESSES WHICH CAN NOT BE MANIPULATED BY OUTSIDERS. FUNDAMENTALS.
THEREFORE ALWAYS TRY TO INVEST IN FUNDAMENTALLY GOOD COMPANIES IN TECHNICALLY WEAK MARKET TO REAP MAXIMUM GAINS IN LONG TERM .
IN STOCK MARKET IF YOU ENTER TO EARN MONEY BY TRADING IN STOCKS ON SHORT TERM BASIS THEN I AM AFRAID YOU MAY EVEN LOSE YOUR WHOLE CAPITAL WHEREAS IF YOU ENTER STOCK MARKET TO CREATE WEALTH ON LONG TERM BASIS BY INVESTING IN GOOD QUALITY COMPANIES THEN YOU ARE WISE BECAUSE YOU HAVE A REGULAR SOURCE OF INCOME TO SUSTAIN/MAINTAIN YOUR LIFE STYLE AND THE SURPLUS AMOUNT AFTER ALL THE EXPENSES WHICH YOU HAVE IN YOUR HAND IS INVESTED / PARKED
IN STOCK MARKET TO HEDGE AGAINST INFLATION.
DURING THE ENTIRE PERIOD OF YOUR HOLDING YOU RECEIVE DIVIDEND INCOME BY WAY OF REVENUE AND YOUR ENTIRE CAPITAL ENJOYS THE APPRECIATION BY WAY OF POWER OF COMPOUNDING.
MRF Rs400 TO Rs.88OOO
3M INDIA Rs10 TO Rs.25000
WIPRO 100 SHARES TO
OVER 2 CRORE SHARES.
THEREFORE WHEN YOU TRADE YOU NEED TO GIVE CONTINUOUS TIME AND MAY INVITE TENSION IN THE PROCESS TO EARN MONEY I.E.YOUR PHYSICAL EFFORT WHEREAS IF YOU INVEST YOU DON'T NEED YOUR PHYSICAL EFFORT BECAUSE YOUR COMPANY IS EARNING FOR YOU AND YOU CAN JUST SIT BACK AND RELAX AND DEVOTE YOUR PRECIOUS TIME IN YOUR JOB/ BUSINESS TO EARN MONEY FOR LIVING.
EVEN IF YOU INVEST ONCE IN A GOOD COMPANY AND PATIENTLY JUST WAIT AND WATCH FOR NEXT 30 TO 40 YEARS YOU CAN BECOME CROREPATI , I WILL GIVE YOU HISTORICAL FACT.
IN 1980 IF YOU HAD BOUGHT 1 SHARE OF WIPRO THEN TODAY YOU WOULD HAVE 220000 SHARES BY WAY OF SPLITS AND BONUSES IN YOUR FOLIO WITHOUT FURTHER SPENDING A SINGLE RUPEE AND THE MARKET VALUE OF THOSE SHARES ARE 9 CRORES IN 40 YEARS.
SIMILARLY IF YOU HAD BOUGHT 1 SHARE OF INFOSYS IN 1993 YOU WOULD HAVE 1100 SHARES IN YOUR FOLIO BY WAY OF BONUSES AND SPLITS NOW AND WHOSE MARKET VALUE IS 15 LAKHS IN 27 YEARS.THIS IS THE WONDER OF INVESTING IN STOCK MARKET.
SO JUST IDENTIFY SOME GOOD COMPANIES AND START INVESTING EVERY MONTH, MONTH ON MONTH,RELIGIOUSLY FOR EXPONENTIAL GROWTH AND CREATE ENORMOUS WEALTH.
NEVER TRY TO DABBLE AND PLAY WITH NUMBERS/FIGURES TO EARN MONEY BUT TRY TO INVEST IN BUSINESS/STOCK TO CREATE LONG TERM WEALTH.
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