If one invest in long term then risk becomes minimum.

Profits in long term are much more than short term & day trading profits.

More than one year holding of stock is considered longterm officially but more than3-5 years is longterm actually.

Many traders bought HUL@200,sold at 400 in 2years but who bought & forgot are still holding @900. They can have same profit by selling half quantity only.

Some long sighted fathers had left deliveries of shares for their children .Value of such portfolio is in crores.Many ups & downs passes during longterm.One has to keep watching let all happen.stocks which have good fundamentals should be chosen for long term investment.

Get ready with study & saving to accumulate in dips.It is observed that there is a financial cycle almost in all asset classes which keep repeating in particular time intervals.

There was picks in the market after every 4 years.for example 1992,1996,2000.2004,2008.2012,may be2016.

Pick may be for 1-2years & market keep falling for next 3years.This is quite de motivating to hear that market remains more in bottom than ups.

But it is a very good news for regular investor. because he can keep buying 75% quantity in 25%cost only and all the money grows 4times in 4years.

2basic rules should be followed-


Invest in all major sectors.because there is sector shift.

2.cost averaging-

There is no right cost for bad stock & no wrong price for good stock.

What is sector shift?

Sectors which were running in last bullish phase of market(say2006/07/08) had fallen dramatically from their picks,but all the traders who entered market in last bull run are in infatuation with those sectors & stocks,so they kept accumulating and trapped totally in all those like realty,metal,sugar,cement & infrastructure.

Some sectors & stock were out of scene then.No trader were even watching them at all like pharma stocks/auto/FMCG/Engineering etc.

In these bull run they suddenly started & became 3-4times already and will keep running till pick of this bull phase.then new traders will get trapped in these sectors & stocks too.

Many so called investors keep talking that there was a time when Infosys,reliance & LT were issued in rs10/- only.

What if we would have been then?

Sorry,bro..it was more difficult to buy those stocks in Rs10 then.If it would have been possible then it is still possible today.

So many new infy,ril & LT are in making and you will miss this opportunity again with this same old attitude,

There is a very good news for you,

You will have  always a chance to buy a great stock at minimum price.As it was there on 21000sensex level in2008,infy was less than half,heromoto,HUL & Grasim was the same story.

There is no mistake possible in longterm,because  your money turn into zero in your own hands,so all other investments are safer than you & your family.

No patience required for long term investment now.because all of you have more than enough,if you can invest in money back insurance with all binding condition for 25years to get back only3-4times money & covering a negligible risk,then cut down your patience to one third.

A fix deposit is double in 8years then any stock from nifty or sensex may be bought with freedom of tenure & amount.

Even gold & real estate will test your patience more than equity.

System to invest in long term

Keep record of your daily expenses.

Restructure & analyse  expenses and see what can be saved?

Minimum 10-15% can be saved easily without leaving any joy.

For example,

You are spending 30000/month

So 3000-4000/- westage from it.

Anually it would be around 40000/-

Whether your income go up or not but expense will go up certainly.

So It would be like 1.2lac in first 3years,then 1.8 in next 3years & so on..

So 1.2+1.8+2.7+4+6+9+14+20+30+40+50lacs=1.9crore will be basic investment from your side.

Because you will have a chance to book profit in first 5years,and to reenter again in dips with double or triple quantity from profit only.

That is most challenging period.

If your portfolio remain alive for this period,then you will remain here for next 30-50years till the life goes.

After that you will not be here,but portfolio will still be there with your loved ones.

Hurdles in longterm investment

1.. We don’t have spare money?”that is general excuse.

Investment should not be from income, it should be from expenses, so even a student or housewife who is spending 7-8000 as pocket money. they can save 700-800 westage .

One student can make 2crore portfolio with 700per month stock buying. He is having more time to let it grow.

2.. Don’t know about right stocks

One can buy any stock from nifty/nifty midcap or sensex,he will get good return from all other asset classes.

HOW to choose right stock to buy?

You should buy 60% large cap stocks,20% midcap stocks &20% small cap stocks.

Large cap will protect your capital, midcap will give you more growth & small cap will give you max yield.

If you are having Rs.1000/- pm,then see monthly loser of nifty/nifty midcap.

If you see realty in bottom then you can buy 50unitech or 5dlf & some smallcap.

Next month if metals are down, then 10hindalco may be bought.

You should buy stocks with less price at bottom as well as stocks at pick at double or triple price.

Suppose you bought dlf@200 and it went down to120.At the same time you bought sunpharma@500 &  maruti@3000. They were near high but still we bought it in a little dip,So portfolio was well diversified.

When DLF was losing -40%,then these two stocks were compensating  this loss with+70%.

We can book big part profit in gaining stocks here and it may be 

Reinvested in little parts in losing stocks in every dip.

If we see 90,000 value of 1lac portfolio,then it’s ok to bear. All are mentally prepared to see 10-15% up down in stock market.

But if it is 60,000value of 1lac then no one can console us for such a loss. This value may still go downside from here also.

That is the way how investors fled away from market and never returned.

Don’t choose stocks by seeing price only.Cheap is not cheap here and expensive is not expensive in investment.

In next 12months, you will have 15-20stocks of all major sectors.

Don’t cost average by price but use right time interval.So you need not to guess low in any falling stock because it is very wrong in 90% cases.

1/3rule for accumulation-

If you want to accumulate some stocks in bottom fishing ,then you should use this fantastic rule.

Suppose you are buying unitech. It was 500 some time,then it came to 200,investor kept accumulating in every dip.

Then it was 70,then 25 & finally 6 only.

So if you are buying  to hold for 5years,then purchasing process should go on for 5/3=1.5years. 

Means if you were buying in 6months gap 3times,then you would have got all the best levels which gave you best cost averaging.

Same rule may be applied for selling as well.

You sold maruti@3000,then after 3month it was3600 & after 3month later again you sold it@4600.

One can’t guess LOW or HIGH in such market and no one should try to guess. Let it happen first, actual low & high will be before your eyes.

When & how to book profit (sell stocks)

There are 2 right reasons to sell-

1. You need money-

This is the reason for what you did everything but ask yourself whether it is necessity or luxury?

Actually we are cancelling small luxuries to afford big luxary after some days.

Do not sell more than essential.Sell with very tight hands.

Because it is a saying-

Rich fellow always plan to buy assets and poor fellows always plan to sell assets.

2. Picks in markets-

You should keep booking part profit in jumps of index and you can follow 1/2/3 rule to sell stocks.

Sell 5% of portfolio in first jump,10% in 2nd jump and 15% in 3rd jump, then market may show some profit booking.

Buy in dips some good stocks again.

Do not try to sell more in jumps & buy in dips for short term joy.If you want to enjoy chicken then go beyond temptation for omlette.

Otherwise you will laugh on others who are holding with your smartness of frequent buying & selling  four times,but you will keep crying for years when you sold all your portfolio on first jump only.

All those other who may be dull 4times but when they will start laughing, they will keep laughing for years.

For example some traders bought rel infra in 2004-05 and got so many chances to buy in 400-500 & to sell in 600-700 but once it broke 52week high@750 then broke all time high@1100 & it went to 2700high.

Same story was there with sensex levels & almost many stocks, when sensex was double in 2years (7000level)

Investors thought to sell 80% portfolio because 10000 level was out of imagination then.

we shall get at least one dip to re enter in the market.

Sensex & Nifty gave no single chance to enter again and it happened with the fellows who were holding for many months

And waiting for a particular price.

Good quality stocks-

Study mutual funds for quality stocks. MF don’t touch stocks without good fundamentals.

All of us know about Large cap or blue chip stocks but midcap & small cap stocks are very difficult to recognize. So we can take help of top holding of Mid & small cap funds.

We discuss so many methods in telephonic training for very busy person in very easy manner. but it needs two way communication due to complex information.

Middle class fellows are scared of losing their hard earned capital.

But there is one hidden thief which is stealing all their capital .That is inflation. If  you can’t beat inflation then you are losing already.

All of us buying car /TV/fridge this year and they reduce to half in next 2years.These will never go up. There value will keep reducing to zero. But we are OK with this then why should we worry to buy stocks which are down for time being but will go up gain some day.

We can see our portfolio with a very different angle?

What is the value of your biggest dream for you?

The money only may not be the biggest dream for all of us, but it can take you nearer to your dream.

Then if one is having dream of Crores for next 30years in cost of 1cold drink & cigarate. (Rs 50/day)means 1500/month.

I think dream alone is enough to live the life with a great hope.

Completion of dream is secondary here.

What could be the worst here?

Suppose you kept investing Rs 10lac in these 30years.

Market didn’t support it all and finally it is 4lac only by the end of period which is almost impossible but just imagine this.

You are still in the profit of 4lacs.


Because if you wouldn’t have started this process with negligible amount , big hope & total freedom to enter/exit,

To stop & continue.

There would have been a big zero.

Because investment in any asset class is better than spending.

Motivation of big appreciation makes anyone start investing in stock market. 

otherwise a little appreciation in safe investment like FD/RD & insurance are not attracting youngsters to even start.

Our income is like rains. It comes & goes. It is useful only when earth absorbs it. It is 10-15% only.

In the same way, we earn & spend 90%.We can save maximum 20%.

This 20% is like seeds which are less in numbers but can yield into huge numbers. It is not enough to save more but sow it into right soil is more needed.

Asset classes have shown these results in last 30years-

FD average 9%

Gold 10.2%

Real estate average return 14%

Equity 18%

So equity is the right asset class which can answer inflation rate.

Story of first year trading.

Everyone can enter into the stock market/commodity  trading.They are not prepared like a mature trader and get trapped into attractive midcap & small cap stocks at wrong levels.

Life doesn’t stop if someone lose 10000 out of 20000,but many traders left the market due to shocking results on first step itself.


When I came into the market,it was very difficult for me to buy even a magazine worth rs 30/-.

Why to spend if anyone will tell me to do whatever is needed to be done.That is the common attitude of a beginner middle class trader.

I reached to screen daily at 9.55am at sub broking terminal.

Trading on own computer with own hands was not affordable for me at all and not for many traders those days.I bought 20-50stocks with much fear.

No one from outside can imagine this. How fast & easily trades are completed on screen.

I got money 2days and lost double third day.

I bought share@160 and when it goes to 169.I bought more @169 in over excitement. Then it came down to 162. I sold it in loss repenting.

I was doing very small trades but still the loss were 3000/- in 20 days  out of 4000cheque given by me first time.

I was frustrated to think that even a small worker brings rs 100 at his home but I am losing 200-300daily.

Is it really a business or gambling as it termed by all others.

I will leave this stupid trading once I recover my loss.

When my broker said me not to permit trading next day, if  don’t  give another cheque .I had to see my mistakes in that do or die situation.

All of us change when there is no way to continue ahead.


Next day,I reached the terminal,bought some stock@190, when it started going further then added some more stocks@191. I booked profit fast@196 in60% quantity and rest sold@204.

Such 2trades in morning & 1trade in evening and got 4500 by the evening.Loss was recovered but 

who leaves the game after victory?

Right way flashes one day after making many mistakes.

then profit became a daily story and volume kept going up.

I started buying and selling 2000 shares in single shot.When I thought to have profit of 8000-9000 after speedy heavy volume trading and checked trading window.

It was+22000- double than expected.

Got +70000 in just a week. Every career was seeming dull in comparison to my growth rate. I considered myself out of danger now.If I lost 5000-6000 some day,it won’t affect me.

I forgot to eat & sleep during losses but it was more worse during days of profits.

I started reaching terminal before opening of market .I kept trading in same heavy volume and market suddenly reversed.

Struggled whole day after I got trapped but nothing worked that bad day.I was afraid to lose 10000 but when I checked net position(alt+f6) it was 27000/-.I was totally shocked and wasn’t able to accept it all.

So I reacted at the moment & bought 1000 more shares which fell by Rs9 in just 10minutes.

Total loss was -36000 triple than expected.

Came to home in despair. I was in hurry to recover all the loss next day.Placed trades within 10minutes of market opening & lost 18000 again.

When money goes back after gains, it is unbearable. All the passion was over. A lost trader was trading like a worthless ritual & lost 10000 in next 20days with very small losses.

When I came to senses after the whole scene,I realized that 70000 was more than enough for me in those days.

If you lost 35000, then still there were 35000left.

If I would have waited for right time and then traded with left money. It would have been better.

But market didn’t let me recover even half of my loss?

I was angry and left the market. All study-fundamentals & technicals  were seeming fake.

One can’t read & think useful things when these needed most due to state of mind.So he has to take right decision in very wrong time.

Some old traders keep saying that delivery is better.When I was gaining ,I was not ready to listen those all considering all of the losers. but you listen to everyone in bad times.

How could i believe their stories if I didn’t see any of such .But it was painful to be the part of story.


Now I returned to my prior business like a wife goes to mother’s place after a fight with husband.

I started taking some IPO & picking some delivery of stocks.There was some recovery after fall in index . I got some money. Again I was going near market. Delivery  was turning into trading gradually.

There was a mix up of trading & delivery now.If some scrip went down intraday,I had to bring it home.That was my delivery.

I started with 30000 what I arranged again with my saving and borrowed from father.Then gave 30,000 more after some time.

When I got some more profit, arranged 40000 from somewhere again and gave cheque. Now portfolio value was around 1lac.

You can see the ups & downs of sentiments with return of little hope.It was showing 10 to15000 gaine for 2-3months.Iwas justifying  my working with 7000Pm monthly gain in comparison to any other job.

Portfolio was having midcap companies and sensex was going up.Midcap/smallcap started going down suddenly.

Portfolio value reduced to 95000 & then 90000 level. My all monthly calculation were senseless now.SENSEX was making new high.So I thought it will recover again.but it kept falling and became 85000/- only.

I asked to broker whether to hold it or sell it and book loss.

He suggested to wait a little more.He didn’t ask for more details so I didn’t tell him.

SENSEX started going down finally. That portfolio was 75000 first day,second day 65000 and third day it was 45000.

It was shocking. everyone was suggesting to take delivery.

Now see what delivery has done  to me? Trading was better than this. we had some thrill at least .I couldn’t understand my mistake this time. I didn’t do anything and had the penalty  of-55000/-.

Started trading again for recovery anyhow. Got +500 first day,+2000 second day. Start calculating that if same profit continue for 40days, I would recover 60-70000/-.I decided the target then.


If I was getting +400 some day, I thought it not enough for recovery .I need+2000 daily.Did not accept +400,it turned -1000 by evening.Next day -2000 in continuity. Whenever I did anything in confusion,had losses most of time.

Debit reached -10000/- .When sub broker asked for cheque,I had to sell delivery worth 10000/-.Market was sinking slowly day by day. It was very painful  to get stuck in unavoidable crisis.

Then market started showing some recovery.It came back to it’s old level ,but my port folio came 55000 from 35000 value.

Now I was feeling totally trapped.Then I realized that if you don’t have your own understanding, no advice from all the world can help me.

I agreed to hold delivery at pick. when market showed some correction,I kept selling in bottom.then I started trading again in volatile market.That  was my second mistake. No one can stick to right plan without knowledge.

When beginners come to the market,he thinks “what is to learn there? It is just buying & selling by pressing keys.

After 4months, he says no one can understand such ups & downs. There is no science,It is just  gambling.

After 14months ,when he saw all moods of market- wild bullish phase,nosediving  bear phase , swinging volatility,dull screen which make you sleep.

Then he start seeing something definite in this indefinite market.That’s why we suggest you to see a complete cycle of market.

If you are in the market since last 18 months and bull phase is running only with small corrections,then you don’t know the market.You know it’s single mood only.It’s like courtship period which remains very sweet due to knowing very little.

But one has to know reality before marriage.

After loss of 40000 in my portfolio just in 3days,I came to understand that all magazine, websites, trainings & own computer are not expensive.

Everyone go to mother’s place like angry wife, then he cools down and start to miss again her husband, Mr. Market.

So it is the same.

Keep fighting always but you can’t live far from it,

If you made a relation with Mr. Market.

Balance sheet of SE ltd

Market price per equity share – Rs.20,000

Ratio for SE ltd limited are computer as under :

EPS =  Net profit- tax/number of ordinary shares outstanding = 3.30/1.00 = Rs. 3.30 per share

dividend yield = Dividend  per share/market value per share*100 = 2.00/20.00*100 = 10.00%

Price to earning ratio   =  Market price of share/EPS.

                                         = 20.00/3.30 =Rs. 6.06

Return on Equity    = Net income after tax/Equity

                               =3.30/(10.00+15.20)*100 = 13.09%

Debt to Equity ratio = debt/Equity

             =(14.30+16.90)/(10.00+15.20) = 1.24

Current ratio = Current assets/current liabilties

                         = 23.40/10.50 = 2.29

Quick ratio  = Quick assets/current liabilities

                   =(0.20+11.80)/10.50 = 12.00/10.50 = 1.14

Inventory turnover ratio = Cost of goods sold/inventory  =  55.20/10.60 = 5.20

Average collection period = receivables/average sales per day = 11.80/70.1*1/360 = 61 days

Fixed assets turnover ratio = net sales/fixed assets

                  = 70.10/34.00 = 2.06

Gross profit ratio = gross profit/net sales


Net profit ratio   = net profit / net sales

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