Markets Archives - GUJRAT INDIA

Follow 10 Rules & Learn How Not To Lose Money In Stock Markets

Investing and trading are as professional as running a business. Just like any other business, much planning is going to invest and trade. The aims, aims, structures, targets, budget allocation and monitoring that apply to online stock trading and investing as much as they run in business.

However, losses are one aspect of online stock trading and investment that is at least understood.

In the business of investing and trading the stock market, there are two main inputs – information and capital. Information can be borrowed or it can be your own. By lending information, we mean relying on someone’s recommendation or listening to the media or just a friendly ‘tip’ to buy the stock. Capital is the money given for an online commodity trading business and investment.

Both inputs include information, especially whether a trader or stock market investor is similar to business assets, using which company is derived from its revenue. Money is on the other hand as consumables or raw materials that are used to add value and in turn generate more money.

When running manufacturing units there are some materials that will either be a waste or the output will not be in accordance with the quality norms. Initially, during the routeing process the losses would be more, but as production is stabilized, losses are falling and very negligible at all compared to the overall layout of things. Similarly, in online stock trading and investing the losses, the expenses one needs to take to learn.

So, the whole game of reducing your losses and leaving your profit is run.

Here are 10 ways that can help you reduce your losses.

1. Know what you want: The first thing for a person is to know if he is a trader or investor. Even in stock trading, he will have to know what kind of trading he would like to do. Would you like to be a sweeper, a daytime trader, a swing trader or a trendy and personal follower? Similarly, when investing, the person needs to question whether it is a value investor or you want to invest in growth stocks or turning stories. Knowing exactly what you want and what you’re looking for is half the battle you’ve won. In this way, one would not run to try the next great idea in the town and add to their losses without knowing what they were doing.

2. Getting a plan: Once the person has decided that he wants to be a trader or investor, the next move is to get a business plan in place. The plan not only includes the strategy that will be played but also the whole process of the amount of time allocated to research, money allocation, stockbroker choice, hardware and software requirements (trading app) and the work. But central to the business plan is the strategy that the trader or investor will use. The strategy must be studied to the detailed details before submitting it to a test. All levels of access and departure, loss prevention and re-registration in the trade should be calculated out. The idea behind having a plan in place is not to respond to stock market developments but to be proactive in advance for any backup.

3. Test of the scheme: Before starting to trade or invest with real money it is important to test the strategy. The post-test test gives an indication of how the strategy has worked over time. Knowing how long a period of losses gave an idea that a series of such losses could take place in the future. Therefore, the stock market trader is not harassed and losses are a trust in his strategy and succeed in the loss of loss losses. The majority of market losses are taken by traders who try many systems and jump from one system to another after taking a few losses. Undertake a proven strategy, but in the case of losses one can break down their position so that the losses are limited.

4. Trust yourself and your strategy: The most important feature of a successful trader or investor is that they trust someone else but their own and their strategy. They take their losses in their path because they know it is part of the strategy that they have been following for many years. Beyond the losses, there are profit strands. If there was nothing wrong in the process of acting in the trade then the profits will take care of the losses. Do not trust your strategy as a businessman who does not trust his own product. Is it possible for the businessman to succeed if he sells a product that cannot be trusted?

5. Getting enough capital to start: Before starting online trading or investing, even part-time, it’s important to get enough capital. This is not only important to cover the losses that will take place, but also because there are opportunities there would be more than one job open in the market and the trader may have uneven balances. If the trade with a higher capital allocation loses one, the trader would only lose confidence in its system due to one trade. Share online trading and investment work on large numbers law. The law states that no single trade defines the trader or the strategy.

6. Data must be collected over a series of trading and then evaluated. A trader should have sufficient capital to continue so that he can collect enough data from the trading series. Taking small losses is important as it will keep emotions out of play. Online commodity market trader in its initial days would not be enough capital and a great loss can be cut.

7. Managing money: If there is one thing that will define whether or not a trader succeeds, regardless of its strategy, then it is the responsibility of managing money. Managing poor money over time will result in losses even if the trader has developed the best strategy. Similarly, a good money management system will help the trader maintain over a longer period even if it trades a bad strategy. The idea is to get the best from both worlds. Capital must be divided in a way that does not compromise more than 1 per cent of your capital on a single trade. This will allow you to collect a larger data point before increasing your size or allocating more capital.

8. Abolition of noise: Noise in the media is a key factor in online trading that divides and invests, and does not think about traders or other investors. It’s normal to be driven by ‘experts’ in the media that says where the stock or market is headed, especially in the formative days. There will be a small test of what these experts said in the past and how the recommendation will have worked out enough for the trader to stay away from them. Social media jobs on these specialists also bring the experience of others who followed the experts. If you need to be successful you must be your own man. You need to take responsibility for the losses and profits and not blame others for their recommendation. This can only happen when you stop listening to others and get your own style. Your own mistakes, even in small things like the internet, have stopped working, because you should ideally have a conflict arrangement. Only profit will start to pour out.

9. Measure your performance: you are your best coach and the best book you ever read as a trader is your own trading logs. Learn from them and make them a point not to repeat them. It is important for a trader to keep track of the number of winning crafts, loss of crafts and the average size of the loss and average earnings. A trader must succeed in maintaining the average amount of loss and the number of losses as small as possible. Just keeping the number of losses is small but take big losses by extending the stopping point.

10. Learn from your mistakes: It is important that you make all the mistakes one can do when you are in the learning period because if you learn from it, you will not repeat it. And if you’ve hit all the mistakes that can be done when trading, very few things will be done. It is very important to keep track of your trades and read it regularly, not forgetting the mistakes you made earlier. It can be possible to reduce losses by not replicating your mistakes. Losing loss and not learning from it is a bigger loss.

11. Learning to forgive and forget: Trade is a new trade. The previous trade that has led to gain or loss is history. Learn to forgive yourself if the previous trade was a loss and forgetting a winning trade because the next one can block you. Like a cricket where the bat cannot be over-confident even if it has hit the five previous balls out of the border, the sixth one can send it packing. It is important to maintain discipline and not go over the road in a winning streak as well as not having depression with a series of losses and trading stop. Online sharing trading has a lot to do with cricket, you need to stand in the wicket, a score of so many belts, although many can lead to a single and maybe few will not lead to any, but the key is to stand there for the loose ball that has to be hard and one you do not need to waste it. Rule 80-20 applies to trade as it has too many other areas. 80 per cent of the profit comes from 20 per cent of trading, but one will have to be there to take all the trading.

12. A trader should not join psychological losses, he should not take it personally, and that’s why it’s important to have a small trading when learning the ropes.

Information Feedback Loops In Stock Markets, Investing, Innovation And Mathematical Trends

It seems that no matter how complex our civilization and society gets, we humans are able to cope with the ever-changing dynamics, find reason in what seems like chaos and create order out of what appears to be random. We run through our lives making observations, one-after-another, trying to find meaning – sometimes we are able, sometimes not, and sometimes we think we see patterns which may or not be so. Our intuitive minds attempt to make rhyme of reason, but in the end without empirical evidence much of our theories behind how and why things work, or don’t work, a certain way cannot be proven, or disproven for that matter.

I’d like to discuss with you an interesting piece of evidence uncovered by a professor at the Wharton Business School which sheds some light on information flows, stock prices and corporate decision-making, and then ask you, the reader, some questions about how we might garner more insight as to those things that happen around us, things we observe in our society, civilization, economy and business world every day. Okay so, let’s talk shall we?

On April 5, 2017 Knowledge @ Wharton Podcast had an interesting feature titled: “How the Stock Market Affects Corporate Decision-making,” and interviewed Wharton Finance Professor Itay Goldstein who discussed the evidence of a feedback loop between the amount of information and stock market & corporate decision-making. The professor had written a paper with two other professors, James Dow and Alexander Guembel, back in October 2011 titled: “Incentives for Information Production in Markets where Prices Affect Real Investment.”

In the paper he noted there is an amplification information effect when investment in a stock, or a merger based on the amount of information produced. The market information producers; investment banks, consultancy companies, independent industry consultants, and financial newsletters, newspapers and I suppose even TV segments on Bloomberg News, FOX Business News, and CNBC – as well as financial blogs platforms such as Seeking Alpha.

The paper indicated that when a company decides to go on a merger acquisition spree or announces a potential investment – an immediate uptick in information suddenly appears from multiple sources, in-house at the merger acquisition company, participating M&A investment banks, industry consulting firms, target company, regulators anticipating a move in the sector, competitors who may want to prevent the merger, etc. We all intrinsically know this to be the case as we read and watch the financial news, yet, this paper puts real-data up and shows empirical evidence of this fact.

This causes a feeding frenzy of both small and large investors to trade on the now abundant information available, whereas before they hadn’t considered it and there wasn’t any real major information to speak of. In the podcast Professor Itay Goldstein notes that a feedback loop is created as the sector has more information, leading to more trading, an upward bias, causing more reporting and more information for investors. He also noted that folks generally trade on positive information rather than negative information. Negative information would cause investors to steer clear, positive information gives incentive for potential gain. The professor when asked also noted the opposite, that when information decreases, investment in the sector does too.

Okay so, this was the jist of the podcast and research paper. Now then, I’d like to take this conversation and speculate that these truths also relate to new innovative technologies and sectors, and recent examples might be; 3-D Printing, Commercial Drones, Augmented Reality Headsets, Wristwatch Computing, etc.

We are all familiar with the “Hype Curve” when it meets with the “Diffusion of Innovation Curve” where early hype drives investment, but is unsustainable due to the fact that it’s a new technology that cannot yet meet the hype of expectations. Thus, it shoots up like a rocket and then falls back to earth, only to find an equilibrium point of reality, where the technology is meeting expectations and the new innovation is ready to start maturing and then it climbs back up and grows as a normal new innovation should.

With this known, and the empirical evidence of Itay Goldstein’s, et. al., paper it would seem that “information flow” or lack thereof is the driving factor where the PR, information and hype is not accelerated along with the trajectory of the “hype curve” model. This makes sense because new firms do not necessarily continue to hype or PR so aggressively once they’ve secured the first few rounds of venture funding or have enough capital to play with to achieve their temporary future goals for R&D of the new technology. Yet, I would suggest that these firms increase their PR (perhaps logarithmically) and provide information in more abundance and greater frequency to avoid an early crash in interest or drying up of initial investment.

Another way to use this knowledge, one which might require further inquiry, would be to find the ‘optimal information flow’ needed to attain investment for new start-ups in the sector without pushing the “hype curve” too high causing a crash in the sector or with a particular company’s new potential product. Since there is a now known inherent feed-back loop, it would make sense to control it to optimize stable and longer term growth when bringing new innovative products to market – easier for planning and investment cash flows.

Mathematically speaking finding that optimal information flow-rate is possible and companies, investment banks with that knowledge could take the uncertainty and risk out of the equation and thus foster innovation with more predictable profits, perhaps even staying just a few paces ahead of market imitators and competitors.

Further Questions for Future Research:

1.) Can we control the investment information flows in Emerging Markets to prevent boom and bust cycles?

2.) Can Central Banks use mathematical algorithms to control information flows to stabilize growth?

3.) Can we throttle back on information flows collaborating at ‘industry association levels’ as milestones as investments are made to protect the down-side of the curve?

4.) Can we program AI decision matrix systems into such equations to help executives maintain long-term corporate growth?

5.) Are there information ‘burstiness’ flow algorithms which align with these uncovered correlations to investment and information?

6.) Can we improve derivative trading software to recognize and exploit information-investment feedback loops?

7.) Can we better track political races by way of information flow-voting models? After all, voting with your dollar for investment is a lot like casting a vote for a candidate and the future.

8.) Can we use social media ‘trending’ mathematical models as a basis for information-investment course trajectory predictions?

What I’d like you to do is think about all this, and see if you see, what I see here?

Why Business Owners Seek to Enter Foreign Markets

It is no longer news that business investors from around the world look at entering foreign markets in order to expand their local business operations or diversify their investments and establish new operations in the international market.

Every year, hundreds of entrepreneurial and growing companies consider international expansion as a marketing and growth strategy.

If you have been successful in your business for some time and you have already mastered everything about running a business, overseas expansion may just be the logical next move you have to make.

On the flip side, for a majority of others, just having an overseas registered company and business address makes more sense to them than moving over to these foreign countries to establish a brick-and-mortar office.

Whichever the case is, there are at least 7 reasons entrepreneurs incorporate an overseas company, subsidiary or a representative office.

1. EXPANSION. About 95% of the world’s consumer’s reside outside Nigeria. Entrepreneurs whose vision and target market is a global one would consider to enter new markets abroad thus increasing their company’s overall market share and growth potentials.

2. POSSIBLE UNTAPPED MARKET. The possibility of an untapped market in foreign jurisdictions may motivate a Nigerian entrepreneur to incorporate an overseas company, subsidiary or representative office of his/her local company. Nigerian entrepreneurs who produce and package local foodstuffs for sale abroad fall into this category.

3. PROXIMITY TO INTERNATIONAL CLIENTS/CUSTOMERS. Truth be told, the Internet hs done enough to bring businesses closer to buyers. However, for some reasons, several business transactions may still warrant a traditional business presence in the city or country of operation. An overseas office of a local company need not be that big, and may be a home business address, a paid virtual office, or a small/liaison office just for the sake of getting customer feedback and linking back to the Nigerian office.

4. CORPORATE IMAGE. In order to boost their corporate image in the eyes of customers, suppliers, investors and businesses, some entrepreneurs just register an overseas subsidiary of their Nigerian company. This gives their target audience an impression that they are a company with international networks. In situations like this, the “international entrepreneur” need not set up a brick-and-mortar office abroad, he/she only pays for a virtual registered office in such country plus a mailing and telephone forwarding service.

5. COMPETITION. The fact that competing businesses or brands are entering the overseas market and are doing well motivates entrepreneurs in similar businesses to follow suit.

6. INTERNATIONAL PAYMENT. There are quite a number of international banking options available to companies registered in overseas jurisdictions – whether you are currently established in the overseas country or operating the overseas company from Nigeria. Having a corporate checking account abroad makes international payment much more easier by direct deposits, cheque or international wire transfers.

7. MIGRATION. Entrepreneurs considering a migration or move to an overseas country may incorporate a company in the destination country pending the time of their travel.

The United Kingdom, for instance, grants an Entrepreneur Visa to persons outside the European Union to gain entry to the UK for business reasons.

The initial visa will give you 3 years in the UK; and if during that 3 years you can show that you met certain criteria, you can then apply for a further 2 years extension visa. Following the 5 years, you’ll have the option of applying for permanent residency in the UK.

Airport Advertising in India: An Entry Gate to the Indian Markets

Airport Advertising is a popular medium of launching new products and services and building the image of the brand in the Indian markets. The airports are a hub for affluent audiences and impressing them can be the big step in penetrating the markets in India. This is why the brands enthusiastically associate with Airport Advertising Agencies in India in order to reap the benefits are unique to this medium. This article analyzes the elements that have allowed the medium to rule the Outdoor Advertising in India since 1986.

Affluent Audience

A breakdown of airport audience segments done by Technopak Advisors (India) shows that 72% are the chief wage earners and 73% are frequent fliers (once in 3 months). Also, the affluent target group is inclined towards SEC A and 25+ yrs age group. 52% of the audience does not mind spending on expensive brands and 59% love to buy new gadgets and appliances and designer labels. Such figures are enough to bring a gleam to the eyes of every advertiser. Even those shrouded in skepticism are soon convinced when they see the high Returns of Investment (RoI). The fact that a high number of key decision makers of various organizations are available to be influenced is one vital advantage of Airport Advertising. Such a congregation cannot be found in any other medium. Alliance with a company already established in the market can increase the conveniences. Indian markets, specially have shown a demand for such alliances when new products and services are launched.

High Dwell Time

If you are imagining an audience looking at an Ad Site for durations as long as 55 minutes and 2 hours, you are thinking of an airport audience in India. Domestic flyers have a Dwell Time of 55 minutes and International flyers of 2 hours. Thus, an Airport Ad has ample time to have the planned impact and pass the message of the ad copy with a bang. The Dwell Times you are looking at are among the best in all the mediums of Advertising.

Guaranteed Views

If the consensus of the audience is to be taken, it is generally agreed that unless a viewer is associated with the field of advertising, he tries to avoid it in any form. Think about any common Indian household watching TV and remember the dexterity with which the mute or the channel swap button is pressed as soon as the ads start! In fact, in most of the mediums, there are very convenient escape routes and the regular audiences of the medium develop an expertise in mapping them in a remarkably short period of time. This is where the Airport Advertising brings in a breather for the advertisers and publishers. An airport audience is not allowed to go out of the premises (except of course at time of emergency) once they have checked in. They have no escape route in this medium as they have to wait for 55 minutes in case of a domestic flight and 2 hours for an international flight.

Uncluttered Environment

Among the many things an airport cannot afford is a cluttered environment. For the functions of an airport to run smoothly, an organized and uncluttered surrounding is of utmost importance. Airport Ad Displays thus enjoy a visibility whose impact is not minimized or neutralized by a zillion other things around it.

With the introduction of low fare airlines, the range of targetable segments has also increased in Airport Advertising in India. The medium is witnessing new brands that are joining the successful bandwagon of Airport Advertisers. Airports are the easiest places outside offices to find the ones with influence over the markets in India and advertising there is the means of extending the first greetings of your brand.