Corrupt or Not ??

For once if we talk practical and do not consider the elite of india and even the upper middle class , the majority does not even understand or care what the GDP , CRR , REPO RATE is.All they need to know that why is India growing without them and why they do not see themselves being a part of the great India shining story.While all the tabloids , E-zines and papers are portraying India as the next big superpower , all this appears just to be a marketing and sales pitch for the generation to splurge more.

If you have been reading the newspapers lately then you must have derived that the comman man is the biggest loser in these times having to bear the brunt of inflation and increased cost of living.The multi thousand crore scams, government schemes , subsidies have all become just another way of looting the country.But then who should be blamed ?? Some say the UPA ..some say the previous governments.But the very fact is that the UPA , the NDA and any other party for that matter are all one and the same.And moreover we ourselves have let go of the rights to blame any government or individual for we are an integral part of this corrupt system.

 Here i should mention a piece of text i came across on the internet in which Ashleigh Brilliant says'' I want either less corruption, or more chance to participate in it   ''I see rallies , protests against politicians , bureaucrats by people who themselves have been corrupt all their lives.Just that their levels and pace of corrupt practices have been of  different levels,much lower that what could catch the media attention. Everyone shares angry status updates on facebook , twitter after a scam breaks out.Folks, must tell you..get out of that arm chair,off the internet and start contributing if you want to.Writing slogans and updates to decorate your facebook wall is not going to make any difference. 

I myself have been corrupt at different levels and have lost my right to protest against such scams and so have YOU.The news feed on Anna ji has become a source of entertainment for many and all would be forgotten as soon as the its off air and the things like Swayamwar and Roadies again garner the attention of the 'In' thing hungry.

Those netizens who say the government is corrupt and they are not have therefore acquired the right to vent the anger on personal blogs and networking sites.They say A Raja looted the country of 2 lakh crore rupees , Mr Kalmadi bought toilet papers for Rs 5000 , Telecom companies swindled money , Air India was mismanaged....Yes all this has happened but are you guys any different.What are you doing about it ?? Let me tell you..Nothing.In fact everyone of us is a part of this corrupt regime.

Swiping that attendance card as a proxy  for someone, making fake reimbursement bills , bribing a babu , breaking a signal , real estate payments in black components , not paying enough taxes also amount to corruption if most of the anti-corruption crusaders are unaware in case.

This very well reminds me of the movie critics writings columns in newspapers and on the Internet bashing the story lines , cast and the quality of the movie.They can tell whats wrong with a movie and reading the column makes you believe that every movie this critic will make henceforth will turn out to be a blockbuster for the fact that he knows everything that needs to be done to make a good movie.Some even tried to but then realised that its better to remain a critic.It is anyway far easier to blame or bash anything sitting in the office than trying to solve the purpose.

I am an info junkie and want to know every piece of information and news that i can get my hands on.Orkut , Google plus, facebook, twitter and the online world is my workspace and for the last two days its all about shree Anna Hazare ji and the team.They say the man is incorruptible and the records suggest the same.The movement involves a motive that can change the system for good.But all this will not be solved with the JanLokpal bill because then every single Indian will have to be put behind bars.

Also the reports coming in suggest that several politicians including those accused of being involved in scams have pledged support to Anna Hazare ji.Surprised ??Is it Any different than what we are doing ?? Let us start to follow what we are preaching .It will take some time for us to adjust the temptation of giving in to the corrupt regime but if we are able to do this it will be the true JanLokpal Anna ji is looking for.

Also everyone might argue that we are such not by choice but because the system makes us behave that way.But then if you are this angry at the system , how about trying the bottom up approach...

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Weekly Report ( with charts )

@For the week ending August 19.
The week again saw a fall of around 4.5 % in the index taking down the pack with it.A lot of stocks lost much more and IT and Banks were the big losers where the indexes lost 5.6 % and 7.5% respectively.The stocks right now may appear to be at a good level relative to the highs that they have made but the fall may just not have been arrested yet.Anyway a bounce or relief rally is on cards given  the extent to which the markets have fallen but for that certain levels are to be followed..








FII & DII Turnover (BSE + NSE)

(Rs. crore)
	FII			DII
Trade Date	Buy	Sales	Net	Buy	Sales	Net
19/8/11	2,816.01	3,718.62	-902.61	1,653.42	1,230.17	423.25
18/8/11	2,388.42	2,877.09	-488.67	1,291.78	961.36	330.42
17/8/11	2,262.74	2,670.42	-407.68	1,061.56	892.14	169.42
Aug , 11	32,308.95	41,265.45	-8,956.50	22,165.39	15,445.98	6,719.41
Since 1/1/11   *	409,259.50	423,255.23	-13,995.73	194,740.41	173,708.39	21,032.02

FII's have been  on a selling spree this august as you can see in the report downloaded from bseindia.com.The continuos downtrend and the selling pressure is not giving the market opportunity to bounce back.To add to it the continuous fall of the American indices Dowjones and Nasdaq are also falling continuously.Let us see the charts to get hold of the situation..

Nifty short term charts show that the index is in a downchannel even in the short term timeframes and no indication of upmove can be seen.Only hint of a rel;ief rally can be seen if the downchannel is broken which would cause the short term shorts to run for cover and cause an upmove.whether the upmove will last is another question.
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@For the week ending August 5


  The global cues has been causing a lot of volatility in india also and this time it was broadly on the downside.The gapdown open resulted in nifty testing sub 5100 levels.Though there was a recovery intraday , nifty still closed 120 points down for the day at 5210 levels.

Now as per what i read the bad news has not stopped coming in and the culprit in most cases is the US. In a new developement  S&P lowers United States credit rating to AA+ which is reeling under deficit ,unemployment problems. But as what can be considered a rare good for the scenario is that the unemployment rate has reduced to 9.1%. There are talks all around of the country falling into a double dip recession again.If that happens then be very sure that we are in for a trouble again bacause the shocks are sure to travel across the continents.

What are we supposed to do now ??  Well ..Here are some charts presenting what can be expected..

                                                                    

All the charts above ( Sensex , Banknifty and Reliance India respectively ) here show that the downtrend is still very much on for the short term though there is a possiblity of a quick retracement.If it happens and sustains we will again try to analyse the fact that its just retracement bounce or continuation of the Major uptrend.Till them no major longs advisable on the upside.

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Speak Asia Online..My View

Now how could i not write my views about something the nation is talking about ..SpeakAsiaOnline , an online company which pays you for your valuable opinion and said to be Asia's largest online survey company  claims to have a business model, returns from which can easily beat any investment options available.Before we get into calculations here is some information about the company and mode of operations.

 

SpeakAsia claims to be located in Singapore and is owned by Harinder Kaur.The company operations remain to be completely online which as per laws does not require them to have a country specific registration.This was informed in reply to the questions of it not having an office or not being registered in India.The company has seen exponential growth in India and registered approx 15 lakh panelists or opinion provides in a very short span of time.

The formal introduction doesn't provide much information about the way the company is operating in India.The mode of operation is similar to the MLM ( multi level marketing ) formations shown here where a person joins the company and then forms a chain of people below it in a fashion that it fetches an incentive for all the people that have joined below the person in the chain.Here person 1 will receive monetary incentive from the company for making 2 people join.similarly person 2 and person 3 will also benefit from those who have joined below them.Such a binary chain like structure moves in to exponential growth mode going beyond some levels as more and more people get involved  and thus in turn refer more people to join.

When you join Speak Asia Online you pay a certain amount ( 11000/- ) for a year to join them as a premium panelist.After which you receive 2 survey per week which you can fill anytime within a month and receive 500 INR per survey from the company.Also if you make people join below you for the same mentioned fees you tend to receive an incentive in the form of referral income.This is mainly to motivate people to make more people join.While the person who has referred gets a small incentive, majority of the money goes to the company.The newly joined people also get survey to fill and can make more people join to receive incentives.

Now the real deal....Is the company for real or a big scam is in the offing?? We cannot be judgemental because a lot of 'SpeakAsians' do believe that the company is genuine and has fulfilled all its promises and payments.But still the recent reports have put doubts in the minds of many for which the company also could not provide the answers.

1) ROI : Return on Investment : As per the company franchises and agents ( panelists ) a return of 48000 on an investment of 11000 for an year is being promised.That amounts to a return of more than 400% in a year.Now a person not new to investing and with some experience can easily guess why do i smell fish in this.Being actively involved in stock markets i can easily suggest that with this much growth rate when compounded you can easily leave warren buffet behind in terms of wealth.This is the very reason that is making people join the company i.e high returns and quick money without much work.

Company's Take : As per what was informed in the recent press conference it was said that they do not promise X amount of returns to the investor.Moreover they also refused to accept taking money for registration .As per them the amount being collected from investors is for the subscription of an e magazine or ezine from the company.All this is clearly contradictory to what the agents and franchises have been telling people and selling memberships.

2) Panelist : Also to notice is that anyone and everyone can join and fill surveys and there is not minimum qualification or prerequisites needed to join.Moreover any one person can join multiple number of survey id's.for example i can buy 10 ids and fill the same survey again and again and receive money for all and make more money.Only that i need to pay 11000 * 10 to have more id's .Now why would any company pay more money for same set of opinions .clearly the motive is to generate maximum amount from a single person

Company's Take : Here the company states that a single person is allowed to join multiple survey id's so as they can have people from their family express their opinion and not fill the same surveys by themselves.But also in the conference they mentioned that they are not a survey company but an integrated market research company and I honestly do not know what that means :)

3) Clients and Currency Conversions : Speak Asia has mentioned that companies like bata , samsung and icici bank are some of the clients it is providing survey research reports to,but as have been confirmed by various news agencies all these companies have denied buying any survey from Speak Asia.Also similar names were taken by a marketing officer of the company while being interviewed by a news channel as being their clients.Also the officer said that the foreign exchange transactions in India take place through  ING VYSYA bank.

Company's Take In the press conference when asked this question the company representative apologised to the the mentioned companies and blamed some communication error.They offered an unconditional apology which is good on part of the company.

4) Earnings  : The only visible source of earnings for the company is the subscription fees they receive for the e-zines and while 15 lakh people have already joined the earnings are astronomical.The modus operation appear similar to the ponzi scheme where people joined at different levels pay for the people at previous levels.

Company's Take : As per the company they make most of their money from advertisements , selling market research.They do not promise to return any money to investors but they will continue to receive the ezines for which they have paid.Also they said that the client list cannot be shared with others as this will affect their business.

Personal experience ; Now if you ask me , i myself am a panelist in the company and joined after repeated persuasion by a friend to join.the payouts till now has been smooth which exactly is the reason why people earning well from the company are not ready to believe they have done anything wrong.

Contrary to what the company says agents and franchises at the ground level are promising the returns of 400% to people and have also made people join who are not capable of reading surveys let alone fill them.

Clearly the current panelist are being paid on the expense of new joining and until the company changes the business model drastically the current returns are hard to sustain ( read impossible ).

The company has also refused that they have any operations in Bangladesh after joining hoards of people in the scheme there.Similar conditions can easily be seen in India because as per news channels regulatory bodies are soon to get involved and certain high profile people are to file FIR against the company result of which ultimately will declare whether the company is genuine.

My advise to all the Speak Asians who trust the company ; make hay while the sun shines but also remain cautious before the thing get more clear..Personally i would continue with same number of Id;s as my investment is already recovered and will not invest any more money into the company.As they say..Money Saved is Money earned ;)


PS : I have tried not to hurt the sentiments of SpeakAsians by being judgmental about the company, that is for the readers to decide.but still the returns offered seem to be unsustainable and by taking a practical , non emotional approach you can save yourself from big losses. 

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Importance of Stoploss Levels..

How often do you remember using a stop loss order on your trades ?? Even if your answer is 'never' , it will hardly surprise me because this is the most important aspect of trading in the stock markets which remains to be ignored by new traders and Investors.While the seasoned traders give utmost importance to it , the reason of which is explained here.

 
The term 'Stop Loss' order itself indicates the very purpose of it. Lets us take an example..

Suppose You have bought Stock X at 1000 for a target of 1200 or more.That places the profit potential at 20%.But what about the loss potential ..or exit strategy if in case the stock does not go up and starts crashing.The trade means you are ready to accept a profit of 200 rs per share on your trade but have not assumed of the condition in case the stock goes down.

For that purpose the Stop loss level comes in.The purpose is to define the maximum loss you are willing to take for a profit potential of rs 200 on a 1000 rs stock ,or the other way round the % ( percentage) of your money you are willing to risk to make a profit of 20%.You cannot and should not take unlimited risk for if the stock moves southwards you can face huge losses on your capital and along with it face blockage of capital.

Also to make you familiar with the process let us define the term risk/reward ratio.The Risk ( r )you are taking on your capital to make a profit or reward of (R) and to make continuous profits in the markets your r/R must be less than 1  given you can have a consistent accuracy of more than 50% in your trades.

                                               r/R ( risk/Reward ) < 1    

The reason can be explained with the stock X you bought for 1000 rs for 1200 rs target.Suppose you have a sell order for Stock x at 900 to stop your loss from getting bigger than 10% in case the stock starts falling.Now assume you do 10 such trades 5 times out of which the target is achieved and 5 times the stop loss gets hit.The accuracy stands at 50% and the total profit comes out to be :

            

                                      ( 200*5 - 100*5 ) = 100*5 = 500 

Thus in spite of taking 50% wrong decisions you end up with a profit of 500 rs or  50% on your capital from your trades.Now consider these cases.

Case 1) No stop loss : That makes your risk infinite for when some of the stocks when start to fall in bad times , never see their previous highs ever again.This can result in huge losses.

Case 2) risk/Reward=1 : i.e stop loss of 200 and a profit potential of 200 in the case of stock X.Thus after being 50% right and 50% wrong we end up making no profits.More accuracy would help in this case though.              

Case 3) risk /Reward < 1 : i.e bigger target and a smaller loss risk.These trade when made even with 50% accuracy can prove to be rewarding.

Case 4) risk/Reward > 1  ( stop loss greater than target ) : Taking such trades with big stop loss orders is not advisable.As only a few bad trades can result in a big loss.

All Above calculations apply only if you apply a stop loss order to your trades either long or short.Without stop loss orders surviving in the stock markets is near to impossible.Also another factor that plays a role in deciding about Stops is the time frame you are entering the markets. In case of investments and larger time frames exit options can be relaxed if you believe in the company and the future prospects.But in any case,being on the safe side doesn't hurt.

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Stocks to Watch ..

A brisk upmove to previous highs and equally fast crash with a whole lot of A grade stocks down to mouth watering levels.That sums up the story for the last 2 months.The fall has seen many good stocks correct by 10-20 % . And if you have the cash with you these levels may very well justify the re-entry into the markets.But remember , never enter at once and deploy what you have in parts

Stock lists .

L&T : Has already corrected to 1644 levels from the last month high of 2212.A huge 2 months loss for a company of L&T 's stature.The company was planning to restructure the business into 9 verticals plans of which has been recently put on hold.technically after a brisk 2 month fall a pullback is on cards.Stock has taken support at 1500-1600 band accumulation in which was also advised in Investlane's stock calls.

Sbin (State Bank of India ) : 3500 - 2600 levels. Moreover technically its resting on the breakout line of cup and handle formation which in itself is a very bullish sign.Add to it the price its at after touching 3500 levels , that in itself makes it a good short to medium term buy.

The Plan remains the same as always.Employ 50% of your cash now and hold.A further fall will only provide more opportunities to enter the valuable stocks.while the downside in the mentioned stocks appear to be limited the upside potential looks good.Moreover if the falls sustains further we will as always as per the strategy will be left with more cash to deploy.

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