There is a stimulus and a response Depending on the nature of the stimulus
Good trading rules are important. However, even those who concoct great rules tend not to follow them. Most people lack the consistency necessary to stick to those rules even when things are going badly.
Make the decision. Will you be consistent in following your rules or not? Most people who invest or trade never make the decision. It is almost impossible to be a consistent winner in the stock market without the consistent application of good decision rules. Think about how the market reacts to news events. A new jobs report is released by the government that shows more people are jobless. Immediately, the market plunges. The debt of a foreign country is downgraded and panic hits the market. Stocks plunge in many sectors. What is going on here? Just as an EKG can tell a cardiologist some things about a person's heart function, so we can consider the market to be connected to the nervous system of millions of investors.
There is a stimulus and a response. Depending on the nature of the stimulus, the response is reasonably predictable. The market reflects emotional states of the population. In order to profit in the stock market, it is necessary to avoid thinking like the rest of the population. When the population pushes the market down in a fit of panic selling, the negative attitude about owning stocks is at a peak. However, that is precisely the time when people should be most positive about owning stocks. The individual investor tends to feel the same way the population as a whole feels. To follow a set of rules with consistency, therefore, is difficult. It often forces a person to act contrary to his emotions.
Assume, for example, that you have just bought a stock with a fantastic story. Blixis Company (BLIX) has just discovered a permanent cure for the common cold and has patent rights to the serum. The stock is at $10 a share and you note that it has been closely following a rising trendline. You buy it for $10 when it is right on the trendline. You believe this stock is likely to go to at least $100 and that it will probably split several times before it stops climbing. After a week, the stock is at $15 and it is still moving along the trendline. One day you happen to be looking at the chart of this stock and you notice that it has fallen below the trendline. It is selling at $15 but the trendline is at 15.46. What do you do? Do you say to yourself that this is only a temporary bout of profit taking and decide to continue holding? Two days later the trendline is at $17 and the stock is still at $15. Do you tell yourself that "stocks fluctuate and you must give them room to do so" or do you sell? At $15, the stock is 11.76% below the trendline.
Most investors in this situation would keep holding. However, if you are still holding, then you must face the fact that you probably do not have a strategy at all. You have bought a "story stock" and you are psychologically locked into it because you believe in its story. A strategy consisting of a set of decision rules enables a person to draw a line in the sand and say "this is where I pull the plug." The probability of a person coming out ahead in the scenario described above, without his adhering to the dictates of a good set of decision rules, is not great. What if the FDA insists on additional data before clearing the drug? The stock would then plummet. It could take a year or more to acquire sufficient data to satisfy the FDA. What if while you are waiting another company comes up with a cure that is based on a slightly different process that will enable the company to manufacture its drug more cheaply than Blixis Company can manufacture its drug? If that were to happen, BLIX would probably plunge and you would still be holding the stock.
A consistent rule-following strategic investor times his purchase so he can buy when risk of further decline is minimal. He never becomes married to a stock. Finally, he always has an exit strategy, because unexpected bad things happen. In fact, these are the broad principles followed by stockdisciplines trader/investors. Beyond these general concepts, an investor/trader should have specific well-defined rules for buying and selling. For every buyer, there is a seller. One is more likely to make money on a transaction, and the other is more likely to lose money on the same transaction. Without strictly adhering to a sound strategy, guess which one you are most likely to be.
Jet Airways is in big news and their flights are down from past 6 months continuously for their debit clearance issues. Unpaid vendor bills and unpaid salaries to their employees.
Jet airways is not the right choice now; their debt is the reason behind. their asset evaluation went down to -1,946.88cr. Many of their flight are down due to debits. keep on increasing numbers of flights stopped from flying. At the same time flights condition is also not to the mark.
Recently Vijay Malya, founder from kingfisher airlines announced and offered some help, but he cannot clear the debt which jet airway vow now. Total debt is around 5,295.12Cr.
Their net worth is now negative with -7,242Cr. Unpaid employees' salary, job stability fear and attrition rate are now 70% in jet airways. However, Market capital estimated as of now is 3,116.54.
On the efforts of saving the company, the BSE board also approved the issue of 11.4 crore equity shares to the lenders upon conversion of Re 1 of the outstanding debt. Lenders will infuse up to Rs 1,500 crore via debt instruments.
The board also approved the constitution of an Interim Management Committee to manage and monitor the daily operations and cash flow of the company.
Jet airline will leverage the raise funds to clear the pending dues towards lessors, vendors, creditors and employees and planned to re-deploy several of its grounded aircraft back into it work.
On the other hand, all these activities may take decent amount of time, board decisions are pending till April 30th, 2019. Al the same phase Indian PM elections will be under pressure, government activities may speed up or slow down the trading activities, In the past I have seen nifty giving variation in huge number by shares being pulled down. This is because of fall I open interest.
Though funds are accumulated the entire Q4 profits going to be null or negative due to the drama happening now, they hardly earned in the time between Q3 to Q4 results, this will hit as a drought for sellers.
However, the buying opportunity is ahead, once the Elections are over mean time Jet airways Q4 results impacts also would have finished and the board of directors' decisions also completed along with progress and debt clearance plans. one can see investing during June and July in Jet airways.
If the elections turned positive, then we can defiantly see some short coverings. Whatever the results may be, do not look for long term with Jet airways at the point.
If you're new to investing, it might all seem overwhelming. There are so many different types of investments in every market imaginable. Some people are more comfortable investing in mutual funds while others prefer to purchase individual stocks. It's essential that you research all of your options carefully and then get started with a small initial investment. Your broker or consultant should be able to give you money investment tips based on your risk factor, current financial situation, and amount of money you will be able to afford to put into an account each month. Never, ever invest with money that you cannot afford to lose, even if market conditions and statistics seem to be in your favor.
Here are a few tips to help you get started:
• "Mock investing simulators" are available and free. It's really recommended that you practice using one of these before investing any real money. Using this kind of tool will really help you give you an understanding of your risk factor level and how you can diversify your portfolio in a way that is most favorable to you. You can also learn from your mistakes when using fake money in a mock account so that you won't make those same mistakes when investing real money.
More Money Investment Tips to Grow Your Wealth
• Don't overlook the IRA option. Putting money into an IRA account can be very rewarding - especially if you pick the right account. There are essentially two options: Roth and Traditional. With the traditional option, the contributions are deductible on your taxes. On the other hand, Roth contributions are not deductible, but the withdrawals you make in retirement WILL be tax free.
• Consider how much of your portfolio should actually be in stocks. Due to the potential long-term fluctuations, it makes sense that younger investors could ultimately profit, as they literally have decades to wait for the conditions of those stocks to be very beneficial to them. Likewise, as people get older, they tend to reduce exposure to stocks in order to preserve their capital. However, these are not rules that are set in stone. Each individual is different.
• Learn about the red flags you should be watching out for. For instance, if there is a particular stock that keeps dropping and dropping over the past 3 - 5 years, you should probably stay away from it. Just look at the charts. Also, it's pretty obvious that you'll not want to purchase any stock from a company that is currently under any type of investigation.
Make the decision. Will you be consistent in following your rules or not? Most people who invest or trade never make the decision. It is almost impossible to be a consistent winner in the stock market without the consistent application of good decision rules. Think about how the market reacts to news events. A new jobs report is released by the government that shows more people are jobless. Immediately, the market plunges. The debt of a foreign country is downgraded and panic hits the market. Stocks plunge in many sectors. What is going on here? Just as an EKG can tell a cardiologist some things about a person's heart function, so we can consider the market to be connected to the nervous system of millions of investors.
There is a stimulus and a response. Depending on the nature of the stimulus, the response is reasonably predictable. The market reflects emotional states of the population. In order to profit in the stock market, it is necessary to avoid thinking like the rest of the population. When the population pushes the market down in a fit of panic selling, the negative attitude about owning stocks is at a peak. However, that is precisely the time when people should be most positive about owning stocks. The individual investor tends to feel the same way the population as a whole feels. To follow a set of rules with consistency, therefore, is difficult. It often forces a person to act contrary to his emotions.
Assume, for example, that you have just bought a stock with a fantastic story. Blixis Company (BLIX) has just discovered a permanent cure for the common cold and has patent rights to the serum. The stock is at $10 a share and you note that it has been closely following a rising trendline. You buy it for $10 when it is right on the trendline. You believe this stock is likely to go to at least $100 and that it will probably split several times before it stops climbing. After a week, the stock is at $15 and it is still moving along the trendline. One day you happen to be looking at the chart of this stock and you notice that it has fallen below the trendline. It is selling at $15 but the trendline is at 15.46. What do you do? Do you say to yourself that this is only a temporary bout of profit taking and decide to continue holding? Two days later the trendline is at $17 and the stock is still at $15. Do you tell yourself that "stocks fluctuate and you must give them room to do so" or do you sell? At $15, the stock is 11.76% below the trendline.
Most investors in this situation would keep holding. However, if you are still holding, then you must face the fact that you probably do not have a strategy at all. You have bought a "story stock" and you are psychologically locked into it because you believe in its story. A strategy consisting of a set of decision rules enables a person to draw a line in the sand and say "this is where I pull the plug." The probability of a person coming out ahead in the scenario described above, without his adhering to the dictates of a good set of decision rules, is not great. What if the FDA insists on additional data before clearing the drug? The stock would then plummet. It could take a year or more to acquire sufficient data to satisfy the FDA. What if while you are waiting another company comes up with a cure that is based on a slightly different process that will enable the company to manufacture its drug more cheaply than Blixis Company can manufacture its drug? If that were to happen, BLIX would probably plunge and you would still be holding the stock.
A consistent rule-following strategic investor times his purchase so he can buy when risk of further decline is minimal. He never becomes married to a stock. Finally, he always has an exit strategy, because unexpected bad things happen. In fact, these are the broad principles followed by stockdisciplines trader/investors. Beyond these general concepts, an investor/trader should have specific well-defined rules for buying and selling. For every buyer, there is a seller. One is more likely to make money on a transaction, and the other is more likely to lose money on the same transaction. Without strictly adhering to a sound strategy, guess which one you are most likely to be.
Jet Airways is in big news and their flights are down from past 6 months continuously for their debit clearance issues. Unpaid vendor bills and unpaid salaries to their employees.
Jet airways is not the right choice now; their debt is the reason behind. their asset evaluation went down to -1,946.88cr. Many of their flight are down due to debits. keep on increasing numbers of flights stopped from flying. At the same time flights condition is also not to the mark.
Recently Vijay Malya, founder from kingfisher airlines announced and offered some help, but he cannot clear the debt which jet airway vow now. Total debt is around 5,295.12Cr.
Their net worth is now negative with -7,242Cr. Unpaid employees' salary, job stability fear and attrition rate are now 70% in jet airways. However, Market capital estimated as of now is 3,116.54.
On the efforts of saving the company, the BSE board also approved the issue of 11.4 crore equity shares to the lenders upon conversion of Re 1 of the outstanding debt. Lenders will infuse up to Rs 1,500 crore via debt instruments.
The board also approved the constitution of an Interim Management Committee to manage and monitor the daily operations and cash flow of the company.
Jet airline will leverage the raise funds to clear the pending dues towards lessors, vendors, creditors and employees and planned to re-deploy several of its grounded aircraft back into it work.
On the other hand, all these activities may take decent amount of time, board decisions are pending till April 30th, 2019. Al the same phase Indian PM elections will be under pressure, government activities may speed up or slow down the trading activities, In the past I have seen nifty giving variation in huge number by shares being pulled down. This is because of fall I open interest.
Though funds are accumulated the entire Q4 profits going to be null or negative due to the drama happening now, they hardly earned in the time between Q3 to Q4 results, this will hit as a drought for sellers.
However, the buying opportunity is ahead, once the Elections are over mean time Jet airways Q4 results impacts also would have finished and the board of directors' decisions also completed along with progress and debt clearance plans. one can see investing during June and July in Jet airways.
If the elections turned positive, then we can defiantly see some short coverings. Whatever the results may be, do not look for long term with Jet airways at the point.
If you're new to investing, it might all seem overwhelming. There are so many different types of investments in every market imaginable. Some people are more comfortable investing in mutual funds while others prefer to purchase individual stocks. It's essential that you research all of your options carefully and then get started with a small initial investment. Your broker or consultant should be able to give you money investment tips based on your risk factor, current financial situation, and amount of money you will be able to afford to put into an account each month. Never, ever invest with money that you cannot afford to lose, even if market conditions and statistics seem to be in your favor.
Here are a few tips to help you get started:
• "Mock investing simulators" are available and free. It's really recommended that you practice using one of these before investing any real money. Using this kind of tool will really help you give you an understanding of your risk factor level and how you can diversify your portfolio in a way that is most favorable to you. You can also learn from your mistakes when using fake money in a mock account so that you won't make those same mistakes when investing real money.
More Money Investment Tips to Grow Your Wealth
• Don't overlook the IRA option. Putting money into an IRA account can be very rewarding - especially if you pick the right account. There are essentially two options: Roth and Traditional. With the traditional option, the contributions are deductible on your taxes. On the other hand, Roth contributions are not deductible, but the withdrawals you make in retirement WILL be tax free.
• Consider how much of your portfolio should actually be in stocks. Due to the potential long-term fluctuations, it makes sense that younger investors could ultimately profit, as they literally have decades to wait for the conditions of those stocks to be very beneficial to them. Likewise, as people get older, they tend to reduce exposure to stocks in order to preserve their capital. However, these are not rules that are set in stone. Each individual is different.
• Learn about the red flags you should be watching out for. For instance, if there is a particular stock that keeps dropping and dropping over the past 3 - 5 years, you should probably stay away from it. Just look at the charts. Also, it's pretty obvious that you'll not want to purchase any stock from a company that is currently under any type of investigation.
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