31/07/2015 Beginner’s 

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Read about the inspiration behind sharemarketschool.com

First word from the Author

Financial Discipline for all.

Millions of people fall prey to financial frauds;millions suffer from financial imbalance
despite earning good money;even billioners have committed suicide due to financial
problems- The root cause of all this is failure in handling their money in an informed
Beginner's Lessons
manner. People from all walks of life face this problem of financial indiscipline.In the
following articles,we detail the basics one must follow while handling their money in Point Blank
order to stay safe and have peace of mind. Some are concepts, while others are
Financial Discipline for all.
practical tips.
Investing Basics
The story of Adolf Merckle
Shares & Stock Markets
Principle 1.Finding money !
Introduction to Financial Statements
Principle 2.Time value of money
Financial ratios.
Principle 3. Compounding
Stock investing strategies

Principle 4. Interest rates. Technical Analysis I

Principle 5: Cash reserves and idle cash. Technical analysis II

Principle 6: Never stretch beyond your limits. Before Picking up stocks..

Principle 7. Don’t try ‘Get rich quick’ schemes. Choosing a Broker and opening Demat
Accounts
Principle 8. Inflation
Make your debut !!
Principle 9. You are not safe with fixed deposits alone.
More ... from stock markets.

Principle 10. Have a Monthly budget Valuation of shares

Principle 11. Utilize credit cards wisely. Futures and Options - The basics.

Principle 12. Lending money to friends and relatives.

Principle 13. Signing surety for friends. Most Recent

Principle 14: Multiple streams of income. The week ahead: Expect the markets to
trade sideways..
Principle 15. Do not spend recklessly
The week ahead: Poised at critical
Principle 16. Avoid financial litigations hurdle…

The week ahead: Inflation data and Q1

Principle 17. Pay your taxes.
to guide the markets..
Principle 18. Safeguard your documents. IIP data and Q1 results to drive the
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market sentiments..
Principle 19. Insurance is a must.
The week ahead: Greek crisis to decide
Principle 20. Know your net worth the market mood..

Principle 21. Think of retirement when you’re young! Rain distribution and derivatives expiry
to guide the markets..
Principle 22. Diversify your investments.

Principle 23. Valuation is the key to right investments.

About Jins Victor
Principle 24. Gold – A must in your portfolio

Investing Basics Jins Victor is the founder of

www.sharemarketschool.com, a
Get a firm grip on what investing is all about in this series of investing lessons. The website for share market enthusiasts.
articles in this section will give you solid idea about what investing is all about , where Based in Kochi, he heads one of the
you can invest and the risk involved in investing . leading financial consultancy firms in
Kerala. He is an avid follower of stock
What is investing?
markets and invests in his own
Why is investing important? account. Through this website, he
shares his experiences and knowledge
Where can you invest? and teaches how to make money from
share markets using solid rules.
Which investment is best for you?

What care should one take while investing?

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What are the stages in investment process?
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What is the risk involved in investing? to you for free via Email or RSS

When should you start Investing?

What should be the right mindset for investing? [email protected]

What is Financial planning?

Investing or gambling?

Should you Borrow Money to Invest?

Thumb rules to build wealth

Lessons in computing returns – I Percentages

Lessons in computing returns – II Simple returns

Lessons in computing returns – III Compounded returns.

Lessons in computing returns – IV Returns from shares.

Lessons in computing returns – V The Rule of 72

Lessons in computing returns – VI Rule 114 and Rule 144

Lessons in computing returns – VII Break even return

Investing vs Trading vs Speculation

5 steps to become a smart investor

Shares & Stock Markets

In this section, know more about shares, stock markets and market indexes. The term
‘stock market’ appears in the news every day. What is a share? What is a stock market?
Why do we need a stock market? Where does the stock come from to begin with, and
why do people want to buy and sell it? What is a market index? What is Sensex? How is

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index constructed? If you have questions like these, then, the following articles will open
your eyes to a whole new world.

Some truths about stock markets

Stocks-explained

Basic charcteristics of shares

Should you invest or trade in stocks?

Benefits of owning shares

Stock markets in india

What is a stock index?

BSE stock classifications

What is Sensex? How is it calculated?

What is nifty? How is it calculated?

Do stock indices tell the right story?

Bulls, Bears and Stags

How much money should you invest in stock markets?

What drives the stock market ?

What are Blue-chip shares?

Invest for a long term or short term?

Ethical Stock Investing

Indirect way to invest in stocks –Mutual funds.

The Only 2 ways to buy stocks – Primary markets & Secondary markets.

Stock Market timings.

Introduction to Financial
Statements
Whether you watch analysts on Television or read articles in financial magazines and
newspapers, you’ll see lot of financial jargons being used by them, which makes it
difficult and confusing for you to understand what they actually tell. If you already have
an understanding about what balance sheet and income statements are, then this
tutorial will help you to get a better grasp on the whole subject. If you are totally new to
the field, don’t worry at all since these lessons are written from the angle of a stock
market investor and it’s meant teach you the important factors that make or break an
investment decision.

Understanding Annual reports.

How to read an Annual report.

Introduction to financial statements

The components of financial statements

The Income statement : Basics

The Income statement : Understanding the “matching principle”.

The Income statement: Understanding the components.

The Income statement: Profits

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The income statement : Difference between earnings and revenues

The Income statement :Understanding Depreciation

The income statement : Revenues – an important figure.

Balance sheet : what is it?

Balance sheet components: Assets

Balance sheet components: Liabilities and Equity.

Cash flow statement. – An introduction.

Understanding Cash flow statements

More about cash flows.

Financial ratios.
As mentioned in the first chapter the first step to become a smart investor is to learn
the basics. Any investor interested in stock analysis should be able to calculate financial
ratios. The basic source of these ratios is the company’s profit & loss account and
balance sheet that contain all kinds of important information about that company. The
ratios really help to bring those details to light and identify the financial strengths and
weaknesses of the company. When assessing ratios, it is important that the results are
compared with other companies in the same industry and not to be taken in isolation.
What may seem like a poor ratio at first glance may well be normal for that industry
and, of course, the reverse applies, in that what may seem a good ratio on its own,
could be below average for that industry. This session lists out the formulas and
relevance of ratios used in stock valuation.

Introduction to financial ratios

Understanding Earnings Per Share (or EPS)

Price to Earnings ratio or P/E ratio

More about P/E

Measurement of size- market capitalization

More about Market-caps.

Understanding price to sales ratio

Understanding price to book ratio

Understanding Dividend pay out & retention

Understanding Dividend yield & Earnings yield.

Understanding ROE & ROCE.

Understanding interest coverage ratio

Evaluate debt-Understanding Current and quick ratios

Understanding PEG ratio

Stock investing strategies

There is no one way to pick stocks. Every stock investing strategy is nothing more than
an application of a theory – a “best guess” of how to invest. And sometimes two
seemingly opposed theories can be successful at the same time. Perhaps just as
important as considering theory, is determining how well an investment strategy fits

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your personal outlook, time frame, risk tolerance and the amount of time you want to
devote to investing and picking stocks. To have your own stock investing strategy is very
very important. This chapter takes you through the various stock investing strategies
followed by investors.

Technicals vs Fundamentals.

Stock investing strategy-Fundemental investing

Stock investing strategy: Technical investing

Stock investing strategy- Value investing

Stock investing strategy – Growth investing

Stock investing strategy- GARP

Stock investing strategy- Index investing

Stock investing strategy-Momentum investing

Stock investing strategy-CAN SLIM

Stock investing strategy: Contrarian Investing.

Technical Analysis I
If value analysis was all about fundementals, technical analysis takes a completely
different approach. It doesn’t care about the ‘value’ of a company. The only concern in
this approach is the price movement and volume. It is important that you learn the
language of technical analysis because, many share market analysts combine
fundamentals and technicals when they speak. This series of articles will help you to be
familiar with technical analysis terms. Read on.

Technical Analysis

Types of Charts

Trendlines

Support and Resistance

Importance of Volume in Technical Analysis

A study of chart patterns

Continuing patterns 1 : Flag & Pennant

Continuing patterns 2 : Triangles

Continuing patterns 3 : Cup with handle

Reversal Patterns 1 : Double tops and double bottoms

Reversal Patterns 2 : Head and Shoulders

Reversal Patterns 3 : The Wedges

Reversal Patterns 4 : Rounding Bottom

Reversal Patterns 5 : Triple tops and Triple bottoms

Summary of Chart Patterns

Theory of Price Gaps

Technical analysis II
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The second part of our technical analysis series in which we will look in detail at certain
technical indicators and oscillators and about how to use them effectively. There are
hundreds of indicators in use today, with new indicators being created every week. Even
with the introduction of hundreds of new indicators, only a select few really offer a
different perspective and are worthy of attention. Strangely enough, the indicators that
usually merit the most attention are those that have been around the longest time and
have stood the test of time.

Introduction to technical indicators

How does a technical indicator work ?

Oscillators

Types of indicators/Oscillators

Understanding Moving average

Understanding MACD

Understanding Average Directional Index (ADX)

Understanding RSI (Relative strength Index)

Understanding Stochastic oscillators.

Understanding Williams %R

Understanding Average True Range.

Understanding Bollinger Bands.

Before Picking up stocks..

Now that you know about share markets , Earnings , Profits , Book value, market
capitalization, profits and dividends, it’s time to accumulate some more useful tips and
use it effectively in picking up a good stock.

Can you measure management effectiveness?

Using price and volume to find market trends.

Bonus shares – A positive sign.

Using Beta to gauge volatility.

Is a stock buyback scheme a good sign?

Using Advance / Decline to spot market trends

Keep an eye on the factors that cause volatility in stock markets

Balancing your investments.

Shareholding pattern – it tells you a lot.

Is it possible to predict Markets accurately?

3 silly mistakes a beginner should avoid.

Choosing a Broker and opening

Demat Accounts
With so many stock brokers around, here’s a little guide to find out the right broker for
you.

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What are Demat accounts?

What is a trading account?

Who is a stock broker?

How to choose a Stock broker?

The Broker’s role in investing.

Investment advisors- An introduction.

What is a portfolio? What’s portfolio management?

How to select a Portfolio Manager?

How much should you pay for the right portfolio manager?

Investing in Indian stock markets- A guide for NRI’s

Going Online

Understanding the online trading software

Online vs. Offline

Keep an eye on brokerage costs.

Make your debut !!

Now you know about stock and stock markets, about technicals and fundamentals,
about de-mat accounts. What we have discussed above are only the basics.See for
yourself if you have some grip on your trading platform- how to transfer money, how to
buy and sell in live market etc.. The following lessons would give you more tips. The real
process of investments starts only once you master the techniques of valuation and
portfolio management. There’s a long way to go…

The first step – Paper trading.

Initial wealth building strategies- 1

Initial wealth building strategies – 2.

Initial wealth building strategies – 3

Buying & Selling shares

How to practice buying/selling shares in live market.

Don’t let emotions take control

4 simple ‘Must follow’ rules for everyone.

Stop loss orders –A way to protect your capital

Cost Averaging- A strategy you should use carefully.

Say no to day trading !

Never attempt short selling

3 basic questions you should answer before investing.

Most common stock market mistakes.

When to sell your stock

Investor protection – Message from the Bombay Stock Exchange

10 Mistakes a beginner should avoid

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More … from stock markets.

There’s more from the investing world. This section contains articles on many topics
that’s part of stock markets..

The Diwali effect ..

How does news affect stock prices?

How is a bonus issue different from a stock split?

Dividends vs Bonus

Dividends and relevant dates

Understanding Rights Issue

How does interest rate affect stock markets?

How do FI investors affect stock markets?

How does IIP data affect stock markets?

Pledging of shares -A must check.

Important dates for Indian stock investors.

Circuit breakers

Insider trading

What is Rajiv Gandhi equity savings scheme (RGESS)?

Valuation of shares
Valuation is all about knowing what a stock is actually worth. Knowing the actual worth
of a stock is a pre-requisite for making smart investments. By going through these
series of simple articles , a beginner should be able to learn the basic concepts and also
some practical methods to pick stocks at reasonable prices. It’s written in a language
that anyone can understand. It helps you to decide whether a recommendation given
by your broker is valid or not.

Finding shares to invest.

Qualities of a good investor

Sources to pick stocks for valuation.

History Scan – An introduction.

Eight point checklist for history scan

Qualitative data analysis

How to gather qualitative information?

5 Investment concepts

Concept 1: Intrinsic Value.

Concept 2: Book value

Concept 3: Margin of Safety

Concept 4: Risk premium

Concept 5: Cost of equity.

Estimating EPS-Growth rate

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Estimating the P/E

Simple Valuation Method- I

Simple valuation method- II

Value investing common sense.

Futures and Options – The basics.

The world of high finance is all about risk; infact, it’s all about taking calculated risks. So
far all what we discussed was about buying shares with the money you intend to invest-
on the spot. Since the whole deal is done with pure cash, It’s also called ‘cash segment’.
But that’s one part of stock markets. If you have the heart to take calculated risks, then
section is for you ..

Introduction to Derivatives.

Types of derivatives 1 – Forward contract.

Types of derivatives 2 – Futures contract

Types of derivatives 3 – Options contract

Who plays in this market?

Why do derivatives market exist?

Futures: Types of contracts

Futures: Understanding the basic terms

Futures: Understanding ‘Open interest’.

Futures: Principles of pricing.

Futures: Compounding and discounting techniques.

Futures: Arbitrage & its meaning.

Futures: Risk levels of participants.

Futures: Hedging & it’s importance

Futures : Understanding basis risk

Futures: Contango and backwardation

Futures: End note

Options: Kick off

Options: Understanding strike price.

Options: Moneyness.

Options: Premium

Options: Option styles

Options: Choices of action.

Options: Break-even point.

Options: Put-Call parity-Part I

Options: Put call parity – Part II

Futures vs. options

Option valuation: Introduction

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Option valuation: Upper bounds and lower bounds – Part 1

Option valuation: Upper bounds and lower bounds -Part II

Option valuation: Upper and lower bounds -Part III

Option valuation – Method 1.

Option Valuation: Method II (Part 1)

Option valuation: Method II (Part 2)

Option valuation : Method III

Option Greeks

Understanding Options delta

Understanding options Gamma.

About Us © 2010 Share Market School. All rights reserved. Website developed by Toobler Technologies

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