Monthly Archives: June 2008

28/06/2008
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Personal Finance, Stock Market

Entering Stock Market?

For all the techies who are interested in entering Stock Market.

Following are my suggestions.
Before entering stock market, try to play games which simulate Stock market. This will be a very good platform to learn. I am sure you will have a good time playing the game and also learn a lot from it. I always felt that it is better to start any learning process by playing as a game, it provides so much fun and also it helps us in learning the concepts. I started the wrong way, before getting thorough information about Stock market, I jumped into it and incurred losses. This was because I was not prepared for it. I was in a hurry to make money in Stock Market. I realized it is not as easy as it seemed to me once. I learnt the hard way.

To play simulated stock market, I suggest you to play at http://moneybhai.moneycontrol.com/. This is quite interesting, I am sure you will learn many concepts of investing over here. I personally like this site. This replicates the BSE and NSE.

Baby Steps towards investing in Stock Market!!

As everyone I was scared to get into the Stock Market. All that my dad said was, don’t get into stock market and lose your money. My friends said be careful buddy, it is a bad world out there. My first step towards the stock market was very important to me. I overcame the fear and was careful.

I would advice a newbie to make sure that he has the following qualities before he/she gets into stock market. One is fear and other is greed. Both are the most common qualities I came across in the Stock market. I was scared and was greedy. Hence you can’t just claim that you dont have these qualities. I had to struggle and lose money to realize that I had these qualities. Be prepared before you make your move.

The first step would be definitely overcoming the fear of losing money. When we start learning to drive our bicycle we fall. I am sure there is not a single soul on earth who has not fallen once while learning to drive bicycle (Are you an exception eh??). This is true with Stock market also. While learning we may or may not mistakes. I feel stock market works on Randomness. There is no theory which can guarantee you 100% returns on your investments. I was following nearly 8 news channels before investing on stocks and got to know that all 8 news channels are just waste. My opinion is Common sense and good judging capacity should be more than enough to make money in the Stock market. My first suggestion don’t bother about zillion things to buy a share. It is not worth it. It simply does not work that way. I am no financial expert but I too have tasted the success and failure in the stock market.

Next step would be not to be GREEDY.. I know everyone who is reading will be now thinking I don’t fall into that category and hence I need not worry about it. Whoever thought so right at this moment, am sure you are very greedy.. Take my word. I was of the opinion that I am not at all greedy. When I entered Stock market, I planned and all that, but my greed overpowered all my emotions and my thinking. I realized I am greedy. To realize this I lost money. Try it and then you will think I am right. I am sure that most of them will think I am just bluffing around, but what I said is Truth!

Now plan your investment strategy. I have a very clear path to investment strategy. My intension is I should get minimum of double the interest rate that bank pays on savings account (assumption bank pays 10% PA) i.e. atleast 20% returns on the investment. And for heaven sake don’t invest for tax reasons. If that is your intension, please don’t invest in stocks. Since you don’t get any tax breaks (I am sure everyone knows that!!). I hate when people invest for the purpose of saving tax. I feel that is not a good idea at all. I know most of us do that, but honestly I don’t think it is a good strategy. I know it is very hard to plan up the investment strategy. I would suggest you to start it, plan first for short term strategy. I define Short term to be anywhere between a month to six months (1 – 6). It is just for our convenience. Have a plan in short.

Next Step, when to exit? I always feel that investing in stock market is more or less like a game. ( I love playing too much, I love the risk and the stakes that Stock market offers. I know I can’t keep playing the game all day and night. So I have to stop playing some time. ) Why I suggest this is cause it is not a good idea to keep invested your money in Stock market. Since we have planned to enter the stock market, we should also plan to exit it. I generally exit after my purpose is achieved i.e. I get 20 % returns on my investment as per my strategy.

I am sure that you guys are very scared to lose money since that is what you have heard from your colleagues and neighbors and well wishers. I say you will make money so don’t be scared. Make your move. Have a positive attitude towards life. You never know what happens in the world of Stock Market, it is just Random. No one can predict exactly what will happen tomorrow. Cause if he is so sure of the behavior of the market I bet he would have invested crores to make 100’s of crores.

So please make an attempt to invest and don’t be scared.

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26/06/2008
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Review

Nokia taking over Symbian

I always thought that Nokia had interests in Symbian. Not a single soul would have predicted the Nokia’s smartest move in the decade i.e. Acquiring Symbian and making it OPEN. This is an open challenge to all the Mobile OS Companies to face the GIANT NOKIA. This may not be a very bad move for the OEMs because they all will be benefited with this path breaking move.

I always feel that No one does anything without self interests not even charity. People do charity to please themselves. There has to be some motives for Nokia to make such a drastic move. I am sure many would agree with this. But still not many ponder about it, since it does not fetch anything to them until unless you are an analyst. So basically everything happens with a motive. I love blogging hence this entry in my BLOG(my motive).

So why does Nokia acquire Symbian and make it free? How can one share the goodies with the competitors? (I believe in Live and Let Live) This is a ridiculous move then to most of them, since Nokia is wasting money on acquiring Symbian and losing money on licenses of S60 UI.
Still Nokia says it is going to do what it intends to do. There has to be something.

What I feel is this.
Nokia realized that being the world leader in the Smart phones and Mobile phones is not that big a deal since the margins in phone manufacturing is becoming drastically less day by day. So what better ways are there to ensure they can sustain in market and lead the pack? It is content and only content can be the next hottest happening thing in the mobile world and Nokia does not want to be left out. It has decided to hit the nail right on the head and I think it is perfectly a great move.

Wondering how this might happen?
First thing since mobile world has different flavors of OS, a need for unifying the OS platform and UI was needed. Nokia acquired Symbian and convinced Sony Ericsson and Motorola to provide the UIQ and NTT Docomo to provide the MOAP. Now we have one tested OS and three great UIs. Nokia achieved the Unification. If a developer develops an app to a smart phone he had to do either a native symbian app or two different versions to get S60 and UIQ customers, Third party developers can’t develop MOAP applications. Since MOAP is locked with NTT Docomo.
The situation changes now, the same developer develops just one app and he gets loads of customers (S60, UIQ, MOAP). The best part is, he gets even the MOAP customers which I feel is the greatest advantage. Since I feel Japan is only the place where smart phones are used the way it has to be used. So the developer gets the best of customers and he makes huge money. This is fine, but where does Nokia come into picture? Here comes Nokia, their intension is to ensure that Symbian becomes the most widely used software in the world with one mixed UI (S60, UIQ and MOAP). All crazy applications will be developed with this great platform and since it is open source I am sure even the developers will get free tools to develop the apps and great support to them. Since great applications are present for Symbian phones, people will start buying Symbian OS related phones from various Vendors. While this is happening, Nokia will start pushing their services to their devices and all the devices that run on Converged Platform. So even if people are not buying Nokia Phones they will generate revenue since they will get customers because of the Converged Platform. Now it will become very simple for them to distribute the services and it will work like gem. Once this happens I am sure that Nokia’s cash registers will be ringing with dollars, pounds, euros and yen of course!!

I am sure you will be thinking I am just saying things with my imagination..
If so, here is my answer to you guys.. Just visit these sites.

http://mosh.nokia.com/
http://www.ovi.com/ovi/app/ovi/web/index/
http://musicstore.nokia.com/
http://share.ovi.com/
http://europe.nokia.com/A4509271
http://www.n-gage.com/

Now why should Nokia spend so much money on these??? Does it make any sense?? For some days it was not making a great sense..

After acquiring Symbian and convincing others to provide UI’s to make a Converged Platform makes perfect sense to me. The bigger picture is that Nokia wants to become the next Microsoft or Google and if everything falls as per my prediction then trust me Nokia is THE next Big thing on earth and I am sure this can happen since Nokia is gaining ground around the world and it is one of the well known brands. And to iterate this, Nokia is enjoying the title of being THE Most Trusted Brand in India for the year 2008..

Get back tomorrow, we will get back to our life!!

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26/06/2008
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Personal Finance

Trust yourself for your Financial Future

I had a word with one of my friend and he was trusting some one for his Financial Future. This is not his case alone. Most of us do the same. Is it worth doing it? Ever thought about it?

If we don’t learn to manage our own hard earned money, someone will manage it rather honestly mismanage it. Some of these people may be ill-intentioned, like unscrupulous commission-based financial planners who keep calling us for some financial products every now and then. Others may be well-meaning, but may not know what they’re doing, like our parents, If they are not up to date with the financial instruments they can’t guide us in the proper direction and I don’t blame them. I prefer guys like us to take care of our financial future. We should guide them as well since the times have changed and their principles might hold good but definitely not their financial instruments.

Instead of all these things, it is better we start realizing our needs and start equipping ourselves with what we have to learn. In order to take charge try to learn something new everyday regarding personal finance. Once you equip yourself with Personal Finance knowledge try to take care of the situation and ensure that you don’t let anyone else control your Financial Future. It is your money and it should work hard for you.

Your first step should be, learning how to make money work for you and you should not work hard for money.

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25/06/2008
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Personal Finance

Shares are Riskier??

Most of them feel that Shares are Riskier. They convinced me also that it is most riskier than any other financial instruments. Till I traded, I was also under the same impression. After trading I have realized that Shares are not that riskier as people told me.

Shares are just another financial instrument which people use to increase their income. It is the trader who makes the shares riskier and shares itself is not that risky. Generally a trader takes daredevil risks where as an investor takes calculated risks.

People are very confused in share market (I was one of them!!). They don’t know whether to be a Trader or Investor. If they want to be a Trader they are not sure how to trade, when to trade, how to trade and so on… If they want to be a Investor they are not sure how long to invest, in what they should invest, when to take out money and all that.. Its a scary confused world of people who don’t know what to do with their money and lose out. There are other bunch of people who know exactly what to do and they make money. It is up to you to choose which side you want to stand.

Before even dreaming of making money in stock market. Decide your position. Whether you want to be a trader or investor and after that decide on how much you want to make and when you plan to quit the stock market. If you are greedy I am sure you will lose. Don’t be greedy, decide the things and then start your game.

Stock market is a game, first learn the rules and then decide your game play and then play the game..

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23/06/2008
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Personal Finance

What is a Bank? How does it function?

Bank functions on the trust and belief that the customers have on them. (Not many knew this, were you one of them?? I was!!!).

All that we do is we deposit our hard earned money in bank trusting them that they will respect our cheques and will return us our money when we want. We have a sense of security with the banks that the money is safe with them rather than with us. This is not the only reason for keeping the money with the banks. They provide us the opportunity to access the money at our ease (ATM) and also they provide many facilities. But the most important thing is Banks provide us Interest for the amount that we have deposited. Banks do provide the convenience for us to do loads of things with the money which we would not be able to do if we had kept the money with ourselves without trusting the banks.

From webster’s dictionary, Bank means “an establishment for the custody, loan, exchange, or issue of money, for the extension of credit, and for facilitating the transmission of funds”. The main purpose of Bank is to loan out the money to public in order to facilitate their spendings. When money is deposited by an individual that money goes to a pool of money where others also have deposited and the account of the individual is credited with the money so that when he gives the cheque it will be honored or he can withdraw money whenever he needs it. Interest will be provided to the amount that the individual has deposited.

What Bank does is, for every Rs.100 it has got through deposits it can lend Rs.90 and it should keep Rs.10 as reserve. This reserve amount is decided by the Central bank of the nation i.e. RBI for India. RBI governs all the banks in India. Banks provide lesser interest to the amount deposited than the interest it charges for the loan. The interest that is provided to the amount deposited varies depending on the type of account and how long the money is with the bank. Generally for savings account it is around 7 – 9% depending on the tenure and the various loans that it provides customer are Home loans, education loans, vehicle loans and so on. The interest for each of this also varies. Since the bank has Rs.100 has deposits, RBI also gives money to Banks and charges them interest. Generally it is up to 9 times the bank gets money from RBI. So RBI gives bank Rs.900 if the bank has Rs. 100 and all that bank has to do is just keep Rs.10 as reserve and lend out Rs.990. Bank loans the money out to general public and gets it back and returns the money back to RBI making some profits.

How does Bank make money? Banks are also a type of business. They make money on the interest they charge on loans because that interest is higher than the interest they pay on depositor’s accounts. The interest rate a bank charges its borrowers depends on both the number of people who want to borrow and the amount of money the bank has available to lend. Loaning money is also inherently risky. A bank never really knows if it’ll get that money back. Therefore, the riskier the loan the higher the interest rate the bank charges. While paying interest may not seem to be a great financial move in some respects, it really is a small price to pay for using someone else’s money.

Bottom line is : Banks just work on TRUST and nothing else. RBI and Depositor’s trust bank and provide their money. Bank in turn trusts its customers and expects them to pay back the amount that it has lent. If someone defaults in the middle the whole setup goes for a mess. If someone has a account in the bank that means he is trust worthy.

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