I received this story from my HR today. Though I am not sure how it related to the context in which it was sent, I just liked it, so sharing it here.

A man was walking along and fell into such a deep hole that he could not get out. So he began to shout very loud for help. A learned professor came along and found him. He looked down into the hole and began to scold him: "How could you be so careless as to fall down there? You should be more careful. If you ever get out again, watch your step." And with that he walked away. Then a holy man came along. He looked down into the hole and told the man, "I'll reach down as far as I can and you reach up as far as you can. If I can grab your hand, I'll pull you out." But it did not work: the hole was too deep. So the holy man said he was sorry, and left the trapped man to his fate. Then a villager came along. He saw the man's problem, and without asking him any questions, he jumped down into the hole. Then he let the man climb up onto his shoulders, and even onto his outstretched arms. And the man got out.
This is known as being personally involved.

We are all are very quick to judge other’s, how often do we actually guide someone to be better than who they were yesterday…

NIFTY - Analysis

In current market scenario, every trader, small or big, starter or experienced, expert or novice, is wondering where the market is headed. I follow Indian markets closely, and trade mostly on index, particularly NIFTY. I have done analysis on where NIFTY is expected to move. I will also share some technical part, which may not be of interest to you, and may go over your head as well. But, necessary to let you know that I have done some work :) and am not talking in air. But first the brief:

NIFTY is expected to consolidate for next 3-4 sessions, around 3150 levels and then start its downward journey to around 2000 level and bottom out. This level should be achieved by 27th April. From here on, I expect NIFTY to move upwards for its next BULL run which should last around 7 years. Watch out for 27th April.

Now my basis of this forecast (Technical analysis is based on the belief 'HISTROY REPEATS':

1. NIFTY Futures haven't CLOSED above 3160 since 22nd October 2008. It touched 3148 on 6th January 2009, made a Double Top and now it is reaching the same level (around 3140) which was on 27th March 2009. This means it is making a TRIPLE TOP here which is very strong resistance.

2. Time difference between 22 Oct-6 Jan is 76 days and between 7 Jan - 27 Mar is 79 days. Almost 11 weeks in both cases.

3. NIFTY made its last significant low on 27th Oct 2008. 180 degrees i.e. half/50% of the circle gets completed on 26th April. Since 26th is Sunday, I am banking on 27th April.

4. NIFTY has tested 2500 level 3 times in last 5 months but has been able to hold. If it tests it for the 4th time, it is very likely to break through this level.

Happy trading.

Eagerly waiting for 27th April.

Tough Times never last, tough people do!

Khudi ko kar buland itna, ki har tabeer se pehle,
khuda khud tujhse poochche, bata bande teri raja kya hai.
(Strengthen yourself so much that whenever God writes your future (fate), he asks you for your desires)

Year 2001, I was posted in Chennai, working as Manager with an IT company. I was looking after the financial matters of the company's Asia-pac business. We were just blessed with a baby boy and celebrating the arriaval of the new born. Everything seemed to be fine, rather great and we were sort of living the great Indian dream. Had a nice paying, 9-6 job. Used to generally reach home by 6.30 and have evening tea with my wife. And lots of time to spend with my 1 month old son.

One day, after returning from work, I was having my evening tea as usual. And the door bell rang. My neighbours son was in panic and asked me if I had watched 'the' news on TV. I had no idea what he was talking about. He rushed downstairs (as we were on first floor) to inform other neighbours in the building/street to switch on their TVs. Seemed as if he was entrusted with a very important job. God knows, whether by his father or by the almighty.

I hurried to switch on the TV and damn! The cable was not working. I called up my cable guy and he fixed the problem, remotely, though don't know how. I had always paid my cable bill on time !!

Once I switched to the news channel, we notice smoke, panic, people running around, US police. Yes, you guessed it right. It was 9/11. And it changed everything. At least for me and my family, temporarily.

We lost much of our business in the Asia-pac region, trying hard to retain customers and business. Hence, there was not much work for me to do. And after 2 months, the inevitable happened. I was called in by my boss and given 2 choices, either move to USA or part ways. Given that I would have to stay for about 6 months alone before my family could join in, it was a tough decision. Having only 3 months old baby, I could not leave my family dependent on my relatives. Hence, I made the choice, part ways. For about a month, I kept looking for jobs, business options, part time, full time, and what not. Being low on cash, I decided to return to Delhi in Dec 2001.

After coming back to Delhi, I started initially to look for a job and learnt that not only asking a higher salary, but even demanding a lower salary is a problem. I then landed with a job at about half the salary with a small company in tourism industry. Everything seemed bad or rather worst. Things were not going my way. And I sometimes, would regret my choice.

BUT, thank god, I was strong mentally and emotionally. I don't know who gave or where I got this book "Tough Times Never Last, Tough People do" around the same time. God may not give you what you want, but he gives you what you need. MUST READ.

Today, when I see in retrospect, I believe I made the right choice. In fact, eventually, no matter how many adversities you see, in future you only smile at your past!!

Does wealth change your lifestyle!!

On the new year, I went to Jailsamer, Rajsthan with family for leisure trip, rather for new year celeberations. It was a 6 nights trip, of which 2 were to be spent in train. We had great time over there and visited many places. I would write/share more about the trip later on, and just want to share one of the memories that I would carry for long in the photo given below. We went to Longowala (near Pakistan border) and on our way were introduced to a very interesting personality . You see the man in turban, with white moustaches. Make a guess at the networth or this person? Any idea on how much he earns!!

His networth is in tens of millions of Indian rupees and earnings probably in six figures. Surprised! Unbelievable. But true.

As told by one of his 'employees' i.e. his driver (the person you see with him in blue jeans), he owns acres of land, where his herd of goats/sheeps grazes and recently (about 2 years ago) he sold about half of the land that he owned and made a fortune. He utilized part of this money to deploy couple of tourist taxis. But his routine, lifestyle, dressing, nothing has changed. He still sleeps in the little hut on the land, gets up around 4/5 am, takes care of his cattle, and rests in peace.

I was amazed to know of this. And then said to myself, do you really need lots of money to be happy or just enough of it to take care of your basic needs?? Human desires never end and, hence, the race after money/wealth also never ends. Whoaa!! I believe happiness and peace are only a state of mind or a mind set!

More about the trip later.............

Risk Vs. Risky - Stock Trading

I have been trading in stock market for some time now and have gained some valuable lessons over last 3 and a half years. I had my share of success (and losses :( as well) and I believe I have done well. I may not have made lot of money, but I have learnt a lot. And I know, through this learning, in next 5 years I will be a billionaire. It's written.

It may be worth it to share some of my learning which may help you understand trading a little better. I am not advocating trading here or suggesting that everyone should start trading. My objective is only sharing and in this process, you may get some help.

‘Risk’ Vs. ‘Risky’: There is ‘Risk’ in trading but Trading is not ‘Risky’. You only need to identify and manage ‘Risk’. For example, there is a ‘Risk’ in driving, but we do not consider driving ‘Risky’ as we know driving and traffic rules well. However, even if we know traffic rules well and are an expert driver, but drive rash or don’t follow traffic rules, it becomes ‘Risky’. Similarly, there is ‘Risk’ in taking a flight but flying is not ‘Risky’. I have made an attempt to differentiate between ‘Risk’ and ‘Risky’ and I leave it to you to decide how successful I have been in this.

Some rules to trade safely:
- Put aside an amount of capital for trading. Never use it for any purpose unless it is “extremely important/emergency”. Repaying a loan, payment of a bill or taking a vacation is not an emergency.
- Do NOT use borrowed money for trading.
- Your trading capital should not be more than 10%-20% of your net worth. This ensures that you do not go bankrupt/broke even if you loose all your capital. It will not happen if you follow ALL the rules :)
- You should not risk more than 10% of your trading capital on one trade/share. For example, if you have net worth of Rs. 5 lakhs, keep aside only Rs. 50,000 for trading, maximum risk you can take is Rs. 5,000 on each trade. If the gap between your Entry price and Stop Loss price is Rs. 5 per share, DO NOT buy/take more than 1,000 shares (in this example). THIS RULE IS VERY IMPORTANT.
- ALWAYS FOLLOW YOUR STOP LOSSES.
- ALWAYS HAVE A PRE-DETERMINED EXIT POINT. It could be price (i.e. STOP LOSS or with a profit) or it could be amount of Profit, say 5k, 10k, 20k etc. Do not forget to consider the brokerage you pay for trading. Also, keep in mind the next rule when determining the profit amount.
- Your Reward to Risk ratio shall be at least 2:1. In above example, if you are risking Rs. 5,000 on a trade, your potential profit (i.e. difference between sell and buy price multiplied by number of shares) shall be at least Rs. 10,000. When I send you any trade picks, I take care of this aspect most of the time.
- Do NOT expect each trade to be profitable. Odds are that 5 out of 10 trades may not be profitable and end up in a loss, but you will still make money. The losing trades may be the first 5 or last 5. You never know. My experience is that 6 out of 10 trades that I pick, are profitable. And 2 out of 4 are neutral (no profit, no loss) provided you followed the STOP LOSS strategy.
- Continuing with the above example, if you lost first 5 trades straight (which may not happen), you will lose Rs. 25,000 but will cover the loss in next 2/3 trades PROVIDED that you follow the Reward to Risk ratio ‘religiously’.
- Think of trading as Roller-coaster ride. We all know that riding a Roller-coaster is Not ‘Risky’ as all the safety measures are in place. You feel excitement, anxiety, fear, it goes up and down, sometimes faster and sometimes slow. Compare with Stock Market. Now, just imagine, you did not fasten the seat belt, or the strap or didn’t lock the front bar/rod/door :) STOP LOSS/% ge of capital to risk/Reward to Risk ratio etc. are the safety measures of this Roller coaster ride.
- Once you have a profitable trade, start trade count from 1 for determining odds in your favor.
- Small profits, if preserved, will make you Rich. Consider this, if you make 10% every month on the capital available, and never took out a single rupee out of it, in 5 years, the amount will be 81 times of capital invested, after paying tax @ 34% on your profits every quarter. Guess what would happen if you make 15% every month, it will be 794 TIMES! And it is possible as well as Practical.

write to me at sumit@sumprati.com

"An Asset is something that PUTS money in YOUR pocket” and “a Liability is something which TAKES money from YOUR pocket"

Take Control

When it comes to our personal finances, the most common answer that I hear is “Finance, I don’t understand it.” And my heart aches when I hear these words.

Money, though not everything, remains one of the most important things in life. Think about it, food, clothing, fuel for your car, kids education fee, electricity and phone bills are bought by money. I challenge you to write down 10 issues that you are facing and I bet, 8 of those could be solved if you had more financial resources. Ironically, from our childhood we hear “money is not good”. And this is the precise reason that we don’t get or teach financial education in our school, college or even in most of the MBA programs. Yes, they do educate you how to manage finances or cut costs or make your organizations rich, but not YOU.

I sincerely believe that like any other skill or education, managing finance can also be learnt. We just need to have a mindset, some focus and ready to put in some efforts.

Few starters:
1. Take control of YOUR personal finance.
2. It’s YOUR money and YOU need to understand it.
3. Take advice and NOT decision.

Do you work for Money or it works for you??

Do you work for money or your money works for you? Confused. Well, it simply means that if your money is invested wisely and in the right instrument, it will work for YOU. Consider each single rupee invested by YOU as your “Loyal” employee. And guess what! It works for YOU 24 hours a day, 7 days a week, 52 weeks a year. It doesn’t ask for any holiday or leaves, doesn’t go on strike and if YOU take good care of it, it will take better care of YOU.

You may be working for 5, 10 or 15 years or may be a fresher. Have you ever thought after 10 or 15 years how many “Loyal” employees would you have working for you. Consider this, if you invested Rs. 2,000 every month in an average mutual fund for 15 years, YOU will have about Rs. 23 lakhs and if it is a good mutual fund, it could be Rs. 50 lakhs+. Surprised. It’s the power of compounding. How many of you who have been working for 15 years or more, and have that much saved. Think about it, seriously. And more importantly, ACT NOW!

Deciding.. finally

I was pondering over my post before this one and went 2 years down the memory lane. Day Tuesday, March 13, 2007. This was second day of the 2 days I had taken off from office due to low back pain and was at home. I am fond of reading and had just finished reading Monk Who Sold His Ferrari, one of my favourites. Being put to bed rest, nothing to do, recovering from back pain, I had very similar thoughts going on, how the life changed......

I had almost everything that one could desire for. Couple of good flats, a nice house in a posh locality with all facilities to live in, a very supportive and understanding wife, 2 lovely kids, a good job at senior level with good paycheck, a nice car and many other good things in life. But..., I didn't have the most important thing, TIME. Time for self, time for family, time for wife, time for kids and time for friends. I just lacked it. I found myself in the rat race, going in circles and reaching no where. Daily routine, get up around 8.00 am, kids are already off to school, get to office by 10 am, meetings after meetings, discussions after discussions, work, work and more work. By the time, I came back home, it would be past 9 pm everyday and sometimes past 11 pm. Kids would have gone to sleep, wife waiting at the dining table, to cook food for me as I can't eat chapatis that are in the casserole.

Where was I heading? What is that I wanted? Money, fame, name, position? Were these more important than my family and kids? could I see an end to all this?

And a decision was made. Money was important, job was important, but not at the cost of family. I could take that tough/difficult decision to quit the nice, cushy job and take a break for 4-5 months. I am happy that I took that decision. I spent next 4 months (April-August) with family, living and enjoying each moment and feeling rejuvenated. Looking for a job that would give me work-life balance.

Thank god, he gave me courage to take that decision.

sitting in my office @ night.....

Here I am sitting in my office @ night...
Thinking hard about life
How it changed from a maverick collage life to strict professional life......

How tiny pocket money changed to huge monthly paychecks
but then why it gives lesss happiness....

How a few local denim jeans changed to new branded wardrobe
but then why there are less people to use them

How a single plate of samosa changed to a full Pizza or burger
But then why there is less hunger.....

Here i am sitting in my office @ night...
Thinking hard about life
How it changed.....

How a bike always in reserve changed to bike always on
but then why there are less places to go on......

How a small coffee shop changed to cafe coffee day
but then why its feels like shop is far away.....

How a limited prepaid card changed to postpaid package
but then why there are less calls & more messages......

Here i am sitting in my office @ night...
Thinking hard about life
How it changed.....

How a general class journey changed to Flight journey
But then why there are less vacations for enjoyment....

How a old assembled desktop changed to new branded laptop
but then why there is less time to put it on..........

How a small bunch of friends changed to office mate
but then why after 8'o Clock it always feel like getting late....

Here i am sitting in my office @ night...
Thinking hard about life
How it changed..... how it changed.......

Zindagi (Life)

Zindagi tujhe itne kareeb se dekha hamne, ke tujh se muhabbat kar baithe,
Thoda aur jo kareeb gaye, tujh se nafrat kar baithe,
Kehte hai shayar log, zindagi char din ki hai,
Nadaan hai jo tujhse rooth kar baithe.

Just Enjoy

There is a scene in the movie Bluffmaster which perfectly reflects on life.

Roy (Abhishek Bachchan) has just been told by the doc (Bomman Irani) that he has 90 days to live. He walks out of the clinic and the doc follows him. Doc narrates to Roy that he felt very happy when his daughter was born, he held her in his arms, when she learnt to ride a bicycle and few other happiest days of his life. Roy just shrugs it off as an irritant. Then the doc asks "Roy, how many such days do you remember in your life. 5, 10, 20, 30 days. How old are you? 30 years?" And then comes the message, "you remember only 30 days in 30 years of your life. And you still have 90 days to live, means 3 more lives of 30 years!!!"

Yeh naa soch zindagi mein kitne pal hai, yeh dekh ek pal mein kitni zindagi hai!

Life!!

Life is not an ipod on which you select and listen only to your favorites, but like a radio on which you have to take all, whether you like the song or not and wait for your favorite one.