10 Stock Investing tips in Warren Buffett way

Share |

From the time when my interests in Stock markets everincreased, I always wanted to know how the legendary investor Warren Buffett invested in stock markets. There are so many people who invest their money in stock markets but still none of them has come even closer to the future which Warren Buffett has made out of investing in Share markets in USA, There are few things which are different between today's normal investor's(In which all TV channels analysts and modern day investors come), and the other is Warren Buffett.

I have read the Book "The Warren Buffett Way" and recommend reading this book for all the fellow investors and followers. You can also gain some insight from best books for stock markets available today and my take from "The Warren Buffett way" book can be read here.

This post is dedicated to legendary stock investor Warren Buffett, and describes 10 stock investing tips which are non-failing and are followed by Warren Buffett or are derived from his life style and analysis of the stock markets, Do remember that his worth of >50 billion has come from investing in stock markets for long term.

So here are the 10 stock market investing tips or the Warren Buffett way of investing:

1. Be Self-Dependent : Stock investment is one field where a person should not depend on any body else for some sort of advice as there is no gurranteed advise in stock market investing, One should invest by following his/her own intellect/analysis and should remain away from stock market advisors as according to me they are sheer fools who dont know anything and put our hard earned money into risk.

2. Be Simple-live Simple - Extravagant lifestyles make a person a money guzzler, and chances of having such lifestyle are too high if in past you have made some fast bucks from stock markets thinking that you will always make profit out of it.
Warren Buffett is following a simpler lifestyle and focuses on investing in correct stock by sheer analysis and forgetting about all the worldly pleasures which are simply nothing but insane. Living a simple life would help in having more money for more investing.

3. Invest in stocks you know - Like the legendary investor Warren Buffett one should always invest in companies whose working is familiar to him/her, this reduces the risk of failure/loss while making the investment decision.

4. Make your own path - For making huge profits from the stock markets one should not go with the crowd, most of analyst out there are strictly short term once and nonreliable, dont simply do what all are doing and remember due to such shortsightness in stock markets the SENSEX come down to 14k levels couple of years back, just follow what your brain says without any concern about anybody.

5. Believe in Indian Economy - Anybody who wants to invest in Indian stock markets should not consider change of govt or any emergency as time to sell the stocks, always have faith in economy as the fundamentals of indian economy are very strong as grey economy runs alongwith legal economic data, this was the reason why indian Companies hardly went into any type of recession.

6. Buy when stock is undervalued - The best time to buy a stock for long term is when all others are selling it, this is time when the stock would be undervalued and you can make huge returns on your investment. Buffett doesn't pay much attention to earnings per share, a common measure of value. Instead, he likes to see companies with good return on equity, solid operating margins and reasonable or no debt.

7. Invest in Innovative company - According to Warren Buffett one should always look for companies which are very active innovator and have patents in their field, the problem with indian companies is that these are more copycats and no innovators but still invest in companies which are holding patents in their fields as such patents keep competitors at bay.

8. Purchase huge stocks - Most of the investment companies in india wants to do diversified stock investment for minimising the losses, but if a person has to make big bucks then he should keep on purchasing the stock which he has well analysed and should not diversify, this is again thinking different from the crowd.

9. Be a lifetime player - Whosoever said that stocks are meant to be sold is a fool, always keep on adding the stocks without thinking about selling, if you purchase a stock by keeping selling in mind then you would probably make mistake in both the tasks.

10. Wait for Stock market crash - One should always wait for the stock market crash and should think this as oppurtunity to purchase even more stocks, Market crashes bring the stocks to minimal levels thus making all of them undervalued just because of some temporary economic fluctuation, just wait for such time and purchase.

Indian Stocks close in red | LIC housing, PNB, Central bank nosedives

Share |

As news about CBI arresting some of the top management of LIC housing finance, Punjab National bank and Central bank over scam in home loans allotment reached the Dalal Street, The impact was immediate. Stock prices of the LIC housing finance tumbled and were down by a whopping 18.88 percent, whereas stock prices of other PSU banks also nosedived as investors wanted to safeguard their money. Stock prices of Central Bank of India nosedived by over 8 percent and that of Punjab national bank also fell by 2.33 percent at closing today. Makes me think whether all the PSU's working is crystal clear?? I think if we investigate each and every PSU balance sheets there would be inflated numbers in liabilities for sure which actually might not exist at all, so people who have invested in PSU thinking as safer option might lose their money until government of India finally take over them for safeguarding the stakeholders...what an Irony in indian stock markets.

Already Indian stock markets are the most volatile stock markets of world and such news further makes the investors think whether the present price levels are actually fit or are overpriced, Investing in such volatile conditions requires great analytic acumen and the 3 most important tips for investing in volatile markets(read full post)

Coming back to the stock market's todays report, the impact was obvious BSE bankex fell by nearly 3 percent today. The Bombay Stock Exchange's benchmark index Sensex closed at 19459.85, down by huge 231.99 points. The 30-share index touched high of 19835.57 during intraday trading today.

The broader index National Stock Exchange's Nifty was no different and closed at 5865.75, down by 69 points and touched a low of 5833.60 in day trading today.

The stock prices of all the PSU's whose working is under CBI radar are all set to fall further tomorrow as well until the finance ministry makes some strong statement for protecting the shareholder's interests.

28 SENSEX Components closes in red today

Share |

With Korean fears engulfing indian Stock markets through out the day, Out of 30 components of The SENSEX closed in red at EOD and only two components managed to be on other side.
For complete post on Indian Stock Markets todayclick here.

The detailed report card of SENSEX for today is as follows:

SENSEX	23 Nov 17:30
Company Name	Industry	LastPrice	Change	% Chg	Mkt Cap(Rs cr)	Weight
ACC	Cement - Major	1,004.95	-20.55	-2.00	18,887.03	0.64
Bharti Airtel	Telecommunications - Service	329.15	-7.75	-2.30	124,995.70	4.25
BHEL	Engineering - Heavy	2,257.50	-13.50	-0.59	110,509.14	3.76
Cipla	Pharmaceuticals	345.40	-2.65	-0.76	27,732.90	0.94
DLF	Construction & Contracting - Real Estate	314.80	-3.55	-1.12	53,435.15	1.82
HDFC	Finance - Housing	704.80	-10.90	-1.52	103,068.30	3.51
HDFC Bank	Banks - Private Sector	2,370.35	-3.20	-0.13	109,791.19	3.74
Hero Honda	Auto - 2 & 3 Wheelers	1,953.05	-0.80	-0.04	38,999.97	1.33
Hindalco	Aluminium	210.60	-4.50	-2.09	40,298.60	1.37
HUL	Personal Care	300.35	1.00	0.33	65,545.98	2.23
ICICI Bank	Banks - Private Sector	1,156.65	-23.00	-1.95	133,110.75	4.53
Infosys	Computers - Software	3,013.30	-28.80	-0.95	172,973.87	5.89
ITC	Cigarettes	172.40	-3.45	-1.96	132,600.74	4.51
Jaiprakash Asso	Construction & Contracting - Civil	123.70	-1.65	-1.32	26,303.98	0.90
Jindal Steel	Steel - Sponge Iron	649.20	-9.15	-1.39	60,631.58	2.06
Larsen	Engineering - Heavy	2,040.95	-0.40	-0.02	124,049.96	4.22
Mah and Mah	Auto - Cars & Jeeps	759.70	-6.65	-0.87	45,058.47	1.53
Maruti Suzuki	Auto - Cars & Jeeps	1,438.85	19.10	1.35	41,569.82	1.41
NTPC	Power - Generation/Distribution	180.00	-3.15	-1.72	148,418.36	5.05
ONGC	Oil Drilling And Exploration	1,270.90	-25.85	-1.99	271,829.31	9.25
Reliance	Refineries	994.90	-17.20	-1.70	325,569.31	11.08
Reliance Comm	Telecommunications - Service	146.05	-3.25	-2.18	30,145.11	1.03
Reliance Infra	Power - Generation/Distribution	937.30	-9.85	-1.04	22,951.69	0.78
SBI	Banks - Public Sector	2,952.60	-86.00	-2.83	187,489.54	6.38
Sterlite Ind	Metals - Non Ferrous	171.60	-3.70	-2.11	57,685.08	1.96
Tata Motors	Auto - LCVs/HCVs	1,213.65	-14.30	-1.16	74,164.37	2.52
Tata Power	Power - Generation/Distribution	1,301.65	-40.80	-3.04	30,889.10	1.05
Tata Steel	Steel - Large	612.05	-11.15	-1.79	55,220.02	1.88
TCS	Computers - Software	1,032.20	-8.80	-0.85	202,024.35	6.88
Wipro	Computers - Software	417.20	-1.15	-0.27	102,297.44	3.48

Indian Stock markets nosedives on Korean fears

Share |

Indian Markets booked profits as investors took advantage of financial and some minor military turbulance between North Korea and South Korea, Financial condition of Ireland also added fuel to fire, I mean the fire of selling, at one point the 30 component benchmark index SENSEX was down by over 500 points during intraday trading, The sudden drop and immediate stability from 600 points to just 265 points at closing shows the DNA of highly volatile Indian Stock Markets.

30-share BSE index dropped 1.33 percent, or 265.75 points, to 19,691.84 at EOD, and 28 components were in red at closing today.

The National Stock Exchange's NIFTY also nosedived by 1.25 percent to close at 5934.75

NIFTY above 6K | SENSEX just shy of 21K - up 2 percent

Share |

Major Indian stock indices closed above the psychological levels with both BSE and NSE closing up by over 2 percent, Indian stock markets got a boost from global stock markets, but may see some selling for profit booking in coming trading days of this week.

The broader index National Stock Exchange’s Nifty closed at 6010, up 119.70 points. The index touched high of 6020.25 and low of 5905.15 during day trading today.

The 30 component benchmark index Bombay Stock Exchange’s Sensex closed at 19957.59, up 372.15 points which is nearly 2 percent. The large cap index touched a high of 19989.02 during trading hours today.

All the sectoral indices were also in green at closing time, the individual sectoral indices details are given below:
BSE Bankex moved 2.64 percent higher, BSE IT Index rose 2.50 percent and BSE Realty Index was up 2.01 percent.

Top 3 investing tips for Volatile Stock Markets

Share |

We all know that Indian Stock Markets are one of the most volatile markets of world and correct prediction of Indian Stock markets is not easy at all and any person who says confidently that he can understand Indian Stock Markets correctly and hundred percent profit gurrantee if someone invested through him/her is simply making fool of the Amateur investor who goes to him for advice. One should always be careful if he comes across such investment agency or person, you can seriously lose your hard earned money.

I am trying to put some light on the best 3 investing tips for such volatile stock markets, but don't forget to use your own brain too along with these top tips for investing in Volatile stock markets.

So The top 3 investing tips for Volatile stock markets is following:

1. Diversify your investment - The best strategy to minimise risk of loss(If it happens) is to diversify while investing, which means that you should not invest whole of the monesy available in one single stock or I would say not even in a single sector too. The reason is that if you invest all of your hard earned money into one stock or sector, the chances of loosing whole of the money are too high if that sector becomes bearish. It is always better to diversify your investment for eg- If investor wants to invest 100,000 rupees into stock markets (which are very volatile, like the Indian Stock markets). He can break the amount into parts and then invest in different sectors thus making probability of loosing whole money very less, you can invest 25k in FMCG, 25000 in IT, 25000 in banking, 25000 in Auto sector stocks.

2. Expel the word 'Panic' out - The golden rule to any investment which involves some amount of risk is 'DON'T PANIC' if you follow these two golden words then you will definitly make profits, and always be a long term investor , Remember short term investment decisions are more prone to losses as compared to carefully analysed long term decisions in stock market investing. The worst thing you can do as an investor is panic and sell everything and then wait for the market to recover. Always remember "Buy low Sell high" should be motto in stock market investing.

3. Rebalance your investment - This tip requires some logical and analytical ability from the investor but would help in bringing the probability of risk down to maybe even zero percent. I would try to explain this tip with help of an example(feel free to comment in case you need more explanation).
Consider a person wants to invest 50,000 INR and he is not sure what percent he should invest in stocks or bonds, Do remember that always invest only that amount in stocks which is inline with the risk you can afford. There should be a balance maintained between investing in stocks and investing in govt bonds. He decides to invest 35000(70 percent) in stock markets and remaining 15000(30 percent) in bonds, Now there can be strong probability that the stock markets gave higher return on investment then the bonds. Considering that the person reinvested the dividends and profits again in stocks would become a riskier affair because the percentage of money invested in stock markets would rise and could reach levels of 80 to 85 percent, This would mean that the investment is no longer inline with the risk which person could tolerate and he might loose huge money if there is a stock market crash in next year of investment.

Now at this time the investor should again rebalance the investment between the bonds and the stocks so that risk always remains inline with what he can afford to lose. He should invest adequate percent of money earned through dividends in bonds so that overall percentage of investment remains as initial(70:30::stocks:bonds).

Thus rebalancing the investment is very important while investing in volatile markets like Indian Stock markets

So before closing this post I would summarize that Indian Stock markets like The Bombay Stock Exchange and National Stock Exchange are very volatile and investor should follow these 3 tips for investing in such markets in order to minimisez the probability of losses.

For Best Stock investment tips you can read this post
HAPPY TRADING!!