How to survive a bear market

A bear market can be referred to as the situation in the market, where decline of atleast 20% of the stock prices or so and overall negative sentiment persists in the market.

Bear market is really tough time for the share market investors. It is this time, the investors learn best lessons in the market. Surving a bear market is as good as earning profits in bull market.

Let’s discuss some facts on how to survive a bear market.

If you are a share market investor, then you should understand that bull market & bear markets are part of business cycle. Both existed in the past, existing in the present and surely exist in the future. Learn lessons from the past.

May 24, 2009 | Filed Under You should know | Leave a Comment

About CEO, COO and CFO of a company

CEO, COO & CFO forms the top management of the firm and look after day to day to operations but with different responsibilities. These individuals are hired by board of directors.

CEO(Chief Executive Officer): CEO is one of the highest ranking corporate officer and the head of the management. With the assitance of senior managers CEO implements the decisons approved by board of directors. CEO directly reports to chairman/board of directors . Sometimes, he will be designated as president of the company

COO(Chief operating officer): COO is one of the highest rank manager of a firm responsible for managing the day-to-day activities of the corporation and for operations management. He is often designated as vice president. Read more

About Board of Directors of a firm

Board of Directors are the individuals elected by the shareholders of the company who oversee the activities of a company. Board of Directors are some times referred to as board of trustees, board of governors, executive board or simply ‘the board’.

The board of directors is made up of two kinds of representatives. One: Internal individuals within the company. These can be CEOs, CFOs etc who work for the company. The other kind is external individuals who are independent from the company.

The responsibilities of board of directors include

Governing the organization by establishing broad policies and objectives
Accounting to the stakeholders for the organization’s performance.
Selecting, appointing, supporting and reviewing the performance of the CEO and other high level management team
Formulating company’s business strategy
Approving annual budgets

May 23, 2009 | Filed Under Stock market Terminology, You should know | Leave a Comment

9 tips for success of share market investors

The below mentioned are most important tips for success of share market investors. The below are designed keeping in mind of long term investors.

1. Never invest borrowed money

If you invest borrowed money, it is very tough to get real gains. Your real gains will be the left over money(if any) after you repaid the borrowed money with interest. Only few lucky fellows may find success with it and for others it will be a night mare.

With borrowed money, you don’t have freedom to leave the investments for long term. Even small things in the market leave you panic and you will end up with wrong decisions. Always, invest the money which you feel won’t impact your life even if you lose it.

2. Do your own research

The first thing to avoid is depending on the tips you get from brokers, colleagues or so… There is nothing wrong with listening to the tips, but if you make decision without doing analysis from your side then don’t blame them if you get negative result. It is your responsibility to make the decisions on your own understanding. If you don’t have time and knowledge to do the research on stocks, better go for mutual funds. Read more

May 23, 2009 | Filed Under Fundamental Analysis, You should know | 2 Comments

What is Book Value of a Company

Book value of a company is one of the most important factors while investing in a company. In layman’s terms the significance of book value per share is the amount that can be paid on a single share in case of bankruptcy or liquidation.

It is defined as the ratio of Share holders Fund and Number of Outstanding Shares.

Share holders fund is the product of face value and number of shares plus reserves and surplus (undistributed Profit).

Book Value = ((Face Value of a share * Number of Shares) + Undistributed Profit )/ Number of Shares

May 14, 2009 | Filed Under Fundamental Analysis | Leave a Comment

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