LEARN STOCK MARKET

BOOK VALUE: In simple terms  "If company sold all its assets and paid up all liabilities and remaining amount divided in all shareholders then value (amount) what investors get per share is book value."  For example : If company has a assets of 100 cr and liabilities of 95 cr and total number of outstanding shares (total shares of company ) are 1 cr.  Then  Book value of company= 100 cr - 95 cr                                           =5 cr. Now 5 cr divided by 1 cr (total shares outstanding) 5 cr ÷ 1 cr =5 Rs. (Booka value of shares) MARKET VALUE: " it will give you idea about how much premium or discount investors willing to pay." Market value = total outstanding shares × curren share price. Market value = 1 cr × 7 Rs (assume)                         = 7 cr market value  Market value pr share = 7cr ÷ 1cr                                        = 7 Rs. It means investors willing to pay 2 Rs of premium for every share of this company.

Dow theory was created by Charles H Dow and they are the person introduced indices to the stock market for first time. What is the Dow theory? Dow theory is financial theory that says the market is in an upward trend if one of its averages advances above a previous important high and is accompanied or followed by a similar advance in the other average. Not get it ?? Don't worry example given below will make this easy. For example- If NIFTY makes new high than Sensex is expected to follow nifty How this theory works? 1. The Market Discount Everything: In simple language whether it is Risk factors or whether it is Opportunity in market discount everything with data or information market have. (In fact price tells everything) if price increase there are hopes for opportunities in market and prices decrease there are in fear of risks. 2. Three primary market trends: For long term(about 10 years) there are three trends 1. Up trend 2. Down trend 3. Sideways trend

A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors.  Advantages of mutual funds: Increased diversification: A fund diversifies holding many securities. This diversification decreases risk. Professional investment management: Open-and closed-end funds hire portfolio managers to supervise the fund's investments. Service and convenience: Funds often provide services such as check writing. Government oversight: Mutual funds are regulated by a governmental body. Transparency and ease of comparison: All mutual funds are required to report the same information to investors, which makes them easier to compare to each other. Lower cost: The cost of a single investor

CAGR is a term for the geometric progression ratio that provides a constant rate of return. Formula and Calculation of CAGR Where  V(final)  is the end(final) value, V(begin) is the initial value t is the number of years. For example  If xyz company has a profit for last few financial year are like  Year             profit 2016            20000 2017            26000 2018            27000 2019            31000  Then CAGR =(31000/20000)^1/3 -1            =(1.55)^1/3-1            =0.157            =15.7% CAGR is one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time. Investors can compare the CAGR of two alternatives in order to evaluate how well one stock performed against other stocks in a peer group or against a market index. CAGR does not reflect investment risk. Comparing CAGRs of business activities across similar companies will help evaluate competitive weaknesses and strengths.  These are CAGR ap

EBITDA is a company's earnings before interest, taxs, depreciation and amortisation. It is generally used to comparison of profitability between two companies by discounted the effect of interest payment. EBITDA can be used to compare companies against each other and industry averages. EBITDA=Net Income+Interest+Taxes+Depreciation +Amortisation EBITDA can be used as a shortcut to estimate the cash flow available to pay the debt of long term assets. EBITDA, however, can be misleading because it strips out the cost of capital investments like property, plant, and equipment. Negative EBITDA indicates that a business has fundamental problems with profitability and cash flow.

Vista Equity Partners will pick up a 2.32 percent stake in Jio Platforms for Rs 11,367 crore at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore. The US-based private equity firm that runs the world's largest exclusively tech-focused fund. This is the third high-profile investment in the Reliance Industries Ltd (RIL) unit. In less than three weeks now, Jio Platforms has raised Rs 60,596.37 crore from leading technology investors. Vista's investment is at an 12.5 percent premium over the Facebook deal announced in April. Vista has a track record of investing in cutting edge tech companies in their early stage. Each of its investments have been profitable in its history of 10 years. This is Vista's first sizable investment in India. Source- moneycontrol.com

In P&L statement there are two parts  1 Incomes  2 Expenses  Let's see in detail  1 Incomes or Revenue: A- Revenue from operations: these earnings are from main business of a company. For ex- if company has a business of cement manufacturing than Revenue from sales of cement is considered in this. B- Other operating revenue: these earnings are from besides main business. (Ex- rent, Interest etc) C- Total revenue : sume of A and B  2. Expenses: A- Cost of materials consumed: amount used in material cost of raw material (for ex in cement manufacturing raw materials are limestone, clay, silica) B- Operating and direct expenses: Amount which use to operate business ane direct expenses like salary, rent, marketing expense, etc. C- Employee benefit expense:employees receive these benefits besides their wage like insurance, pension etc.  D-Financing costs: are defined as the interest and other costs incurred by the Company while borrowing funds. They are also known as “Finance Costs”

Everyone is asking and Every experts are talking that "this is the right time to invest in market" also says that "market discounted corona fear"and "this is bottom formation" and some are says "be greedy when there is a blood on street"  But Before investing You must ask these questions to yourself - Is our economy's growth will remain same as before this corona effect? At what rate our(global also) GDP will grow?  Is there are increase in demand ? B'coz our economy is largely depend on demand. Is there no bank default? (large/small scale)  Is this situation affect aviation, tourism? (if yes then ask yourself which sectors are  interconnected with) Who invested in stock market or Mutual Fund Before two or three year how return they get? Which expert says before 2020 that market will see 8000-9000 level? (That time Nifty PE was around 28-29 but no one says that market is overbought) How markets was recovered after earlie

For Fundamental analysis it is required to understanding balance sheet of company. So let's see how to read balance sheet of company. Let's see step by step 1. Go to  https://www.moneycontrol.com  (this website is free) 2. In search box type stock name. 3. Click on Financials. 4. Click on Balance Sheet As shown in Figure. 5. Balance sheet will open and as you can see there are two option on top of sheet are Standalone and Consolidated Consolidated: Consolidated statement reports all activities of company and its subsidiaries as a combined entity Standalone: Standalone financial statement report these as a separate entity. (It is depend on the company to which data should calculate for better analysis. but generally we calculate consolidated statement) So as you can see there are data for every 12 month or every year. let's understand what exactly these words mean one by one but first we have to understand two word. 1. Asset: Asset is that company owns tha

P/E ratio (price to earning ratio)  Formula for P/E is share price devide by EPS (earning per share) Let's know about EPS EPS(Earing Per Share) is total income divide by total outstanding share. You can find out total income in balance sheet of company. And total outstanding shares is equal to market cap divide by current share price. For Ex-If you want to calculate XYZ company's total outstanding shares which has a market cap of 5000 cr. and current share price is 120 Rs. then Total out standing shares=5000 crore/120= 41.66 crore You can find EPS on exchange site or other websites like money control and investing.com. But what EPS defines - what is total earning per every outstanding share of company. That means if company will distribute all the profits to shareholders then what is the earning per share. Now let's  back to P/E ratio : Let's take an example  If you buy a share of XYZ company at the price of 100 Rs and earning

As we know BSE and NSE are major exchanges of india. To know the trend of all listed shares we use indices which is nifty for NSE and sansex for BSE. 1. NIFTY - NATIONAL + FIFTY =NIFTY50 that means top 50 companies of nation listed on NSE in all sector make one index called Nifty. Allocations of sectors in nifty shown below: banking/finance, technology, oil and gas has a 50% allocations in nifty that means these sectors can more impact on index if buyers in these sector are heavy then nifty shows as bullish trend as shown in above pictures.  There are also key indices in NSE 1. BANKNIFTY 2. NIFTYMIDCAP 100 3. NIFTY NEXT 50 4. NIFTY 100 5. NIFTY 200 6. NIFTY 500 7. NIFTY SMALLCAP 100 8. NIFT MIDCAP 50 9. INIDA VIX (VOLATILITY INDEX) Sectoral indices  1. NIFTY AUTO 2. NIFTY IT 3. NIFTY PSU BANK 4. NIFTY FINANCE SERVICE  5. NIFTY FMCG 6. NIFTY PHARMA 7. NIFTY METAL 8. NIFTY MEDIA 9. NIFTY REALTY  10. NIFTY ENE

Selection of good stock is not that easy.  You should check the fundamentals of that company. Also see their debts, assets, liabilities, P/E ratio,Promoters,future potential, study of balance sheet of that company, this whole process is known as fundamental analysis.  Where you can get this information about these companies? You can checkout exchange website for details of companies and nowadays there are also available  many free applications and websites. https://www.nseindia.com https://www.moneycontrol.com https://www.investing.com For find a quality stock you should study some data given below: VALUATION: Here are some screenshot of RIL's Valuation data which i take from  https://www.moneycontrol.com we will discuss in brief about Consolidated and Standalone Valuation, Market Cap, P/E,Book Value,Dividend,EPS,Face Value. FINANCIALS: Here as you can see from dec 2018 to dec 2019 a Financial data of RIL.This will help you to track company

IPO (Initial Public Offering) What is IPO? This is a Process of listing of any company on exchange. Price of the share is decided by company management as per the guideline of SEBI.  (SEBI is the govt. body which regulate stock exchanges and companies listed on exchanges) people will apply in this IPO if they are interested and subscription of IPO will end in 3 days. after some days (previously decided date) listing of that company will done and then share will trade in secondary market after listing.again demand and supply theory will work here if demand of IPO is more then allotted shares than listed price will increase and if supply is more then demand then prise of share will decrease. we will discuss on IPO in detail separately.  How to apply in IPO? Simply you just have a Demat AC where your allotted stock will store and Trading AC with you can buy or sell a shares. You can open your Demat and  Trading AC with banks or brokerage companies. How to check quality of that company

Stock Market: Stock Market is the place where you can invest in a company which is listed on stock exchange. you can buy a stock (share) of a company and get some ownership in that company so if company make profit than your investment (share you bought) will increase and if company make loss then your  investment will decrease.  Lets see in simple way: if you bought a share of a XYZ company at 100 Rs and comckpany make some profit and demand of that particular stock is more then price of that stock will increase and you will earn the profit. why stock market needed? let me give you an example if you want to start a business but capital(money) required is  200000 and you have just 100000 so you go to your friend and try to convince his/her to join business and you promise him/hem to give 50% of partnership in your business. same thing but in big scale if any company wants a fund than they offers a partnership to public and give them some partnership in their company.