Finance Ideas 2012

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Finance Ideas Improve your Financial IQ

Last updated on : 15 Dec 2012
The books mentioned in this document are available at the following location:
Legal Disclaimer :
There is a risk of loss of capital in investing in the stock markets - cash , futures ,
commodities and currency - please don't risk the capital that you are not prepared to
lose
Some trades may not be profitable - the author cannot be held responsible for these.
Learn to
1) Manage your emotions
2) Manage your money and loss per trade
3) Take regular profits
and you can make money in the stock market.
Copyright Disclaimer :
The cartoons , images are NOT original and have been sourced from the internet
There are other countries besides India and USA but I have just been to these two , so my
knowledge is limited to these countries only
For other countries , you can pick up any magazine on the local newspaper stand about
finance and get to know more information..
(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved
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Table of Contents
You could have 1 crore by using Indian Banks accounts by retirement - just use Recurring
deposit every month ............................................................................................... 4
Double your money - rule of 72 and quadruple your money - rule of 144 ......................... 5
The real cost of that cool Iphone that you are planning to buy........................................ 6
Making money out of thin air - the telecom provider : IDEA - Rs 200 refundable deposit for
six months! ........................................................................................................... 7
Making money in the stock market ............................................................................ 8
Do you know where your money is going? Links to Expenses Tracking Software and
Budgeting Software ................................................................................................ 9
Would you buy an investment that is guaranteed to lose almost 50 % of it's value in the
next 3 years - NO ? Then why are you buying a NEW Car ?......................................... 11
How to reduce your home and car loans EMI Improve your credit score ( EMI Easy
Monthly Installments )........................................................................................... 15
Are you sure you will not die before a certain age ? No The importance of having adequate
life insurance ....................................................................................................... 16
Going abroad ? Do these to fit into that culture . . . .................................................... 18
Money Saving Tips Groceries, Movies, Travel , Petrol , Diesel , etc.............................. 20
Free Expense Managers , How to make money using other peoples money (Leverage) ,
Making money when the stock market is going down .................................................. 24
Give a person a fish and you feed him for a day , Teach a person how to fish , and you feed
them for life . Catch your own fish in the stock market................................................ 32
Reading technical stock charts learn to read what the stock market is telling you - Part
One.................................................................................................................... 46
Reading technical stock charts learn to read what the stock market is telling you - Part
Two.................................................................................................................... 52
Charting Tools and Online Brokerages in the US......................................................... 59
Earn 15 % per year from Fixed deposits Tax savings mode no risk of loss of principal 68
Do you know who is eating your lunch ? How do you improve revenues and find new
markets .............................................................................................................. 75
www.ZeccoTrading.com a preview ........................................................................ 77
Limited Risk Unlimited Profits Options Calls and Puts .......................................... 85
How to calculate the premium for a Call or a Put ........................................................ 92
How to shortlist stocks ( for free ) around the world based on Oversold , Overbought and
other Technical Indicators www.finviz.com ............................................................. 96
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Everything you wanted to know about H1b visa and green card processing via employment
for USA , but were afraid to ask .............................................................................106
What caused the 2008 recession ? The Subprime crisis and how it was created by big banks
like Goldman Sachs and others . . . ........................................................................107
QE3 arrives , gold and silver shoot up , likely to go up a lot more , Mutual Funds India and
USA ..................................................................................................................108
How stock prices move they dont move straight up or straight down due to profit
booking and loss prevention the Fibonacci retraction ...............................................117
Sprint makes a flag up a stake sale to Japans Softbank is rumoured to be the reason. .123
How to save taxes on the gains of a home in India . ..................................................129
Getting married ? Please make sure that you know the financial habits of your partner ...131
Places to see while in the US Part 1 - Chicago ........................................................132
Stop and Smell the roses Places to visit in the US part 2 New York.......................141
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You could have 1 crore by using Indian Banks accounts by retirement

- just use Recurring deposit every month
A lot of new joinees are freshers or say 3 - 5 years of experience

Using the Future Value function in excel and the good rates offered by banks for recurring
deposits, the following can be shown :
eg 13,200 per month into a recurring deposit into an Indian bank account with no loss of
principal for 20 years at 10 % per year could get you 1 crore at the end of 20 years
It is important to stick to Big , safe banks like ICICI , HDFC , SBI , etc
Excel : Future Value function
10 % per year interest
240 months - 12 years
11,000 per month
Plug this into an excel file :
=FV(10/12/100,240,11000)*-1 = 83 lakhs
=FV(10/12/100,240,13200)*-1 = 1 crore
If a person starts at age 30 , till retirement , they will have :
8000 per month at 10 % per year for 340 months ( approx 28 years of investment )
=FV(10/12/100,340,8000)*-1 - approx 1.3 crores
If a person starts at age 22 , till retirement , they will have :
4000 per month at 10 % per year for 430 months
=FV(10/12/100,432,4000)*-1 = 1.6 crores
You could tweak the percentages , durations in months and the amount per month
Most banks can automate this stuff - to take the money on salary day and transfer it to that
account.
Well of course there are tax issues for interest amount ( use the form 15 G) and inflation
( which will reduce the buying power of 1 crore after 20 or 30 years , but still it is 1 crore )
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Double your money - rule of 72 and quadruple your money - rule of

144
Rule of 72 states :
The starting principal will be doubled in 72 / < interest rate per year >
So , if you are starting with 1 lakhs rupees , and a rate of 10 % compounded , you will double
your money in 7.2 years
----------------------Rule of 144 states :
The starting principal will be quadrupled ( four times ) in 144 / < interest rate per year >
So , if you are starting with 1 lakhs rupees , and a rate of 10 % compounded , you will
quadruple ( 4 times ) your money in 14.4 years
No additional money needs to be added and NO interest should be removed - in
other words , the money should NOT be disturbed
Assuming an
interest rate of
10 % per year
compounded
The money is NOT to be

disturbed
Rule of 72
Doubled your money
Rule of 144
Quadrupled your money
Year
Amount
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
100,000
110,000
121,000
133,100
146,410
161,051
177,156
194,871.71
214,358.88
235,794.77
259,374.25
285,311.67
313,842.84
345,227.12
379,749.83
417,724.82
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The real cost of that cool Iphone that you are planning to buy
An average phone lasts 5 years ( if you don't lose it or it does not stop working or not
destroyed by water )
Let's say you get an Iphone for Rs 35,000
Investing 35,000 over 5 years @ 10 % per year is 56,368
Compound interest
Principal * ( 1 + rate in % / 100 ) ^ ( no of years )
= 35000 * ( 1.1 ) ^ 5
So , you are getting an interest of 21,368 Rs
By buying that Iphone , you will lose Rs 21,368
So , the real cost is : Rs 56,368 , not the sticker price of Rs 35,000!!
It pays to delay the gratification. This is called LOST opportunity.
If you receive it as a Gift , well , good for you!!!
Where to find cheap(er) mobile phones
1) www.flipkart.com
2) www.infibeam.com
3) shopping.rediff.com
4) shopping.indiatimes.com
5) comparison shopping : naaptol.com ( India) ,
www.bizrate.com , www.dealtime.com ( USA )
Footnote :
People know the cost of everything and the value of nothing - Billionaire Investor - Warren
Buffet
Which one would you buy ?
Rs 40 for a cell phone charger - that has no guarantee
or
Rs 100 for a cell phone charger that has a six months guarantee
If you chose Rs 100 , you know the value of something , Rs 40 - you need to rethink what you
are paying for . If it stops working two days from today - you lost Rs 40
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Making money out of thin air - the telecom provider : IDEA - Rs 200
refundable deposit for six months!
Some time ago, Aditya Birla group's IDEA telecom company launched a scheme where you
could get a slightly lower calling rate if you deposited Rs 200 with the company for six months
This amount would be refunded after six months.
If you get 1 million customers with this plan , you get 200 million rupees to play with for 6
months. That is a lot of money to play in the stock market!!
1 million is 10 lakh
Even if you don't play the market , you can put it down for 5 - 7 % for six months in a fixed
deposit - that is 0.05 x 200 x 10,00000 = 1 crore - with zero effort in six months
Talk about making money out of thin air !
Net rate of return : Infinity ( because you did not spend any money from your pocket to earn
this )
It is also an interest FREE loan - the person who thought it is A VERY Smart person - a small
amount that you won't miss at all . . .
This concept is called LEVERAGE.
All I can say is : What an idea, Sirji!! ( this line is used a lot in their ads )
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Making money in the stock market
Here is the link to some books for technical analysis - it is a tool for making money in the
stock market
https://skydrive.live.com/?cid=5ac802c579a1d85e&resid=5AC802C579A1D85E!121&id=5AC8
02C579A1D85E%21121
To start trading in the indian stock market , you will need an online brokerage
Some of the good ones are
1) www.sharekhan.com ( Trade Tiger is the free charting tool )
2) www.icicidirect.com
3) kotak mahindra
I think sharekhan has the lowest brokerage of all in cash , derivatives as well as commodities
( gold , silver , crude oil , etc) segment
Preferred Order of reading

1)
2)
3)
4)
Technical Analysis for Dummies

Technical Analysis Course Notes
Trading for a living Alexander Elder
Trading in the zone Mark Douglas
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Do you know where your money is going? Links to Expenses

Tracking Software and Budgeting Software
Most households dont know on what items / things is the money spent.
They just know that by the middle of the month, they have to use the
Credit card for groceries
We have two software links today to track and budget the money coming in
Intuit Money Manager
You can track your credit cards , bank accounts , cash expenses , etc down to the last paisa
It is a read only access to all the major credit cards and banks
In case you are wondering if it is safe or not, it is I have been using it since Aug 2011
(was using Excel before that )
It can be accessed from : www.moneycontrol.com

Click on the top right corner : Intuit Money Manager
It has a 30 day trial no money to be paid during this
After that , it is about 1 Re per day plus service tax ( approx Rs 400 430 per year )
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Budgeting Software
Be the boss of money , dont let money be the boss
Decide when your money comes in , what will it be allocated to
Eg Rent , Home Loan , Car Loan EMI , Furniture purchases, Credit card reduction , etc
Create an emergency fund ( six months of living expenses Rent plus groceries , food ,
entertainment , etc )
Link : www.youneedabudget.com
Free access for 34 days , then USD 60 for life
(I used it for 34 days free, considering going for paid one)
You can import the transactions from most Indian banks ( Comma Separated Values format )
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Would you buy an investment that is guaranteed to lose almost 50 %

of it's value in the next 3 years - NO ? Then why are you buying a
NEW Car ?
Last week , we talked about some tools for tracking your expenses , here is another one :
Another expenses tracking tool : This is FREE : www.mint.com ( currently in US and Canada ,
India and other countries to be available soon ) Click the Sign up button on the top right corner
Used cars v/s New cars

A new car is not an investment - it's value ALWAYS goes down with time , unless REAL
ESTATE , which goes UP most of the time ( recessions , corrections - it does come down)
To find used cars in India , try the following link :
http://www.carwale.com/used/search.aspx#city=1&hptrkucs=1&dist=200&year=1&year=3&y
ear=2&tm=1&make=7&model=7.205&sc=2&so=0
There are many others as well ( quikr , craigslist , etc)
This car new ( Honda Accord in the year 2004 ) cost : Rs 16 lakhs plus road tax , etc . If you
finance it , those charges will also add up to the total cost.
Today it is 3 - 4 lakhs ( approx ) , plus you don't pay the road tax
A loss of 13 lakhs in 8 years ( that is 1.63 lakhs per year ) , approx a loss of 10 - 12 % per
year .
It is a different matter altogether that 16 lakhs would buy almost a brand new mercedes C
Class in the US ( It is a left hand drive - steering wheel is on the left side of the car )
Here is an interesting question : For the price we buy a Honda Accord in India , you could buy
a Mercedes C class in the USA - who has a higher standard of living - India or USA ?
Click the following link :
http://www.cars.com/forsale/searchresults.action?stkTyp=U&tracktype=usedcc&mkId=20028&AmbMkId=20028&Amb
MkNm=Mercedes-Benz&make=Mercedes-Benz&AmbMdNm=C-Class&model=CClass&mdId=20745&AmbMdId=20745&prMx=30000&rd=30&zc=77070&searchSource=QUICK
_FORM&enableSeo=1
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Automatic Transmission v/s Manual Transmission

Process of Driving a Manual Transmission ( with Gears ) car
---------------------------------------------------------Start Car
Press Clutch
Change to First Gear
Release Clutch
Accelerate slowly
Reach 30 kmph
Press Clutch
Change to Second Gear
Release Clutch
Accelerate slowly
Reach 60 kmph
Press Clutch
Change to Third Gear
Release Clutch
Accelerate slowly
Automatic
Start Car
Press brake , put car into Drive (D)
Accelerate slowly
That is it - no more gear changing
Find an obstacle ? Need to reduce speed ? Press the brake - gears changed automatically
If you are in traffic - manual gear changing can make you tired . . .
With an automatic gear car - your left hand and left foot are free ( you just use the right foot
for accelerator and brake ) - you can actually ENJOY your drive . . .
How safe are you in your car in case of a crash or a serious accident
www.iihs.org
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New Books Available :

---------------------------1) Getting things done - The Art of Stress Free Productivity ( when you have multiple things
seeking your attention , how to find time and prioritise things )
2) The Total Money Makeover - Dave Ramsey - This requires Adobe Digital editions , which
can be downloaded from :
http://www.adobe.com/products/digitaleditions/
How to have a free five star meal for two , courtesy your bank
Most banks have debit cards which give you points on purchases ( e.g. groceries , petrol ,
clothes , etc) .Accumulate these points over a period of time and you can redeeem them for a
lot of things , including Five star hotel meals and stays
- Enquire with your bank
If you fancy a 17 inch screen laptop ( not available in India yet , but is in the USA ) ,
you can try here :
www.walmart.com
www.circuitcity.com
www.bestbuy.com
All you need is a friend or colleague in the US , who can receive it for you and then ship to
India .Most of them don't ship outside US
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Okay , life does not have to be all boring , it can be fun too : Here are some funny
and creative ads about PC v/s Apple Mac :
Link : http://www.youtube.com/watch?v=bagTVgeZxlY&feature=related
New Folder : Songs

-------------------------If you like pipe music ( similar to the files on the drive in the Songs folder ) , you can use
Itunes Radio - all you need is an internet connection with at least 128 Kbps speed
( which is any fast connection today)
It is ideal for a work environment - also makes a stressful day a little easier to handle . . .
Instrumental songs - Melodious music with no words - a combination of one or more : Guitar
, Piano , Drums , Saxophone
Disclaimer : Some people outright HATE this type of music - some even say it puts them to
sleep . . No offence meant , none taken :-)
www.apple.com/itunes - free download
Install it
Tune to Radio - under the Jazz section - Navigate to any Smooth Jazz channel
Other channels - Rock , Easy Listening , Oldies , Contemporary , Dance hits , etc - a lot of
variety of Worldwide Radio stations - from US, UK , Germany , etc
The secret of success is hard work . Now anyone can be successful.
- Oprah Winfrey
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How to reduce your home and car loans EMI Improve your credit
score ( EMI Easy Monthly Installments )
Whenever you apply for a loan , have you ever wondered why your loan is denied
or approved ?
The answer is : Your credit score
In India , CIBIL ( www.cibil.com ) is an agency that tracks your credit usage. All banks which
issue credit cards report to this institution .
Your credit score is a number between 300 and 900 ( the higher the better )
The score , also known as the FICO score ( Fair Issac Corporation) is a score that is derived
from a lot of factors
1) Do you pay your bills on time ?
2) How much credit have you used ?
3) How long has your credit line been open ?
It is in your best interest to make sure that all information is accurate and your score is as
high as possible this will give you approval for loans and a good interest rate
( the lower the interest rate , the more money you save on your EMI )
You can see what is in your credit report by purchasing a copy from CIBIL in India
If you are in the USA , there are three companies that track your credit
1) Equifax
2) Transunion
3) Experion
In the USA , you can get a free copy of your credit report every year ( just google it )
For more information , download and read the two files from CIBIL :
Folder :
https://skydrive.live.com/?sc=documents&cid=5ac802c579a1d85e#cid=5AC802C579A1D85E
&id=5AC802C579A1D85E%21121&sc=documents
Files :
1) Understanding_credit_score.pdf
2) Understanding_credit_report.pdf
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Are you sure you will not die before a certain age ? No The
importance of having adequate life insurance
God did not give us a date for death - so , we can die at any time
What will happen to your dependents in case of your untimely death ?
How do you cover this risk ? . Well , there is life insurance
These days there are many types
1) Term Life Insurance
2) Money back policy Insurance
3) Investment type insurance
and some really cleverly marketed insurance products
By far , the cheapest one is the Term Life Insurance
and most Financial Planners don't like looking Life Insurance as an "INVESTMENT"
Some policies have the marketing mantra :
----------------------------------------------------If you don't die within that period, you will get x amount at the end of 40 years .
Ok , but how much will that amount be worth so far into the future - The buying power of
money reduces over the years due to INFLATION
To find policies that suit your requirements , go to www.policybazaar.com , there are some
other websites as well ( please google life insurance websites )
www.apnapaisa.com is another site that you can use
What should be the amount covered ?

------------------------------------------------Answer : the highest you can afford
The max amount is 20 times your yearly salary
so , if your salary is 10 lakhs per year , the max you could go for is 2 crores
A simpler way of calculation
-----------------------------------What are your outstanding loans - ( eg Home , car , student , etc ) - add them up (a)
Add the cost of your children's education , living expenses , marriage , etc - (b)
The total amount insured must be : AT LEAST the sum of (a) and (b)
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Health Insurance
What if you are in an accident and the employer's policy does not cover the expenses ?
This risk could take away all your life savings . . .
or god forbid , you get disabled . . .
Again , www.policybazaar.com would give you health insurance quotes from various
vendors .It might be wise to add DISABILITY and CRITICAL illness component
www.apnapaisa.com is another site that you can use
You can choose the amount that you are comfortable with ( eg 2 , 3 , 5 lakhs )
Quote : Welcome to the modern age, here we have guided missiles and misguided people
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Going abroad ? Do these to fit into that culture . . .

Things Indians need to improve around the world - when abroad , follow these . . . to make a
good impression
1) don't blow ur nose in public
2) wear a deodorant - not too strong though
3) have some breath mints with you - your breath will smell bad from time to time - better
brush if you can , have breath mints otherwise
4) tip generously - 10 to 15 % of the total cost of your food is considered a good tip - some
restaurants include the tip in the cost , others don't , if you don't tip well , you will not get a
good service the next time . this includes cab drivers , waiters at restaurants , bus and train
porters ( coolies ) , etc
5) use thank you and sorry generously
6) when moving out of a door , hold the door for the next person, if they are not very far from
you . If someone is holding the door for you , take the door ,
smile and say thank you
7) if you are driving and need to change lanes and someone lets you in front of them , smile ,
take out your hand and hold it up - this is a gesture for THANK YOU . Alternatively , allow
people to change lanes in front of you allow some extra travelling time
8) don't stare - looking at someone for longer than 10 seconds is considered a stare and is
considered rude
9) don't ask and share personal information - eg Age , Marital status , Salary - is considered
personal in almost all countries
10) don't burp in public - it is not considered polite - please say EXCUSE me , if you do
11) please say EXCUSE me after you sneeze or cough and cover your mouth and nose with a
napkin or handkerchief
12) please maintain a distance of an arm's length from the next person - Don't invade their
personal space - India has a lot of people , hence , we get very close to the next person
Abroad , people have and maintain their personal space
13) Don't pick your teeth in public , excuse yourself , pick up a toothpick and go to the
washroom with a mirror and do it
14) Don't pick your nose in public .
15) Talk slowly - we in India speak too many words per minute - your brain will also have
more time to think :-)
16) Be on time for meetings - the standard "Indian Standard Time" joke is that Indians are
always 15 minutes late for all meetings
17) Develop a sense of humour - learn to laugh on your self - Indians are perceived to be too
sensitive - take life lightly - they say Laugher is the best medicine
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Joke : Oldest profession in the world

A software professional , a lawyer and a carpenter were debating about their profession being
the oldest in the world
Lawyer : Before there was anything , there were agreements , well , we draft agreements therefore law is the oldest profession in the world
Carpenter : There was wood before anything else - we created all the furniture - beds , sofas ,
etc - Carpentry is the oldest profession in the world
Software professional : Before there was anything , there was CHAOS - who do you think
created the CHAOS - us , software people !!
The following ad was taken from a USA finance website : finance.yahoo.com
Page 20 of 152
Money Saving Tips Groceries, Movies, Travel , Petrol , Diesel , etc

Why should you save money ? Because then you can invest it and create a nice money
cushion for yourself.
Please read the following FREE preview from the book : Robert Allen Multiple Streams of
Income just copy and paste it in a browser
http://www.amazon.com/Multiple-Streams-Income-GenerateUnlimited/dp/0471714550/ref=sr_1_1?ie=UTF8&qid=1338690419&sr=8-1
Click the Look Inside picture to see the power of compounding
Share songs and DVDs among friends create a common shared drive and upload your songs
there and you can then download songs when needed
Some of the free cloud storage services
www.dropbox.com
www.amazon.com
Most email providers today also provide a shared drive to keep your files.
E.g. hotmail provides you with 7 GB of space in a SKY drive
Groceries
All the stuff at eye level is costly Go above and below the eye level you have to work a
little hard to find the savings
If you want the fresher stock ( a later expiry date ) of milks , curd , eggs , etc look at the
back of all the items on the shelf the ones at the front generally have an earlier expiry date
- The grocery shops are counting on you to be lazy!!
Group all your purchases and save on the trips If you are shopping with friends , divide the
items into groups and branch out at various stores - compare the prices on cell phones and
the store with the cheapest price gets the business. . .
There are some smart applications today which can tell you the price of the same item in
various stores ( this has caught up in the USA , it might come to India soon , India being a
price sensitive market )
Movies
If you enjoy going to the movies, catch an early morning show they are upto 50- 70 %
cheaper www.bookmyshow.com , www.burrp.com , etc allow you to book in advance
If you are a group of friends want to hang out and watch a movie , the new movies generally
come on DVD within 6 months of release or on TV - sometimes also available on Pay Per View
channels for less than Rs 100 and you can watch them all day there is no cost per ticket
Popcorn and Soda at home are much cheaper than the concession stands at the movies
(Rs 100 for popcorn wonder who give it the name CONCESSION ?)
Lets say four friends go to a movie pay Rs 250 for the ticket and Rs 150 for popcorn and
soda That is Rs 400 per person Total Rs 1600
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Stay at home and watch a movie Popcorn Act II Rs 10 x 4 Rs 40 pop into a

microwave Rs 30 for a litre of soda - Rs 70 plus Rs 100 ( max ) for the pay per view movie
Rs 170
Savings : Rs 1600 Rs 170 = Rs 1430
Even if you watch one movie per month , that is a saving of approx . Rs 17,000 per year
You can even rent DVDs from www.bigflix.com
Travel Time, Petrol, Diesel

If you rent, try getting a place closer to the work it will save you commuting time as well
petrol or diesel , If you can walk to work , GREAT you will save money on Petrol and also get
some exercise . Also , if you dont spend time with the BETTER half , they will become the
BITTER half
If you cannot move closer to work , try taking the public transport or the company
transportation if possible . Ask your manager to give you the facility to work from home .
If your car runs on petrol , you can get it converted to CNG it will improve your mileage and
reduce the cost per km as well
Petrol costs Rs 68 70 per litre, CNG is around Rs 38 40 and the mileage on CNG is about
1.2 1.5 times that on petrol ( based on some people I talked to - not tested this but am
seriously thinking about it ) .
The cost of CNG conversion is anywhere between Rs 25,000 to 32,000 depending on the kit
used , type of car and the capacity of the CNG cylinder
Lets say your car gives 14 kms per litre of petrol ( cost : Rs 70 per litre ) . With petrol , your
driving cost is Rs 5 per km . If you drive 18,000 kms per year , that is about Rs 90,000
With CNG , the mileage is 1.2 to 1.5 times that of petrol , so , say 20 kms per litre of CNG (
cost : Rs 40 per litre) , your driving cost is Rs 2 per km. If you drive 18,000 kms per year ,
that is Rs 36,000 , a saving of Rs 54,000 per year from petrol.
If your car lasts for 10 years , that is a saving of Rs 5.4 lakhs ( assuming the cost of petrol
and cng dont change) you have to remove the cost of CNG kit ( Rs 35,000 max)
There is a separate queue for cars on CNG stations you dont have to wait with autos
Where to find the CNG conversion garages ?
1) Lookup your local newspaper classified ads
2) Ask any auto person who has converted it can also ask the mileage they receive on
CNG
If you drive, you can save on the fuel costs by
1)
2)
3)
4)
not speeding ( accelerating) and braking suddenly ,

turning off the engine at signals if the wait is more than 45 seconds ,
keeping the speed upto 75 80 kmph on highways
keep your engine tuned service it regularly four to six months
Page 22 of 152
5) keeping your tires inflated at the proper pressure

6) not to have junk in the back of the car or on the bike / scooter the extra weight
consumes fuel too
7) combine trips to finish tasks together
Deal websites
Sometimes you can get a good meal for two
or a hair care package or
a spa package at a discount
Some sites
1) www.snapdeal.com
2) www.crazeal.com
3) www.fashionandyou.com
Just make sure you dont sign up for a deal to come to your Email everyday - because that
can really tempt you .
Books and Music , now some household appliances as well
First search if there is a free copy available on the net google , etc . If not , then
India
www.flipkart.com
www.infibeam.com
books.Rediff.com
USA
www.amazon.com
www.bn.com
www.borders.com
They have a preview section where you can read the contents and the first few pages
Saving on cooking fuel ( LPG )

As you might be aware that there are more efficient cooking appliances available
Induction Cookers and Hot Plates
They both work on electricity and induction cookers are almost three to four times faster in
cooking food than LPG
If LPG is already in use in your household , you can make it the secondary cooking medium
Hot Plates (2 plates on one stove ) are available at Croma for Rs 2500 or so and Induction
Cookers ( Rs 990 at SPAR ) you can purchase additional warranty for no headaches
Besides , you will be aware that LPG is heavily subsidized by the government, so by switching
away from LPG , you are also reducing Indias fiscal deficit.
Page 23 of 152
How much would you lose if someone stole your wallet / purse ?
I have seen people carry all their credit cards , debit cards and a lot of cash in their wallets
Risk : What if someone stole your wallet ?
You will lose it all
Minimize the risk Carry a debit card and max 800 1000 Rs of cash there are ATMs
available everywhere plus for large amounts , you can swipe the debit card
Also , as a safety measure , take a copy of the front and back of all your credit and debit cards
and have the customer helpline number ready in case of a lost or stolen card.
If you have lost your driving license, please visit the local Regional Transport Office ( RTO ) for
a duplicate driving license process . You might need a notarized document stating that you
have lost your license
For a lost PAN Card, you can make an online application at the following link
https://tin.tin.nsdl.com/pan/index.html
Last week, we talked about changing some habits slightly when going abroad, well here is
some more help .
1) etiquette.ppt
2) professional etiquette.ppt
New books added:
I will teach you to be rich Ramit Sethi
The Talent Code greatness isnt born its grown
If you want to feel rich , count the things that money cannot buy
The beautiful sunrise , the pleasant breeze , the smile on your childs face all this cannot be
purchased with money.
Page 24 of 152
Free Expense Managers , How to make money using other peoples

money (Leverage) , Making money when the stock market is going
down
Free Expense Managers

1) www.budgetpulse.com
2) https://money.strands.com/
They are both free and support the Indian currency but you will have to import your bank
records most online banking for banks in india provide a Comma Separated Value data and
that can be imported here
Which skill pays better your current one or something else ?

www.glassdoor.com
www.salary.com
Remember the longer you stay with a company , the more loyal you are considered and guess
when a senior position opens up , who gets that job ? Yes, it is the person who has been with
that company for a longer duration. Okay , there might be exceptional candidates that are
brought in to kick start something new but these are the exceptions
Companies spend a lot of money on training and retaining people and if you change jobs often
, it does not look very professional
Need more money ? Start showing your boss that you are worth it Find ways to improve
something , contributing your bit beyond the routine , thinking outside the box and make sure
the boss knows about it TOOT YOUR HORN speak up after contributing
By all means , take interviews and find out what is your net worth outside the current job. .
How to make money using other peoples money
When you take a loan for buying a home , you put down a certain amount from your pocket (
20 % currently as of June 2012 )
If your down payment was 5 lakhs , the home value is , say 30 lakhs , and after 2 years ,
suppose your home has increased in value by 10 lakhs , your home is now worth 40 lakhs ( a
return of 33 % ( 10 lakhs / 30 lakhs * 100) , but your return is 200 % (10 lakhs / 5 lakhs *
100 - since you used only 5 lakhs of your own money , the bank supplied the remaining
amount )
This is called leverage , or leveraging your returns using Other Peoples Money ( OPM )
This is a two edged sword if your home depreciates by 5 lakhs , you have lost 100 % !! So ,
be careful of the price you pay for a home dont buy a home at the peak of the market buy
it during a recession or a downturn
Worried about how to make money when the stock market is going down ?
Page 25 of 152
It is called SHORTING the process is that you SELL the stock first ( at a higher price ) and
the buy it at a lower price
Same as buy low and sell high except you do it in reverse
More about this later
You can make money when the market is going up ( LONG - Buy low and then SELL High)
Or
When the market is going down ( SHORT Sell High and then BUY low )
In the cash segment in India when you SHORT , say 10 nos of , say INFOSYS , you have to
buy them back by the end of the same day
In the cash segment in USA , you can keep the short position open for many days at a time
To go short in India for a long time ( more than 1 day ) , you have to go for FUTURES ( we will
discuss that later)
When the markets are going down , mutual funds dont give good returns because
they are not allowed to short but you as an individual dont have that rule you
can short if you want to
Here are some useful websites that you can use to see what the worlds stock markets are
doing
1)
2)
3)
4)
www.cnbc.com
http://www.bloomberg.com
Finance.google.com
www.moneycontrol.com Stock Markets India
Page 26 of 152
For commodities in India ,

http://m.moneycontrol.com/rates.php?type=comm
For currency prices ,
http://m.moneycontrol.com/rates.php?type=curr
Gold and Silver prices worldwide

Gold :
http://www.kitco.com/charts/livegold.html
Silver
http://www.kitco.com/charts/livesilver.html
The potential for making money in the commodities market

The link : http://m.moneycontrol.com/rates.php?type=comm
This is the screenshot from June 4 Crude Oil Futures a very highly traded commodity
around the world is down 46 points, means if you had shorted it in the morning , you would
have made Rs 4600 at this point
The amount of money required to trade CRUDE OIL 1 lot is around Rs 26,000
4600 / 26,000 = approx 17.7% in a single day!!
Crude is the most liquid contract everyday worldwide almost 200 BILLION US dollars is
traded!!
Page 27 of 152
Currencies
Link : http://m.moneycontrol.com/rates.php?type=curr
What you see if that INR depreciated by 12 paise on June 4

If you had placed your trade in the correct direction, you would have made
120 Rs ( in currency market , this is called 12 pips , each pip in Indian contracts (NSE) is
worth 10 INR )
The margin required here is about 1200 Rs
120 / 1200 = 10 % in one day Greedy yet ??
Over the next few sessions , we will be covering how to find out the direction of the market
and make money . . .
The main thing to remember is : LET your winners ride and CUT your losing trades fast.
And dont risk too much money on one trade ( we will define TOO MUCH in later sessions)
Yes , there is a risk but with the right education and good control of emotions , you can reduce
this risk to a good reward in your favour .
Experts say making money in the stock market is all about
1) Psychology - 45 %
2) Money Management 45 %
3) Trading Skills when to short , when to long and when to stay out 10 %
You dont have to be an MBA in finance to make money in the stock market
I dont even have a basic finance degree I have an engineering background
You could be sitting on a beach and still make money you can be travelling and still
trade This can set you free . All you would need is a laptop and an internet
connection of course a trading account and some money to get started . . .
Start allocating a small percentage of your salary every month for about 6 10 months and
learn to trade on paper ( shortlist commodities / stocks / futures you want to buy or sell and
write the price in an excel file entry date , margin used ( money needed ) , buy or sell , price
and exit date and exit price then calculate your profit or loss margins )
Page 28 of 152
Exchanges equity and derivatives ( derived from equities )

BSE ( www.bseindia.com) , NSE ( www.nseindia.com )
Commodities :
MCX (www.mcxindia.com ),
NCDEX (www.ncdex.com )
Timings of operation :
Cash and Derivatives ( Futures and Options )Segment : Indian Market 9:15 am to 3:30 pm
Currencies ( 9:00 am to 6:00 pm)
Commodities :
10 am to 11:30 pm ( during eastern daylight time in US)
10 am to 11:55 pm ( during non daylight time in US)
Where to find the current margins :
http://www.fairwealth.in/Static/Download.aspx
Click on the download icon for MCX Margins , FO Margins , Currency Margin , NCDEX Margin
Download the excel files on your computer .These margins change almost daily.
The first column is the share name or the commodity item , then there is the expiry this
means that you have to close the position before that date generally the most liquid is the
nearest date ( eg if today is 7 june , the nearest one will be the June contract ) , the next is
LTP ( last traded price) , lot size ( eg crude oil is 100 so each point movement will be Rs
100 ) and the last value is the margin required ( this is the money needed to trade this lot in
your trading account)
Page 29 of 152
Charts www.icharts.in , Click the CHARTS link

Take any stock , say RELIANCE and draw the following :
5 , 13 and 26 day EMA ( Exponential Moving Average) it is a mathematical formula for
finding where the prices are going you dont need to do any calculations.
O Open , C Close , H High , L Low

Red in the chart indicates that the close was below the open Stock fell that day
White or Green in the chart indicates that the close was ABOVE the open Stock rose that day
Reliance has been rising for the last five sessions
MACD Moving Average Convergence Divergence When moving averages move towards
each other , they are CONVERGING , when they start moving away it is DIVERGING
The above chart indicates a BUY why ? Please read below :
Page 30 of 152
How are Buy and Sell signals generated

Buy when the 5 day EMA moves above the 13 and 26 day EMA .
Sell when the 5 day EMA moves below the 13 day EMA
You can go short when the 5 day EMA moves below the 13 day EMA and 26 day EMA
Amateurs trade in the first 30 mins of the market
Professionals trade in last 30 mins of the market
Asset Classes
Real Estate - Not very liquid if you wanted to sell your house tomorrow , you might have to
wait anywhere from three to six months
Gold , Silver Precious Metals very liquid - can sell them easily
Stocks , Mutual Funds , etc Very liquid
Fixed Deposits
- also liquid but may need to pay a penalty to break it
High Interest Savings account Yes Bank (7%), Kotak Mahindra Bank ( 6 %) , Indusind bank
(6 %) very liquid
Gold goes up when there is
a) Inflation government is printing money ( say, Quantitative Easing )
b) Nobody wants to buy stocks
Gold is advisable to have in your portfolio as a hedge against inflation
Portfolio is a fancy name for what stocks do you hold.
Active Income v/s Passive Income
Active income is what you do (eg work at a job) to actively exchange your time for money
Passive Income is the income you make from your assets ( eg Business , Real Estate rent ,
Intellectual Property , etc)
Two good books that can explain active and passive income and the various ways to generate
passive income are
1) Loral Langemier The Millionaire Maker
2) Robert Kiyosaki Rich Dad , Poor Dad
Amazon.com preview the book Look Inside
Both the books are available on :
www.flipkart.com , www.infibeam.com and books.rediff.com
Wealth is built slowly , over a period of time , not overnight

Stock Trading Rules
Preserve 50 % of the profits
Lets say you had LONG position ( you make money when the stock moves UP )
Page 31 of 152
Bought at 100 , currently at 150 profit is 50 , you should put a trade at 125 if the stock
value comes down to 125 you will have at least Rs 25 for each stock
If you had a SHORT position ( you make money when the stock goes DOWN )
Sold at 200 , currently at 100 , you should put a trade at 150 this way you will get at least
Rs 50 for each stock
Various segments on NSE
Cash
Futures
Options
Commodities
Currency
Stock Exchanges ( as listed on finance.google.com )
Europe :
FTSE London
DAX - Germany
CAC France
Asia :
Shanghai - China
Nikkei Japan
Hang Seng Hong Kong
TSEC - Taiwan
KOSPI Korea
SGX Singapore
Australia : ASX www.asx.com.au
New books : Secrets of the Successful trader
--------------------------Quote :
The famous artist Monet was once asked for an autograph by someone. He promptly signed
the paper and returned it back to the person and asked for a huge sum of money .The person
receiving the autograph said , But you just took 10 seconds for it
Monet replied , No , it took me 30 years to get there .
Remember , there is no such thing as an overnight success if you read about one it is
printed there for selling newspapers
---------------------------
Page 32 of 152
Give a person a fish and you feed him for a day , Teach a person how
to fish , and you feed them for life . Catch your own fish in the stock
market
Please start subscribing to Economic Times and Economic Times wealth you will start
reading about the financial conditions , etc Tell your newspaper delivery person
If you want , you can get rid of the tabloids who Ranbir Kapoor is dating currently
or which movie is Nargis Fakhri doing next will not make you any money in the stock
market
This is why there are no STOCK TIPS here , but the process to get your own tips
This is technical analysis , what you are learning Charts , ADX , - this is based on a 100 year
old theory called DOW THEORY so , it is not some passing fad.
Between Jan 2012 and June 2012 the price of Reliance did not change (please see chart
below) if you had a buy and hold strategy , you would have made nothing , but using
technical analysis , you could have bought when the price went up and shorted when the price
went down , you could have made plenty of money This is what Technical analysis can do
increase your bank balance.
Some technical indicators that you will use on the charts its very similar to the various
gauges on a car tells you the speed , fuel left , which gear you are in , etc
The slope of the 13 day EMA ( Exponential Moving Average) decides the trend is it upward or
downward or sideways .
All these indicators are available at a click in Trade Tiger and many other such charting
software.
The price chart consists of
1) the X axis Time
2) The Y axis the Price
And you can add indicators these are complex mathematical formulae ( relax , they are
already built into the charts) you choose one from the menu and it does all the hard work
for you
All you have to do is interpret them correctly and watch your bank balance go up.
Page 33 of 152
ADX This is known as the Average Directional Indicator If this number is above 20 and
increasing , the current trend ( uptrend or downtrend ) is increasing
Below 20 , it has not much meaning just ignore it
If it is coming down from a higher value , say 60 to a lower value , it indicates that the current
trend ( uptrend or downtrend) is reducing
An uptrend happens when the stock makes newer highs the closing price of the stock keeps
moving up
RSI It is called the Relative Strength Indicator It indicates whether the stocks are
overbought ( value of >= 70 ) or oversold ( <= 30 )
Overbought - 70 , Oversold 30
When the stocks are oversold, there is a very likely chance of them going up ( that means you
buy at lower levels and wait for them to go up ) GO LONG
When the stocks are overbought, there is a very likely chance of them coming down ( that
means you SELL at higher levels and wait for them to come down ) GO SHORT
Stochastics It is a just a value that keeps going between 0 and 100

Much like a sine wave
Just remember : Overbought 80 , Oversold 20
MACD Histogram Positive Crossover ( value above zero signals a buy ,

Negative Crossover ( value below ZERO ) signals a sell
MACD is Moving Average Convergence and Divergence this is just in the form of a histogram
so much easier to read.
Page 34 of 152
What is shown here is a technical chart with the four indicators in the chart.
Please increase the zoom percentage to see the chart better
All these technical indicators are also available on www.Icharts.in as well as Sharekhans
TRADETIGER charting software , which comes FREE with the sharekhan trading account
What is shown on the the lower half of the screen is the price pattern for RELIANCE
INDUSTRIES
Notice that
I have marked the area when the stock was
1) In an uptrend Higher Highs and Higher lows you should GO LONG HERE
Notice that when the stock was going up , the RSI and Stochastics are towards the upper
end of the values
2) In a downtrend Lower Highs and Lower lows you should GO SHORT here
Notice that when the stock was going down , the RSI and Stochastics are towards the lower
end of the values
3) A sideways range - when the highs and lows dont move out a certain range - You
SHOULD NOT TRADE in this range
In this range , the RSI and Stochastics are in the mid range and MACD Histogram is also not
moving much.
MACD Histogram is where the BUY and SELL SIGNALS are generated when the lines begin to
go below ZERO it is time to SELL
When the lines begin to go above ZERO , it is time to BUY .
Page 35 of 152
You will also notice where the BUY and Sell Signals are generated a line has been drawn to
the price pattern on the chart This is an LEADING signal meaning it will tell you ahead of
time that the prices are about to move up or down .
Page 36 of 152
Here is the same graph with the ADX Indicator added and the others removed to reduce the
confusion
Notice that the when the ADX increases , the current trend up or down also increases
You make money by being in a trend and following the trend
Remember : The trend is your friend till it bends in the end.
Never , ever trade against the trend - you will ALWAYS LOSE money.
Page 37 of 152
Here is what it looks like on Trade Tiger the free charting tool from Sharekhan
The price is on the top in this screen and the indicators are below it.
Here is another image
LTP Last Traded Price the current price
Page 38 of 152
The following chart depicts two stocks one very frequently traded , that is , it has a high
volume of trading ( INFOSYS ) and the other , not so liquid ( JETKING )
The charts are from : finance.google.com
Page 39 of 152
Attend as many free stock trading seminars as you want

1) www.sharekhan.com has regular sessions check the website for one in your city
Here is a link that I get in the email : you can register , if you like :
http://hh.emm6.in/digitalmailers/vm.php?m=3126&u=a32f2d09e0632c971de788e87b1911b6
Link to FREE Sharekhans online lessons ( from Online Trading Academy) :
The following is a link to the articles by online trading academy some of the best instructors
in the world most of them were former traders , one of them is even a psychologist Dr
Woodruf Johnson
Link : http://lessons.tradingacademy.com/archive/
Here is a link to some more articles by Dr Johnson :

http://www.tradersq.com/woodyjohnson1.htm
How to get a lower brokerage on sharekhan

When opening a sharekhan account , you can get a better and lower brokerage rate if you tell
them that you will be trading a volume of around Rs 1 lakh per month , trading in
commodities and futures and options remember to mention that currency also is in the
pipeline after six months ( the more educated you sound , the more impressed and interested
they will be in giving you a lower rate tell them that you trade Monday to Friday in futures
, commodities ask them for 0.03 % all inclusive ( this is combined of buy and sell sides) .
Tell them if not possible , you will go to someone who will . Most of them are desperate for
business
www.sharekhan.com - open a new account enter your details email and make sure that
the cell no is correct someone will contact you within 2 3 business days
We will be including training sessions later on how to use the Web based sharekhan as well as
the Charting software TradeTiger
Which side ( UP OR DOWN) has the more pressure ?

Take the no of days it went up from point A to point B
Then count the no. of days it took to go down from POINT B to POINT A
The lesser the no. of days , the faster the pressure
Eg it takes 10 days to move from 100 to 200 and only 5 days from 200 to 100 , you know you
can make money faster when it is going down.
Here are some tools to increase your financial awareness and IQ , etc
http://www.moneycontrol.com/mccode/tools/
Page 40 of 152
How do decide which commodity to trade ?
Compare each commodity price change with the margin required

( remember this is downloaded from www.fairwealth.in Downloads - > MCX Margins )
Eg
Crude Oil in this case will return 4600 , margin : 26,500 return : 17% approx
Gold petal ( one tenth of current gold price shown above ) - 7.6 , margin 112 = approx 7 %
Silver : 145 , margin 2800 = approx 5.17 %
Similarly calculate for all of them and then decide which gives you the highest percentage
In this case , CRUDE OIL has the highest returns , so go with CRUDE .
Look at the daily price chart before deciding what is the current trend UP , DOWN or
sideways .
Remember , this is just a partial list www.mcxindia.com Market Data for live prices and a
lot more commodities
Paper Trading with virtual cash

The virtual trading tool learn to trade without REAL money - only virtual money
http://moneybhai.moneycontrol.com/
Identify the stocks that you think are going up and buy a certain amount
1) The total capital ( say X) is to be divided into 10 parts
2) You are not to lose more than 2 % of one tenth of the TOTAL capital ( X )in any given
trade
3) Good Luck!
This is exactly the way you will play with real money as well
The stock portfolio will get with the current prices in real time .
Page 41 of 152
Movies on Stock Market there are many but try these two :
Both of them directed by Oliver Stone
Wall Street ( 1987 ) - Michael Douglas as the trader Gordon Gekko Greed is good,
Charlie Sheen as his understudy Michael Douglas is arrested for Insider Trading and Charlie
Sheen for market manipulation and insider trading
Wall Street 2 ( 2010 ) Money never sleeps Shia LaBeouf , Michael Douglas - Michael
Douglas turns 100 million dollars into a billion dollars after getting out of jail for INSIDER
TRADING - watch the way he does it who says you cant learn anything from movies ?
What is Spot price and what is Futures price ?

Spot Price is the price that is current
Futures price is what you speculate or think the price will be in the future
What is Insider Trading and why is it illegal ?

When you know that a company has given record profits and has increased the sales by a
significant amount and this information has not been made public to the media , etc yet
And you trade on this information , it is ILLEGAL
This is INSIDER TRADING and you should not trade based on it You can and will be put
behind bars ( inside JAIL )
Finding out which stocks to buy or short on Icharts.in
At the end of the day , around 8 pm , the stock prices are updated
If you want to know which stocks to buy ( go long ) , you want the following criteria
5 day EMA is greater than 13 ( or 20 day EMA ) and 5 day EMA is also greater than
You go to www.icharts.in
On the left bar click the text Screener EOD
Scroll to the bottom of the page
Click the button : Advanced Search
Page 42 of 152
Enter the criteria as shown :

EMA 5 greater than EMA 13
EMA 5 greater than EMA 20
and then click Search button.

If you get too many records , try adding some criteria , such as
Last Volume (LASTVOL) greater than Average Volume (AVGVOL)
And you could also type criteria in the lower space ( eg LastVOL greater than 10 lakhs )
To clear the search , use clear search
Based on the above criteria , I got the following records ( run on June 15 )
Page 43 of 152
Page 44 of 152
Now , take any stock , say HINDUNILVR and open its chart by clicking on the charts link on
the left side
Plot the EMA Close , 5 ,
EMA Close , 13
EMA Close , 20
And this is what you see
If you remember from the previous sessions , when the 5 day EMA is above the 13 day EMA
and the 26 day EMA , you buy the stock with a stop loss
When BUYING , stop Loss is calculated as follows :
( The High of the previous day + the low of the previous day ) /2
-2
Page 45 of 152
So , if the high is 100 and the low is 80 , your stop loss will be : (100 + 80 ) / 2 2 = 90 2
= 88
So , you will go into moneybhai.moneycontrol.com and buy this stock with VIRTUAL money
And place a sell order when the price hits 88
You are NOT to use REAL money at this time - please learn first
Money who do we give it so much power ?
Can
Can
Can
Can
Can
you
you
you
you
you
sleep on money ? No
eat money ? No
live in money ? No
travel in money ? No
cook food in money ? No
Then , why do we give money so much power ? It is just a medium of exchange

Pay money and get food at a restaurant
Pay money and get a house for rent
Money is transient and of itself has no substance; it is only good as a medium of exchange.
You can't eat it, drink it, live in it, drive it or wear it - at least not for very long. Many believe
that they want money, but to be specific, what they really want is what money can buy. I
would contend that if you had everything that you have ever desired, money would lose all of
its appeal. The literature is replete with studies that support the notion that money is a poor
motivator. One of the articles written about this subject was a Forbes.com missive by Charles
S. Jacobs, March 6, 2009 entitled, "Why Money Isn't A Motivator." An out-of-proportion
fixation on money, in any particular trade, can be a prescription for greed. Greed distorts
reality into a phantom of itself, resulting in decisions based on conjured notions of what we
"think" will happen, not what is taking place in the charts. Thus, money as a motivator is a
poor prospect.
The question to ask yourself is :

If you had all the money in the world enough you to last you a lifetime and a home what
would you do ?
The thing that you want to do is your desired profession.
Do the thing you love and are passionate about it , and you dont have to work a day in your
life!! Do what you enjoy and it does not feel like work.
Quote : Middle age A time when a broad mind and a narrow waist begin to change
places .
Page 46 of 152
Reading technical stock charts learn to read what the stock market
is telling you - Part One
When you were young , you learnt the alphabet A B C and so on
The charts is the language of the stock market.
We will take an example of each chart the same chart US Dollar vs Indian Rupee
in three different formats
Mar 2012 1 USD = 49 INR
June 2012 1 USD = 56 INR
No wonder more IT work is coming to India , you get more for the US dollar!!
Good for Exporters , bad for Importers.
There are various types of charts available most charting softwares, include Icharts.in , have
all these formats
What we are seeing here are the DAILY charts means the daily closing prices are shown
along with other details ( close of June 21 , close of June 22 , close of June 23 )
WEEKLY charts would show you the data for week 1 ( say MONDAY - June 18 , week 2 ( say
MONDAY June 25 ) , week 3 ( say MONDAY , July 2 )
MONTHLY charts would show you the data for month 1 ( say April 1 ) , month 2 ( say , MAY
1) and so on
1) Line Charts
This is what a line chart looks like it connects the closing prices for the days
Page 47 of 152
2) OHLC or Bar Charts OHLC stands for Open High Low Close
Please increase the zoom percentage if not seen clearly. Here the open , high , low and closing
prices are depicted
Here is the anatomy of a single bar in a bar chart :
Page 48 of 152
3) Candlestick Charts these are by far the easiest to read and the most informative
these have been used by Japanese since 1700s for Rice Trading .
Color of the candle
down
If green or white Stock went up ,
If red or black , stock went
Here is the anatomy of a candle stick:
The red , black , green ,white portion is called the BODY and the straight lines above and
below is called the WICK of the candle
Page 49 of 152
When the stock moves up , it is said to be in a BULLISH trend this is because when a bull
attacks someone , it uses its
h o r n s and pushes the prey UP
When the stock moves down , it is said to be in a BEARISH trend this is because when a
BEAR attacks someone it uses its hands and pulls it DOWN .
Next time you get to see a bear in action (hopefully, not live) on the Discovery or National
Geographic channel , please observe how it handles its prey.
Next, we will see the various shapes of the candle indicating whether the BULLS are winning
or the BEARS are winning or whether it is a TIE.
Please increase the zoom percentage for clearer reading.
Page 50 of 152
Please read the chapter on Candle Stick charting from the book Secrets of Successful
Traders Page 23
Here is what it looks like on the index :
Using Candle Charts to Spot . . . . . . . . . . . . . . . . . .23

the Early Turning SignalsThe Basics
Avoid trading on days when stocks are volatile they are moving up and down without any
direction.
Here is an example of a volatile day
Page 51 of 152
Quote :
One day cricket the cricketers make money , the cricket board makes money , the TV
channels make money , the stadium makes money , the bookies make money too.
What do you get 8 hrs of wasted time and an inflated electric bill ?
Learn to utilize your time productively start noting down where your time is going
What gets measured , gets managed PETER DRUCKER , the management guru
Do you want to know where your time is going ?

We are all given the same 24 hrs a day , how you utilize them is up to you.
List down the things that you do with your time. Your list could include one or more of the
following:
Commute
Work
Chatting with colleagues , friends
Facebook
Email
TV
Internet Browsing
Sleep
Shopping
Dining out , etc
For reducing the commute time to work , you could :
move closer to work

work from home
start and finish at hours where there is less traffic on the road
You could use your facebook time , browsing and email by clubbing them into a batch .
Say , you decide you will be checking them twice in the day once in the noon and once in
evening you could coincide these low brain activities with the hours when your energy is the
least . Target your most important activities for when your brain is at the peak - you know
your best hours for some , it is 15 mins after settling down , for some it is 7 in the morning
everyone is different
Have a to - do list for everyday. Tackle the most difficult or unpleasant task first this way
the rest of the day becomes easy.
Assign priorities to tasks and tackle them accordingly- Do not switch to the next task until
the one on hand is complete . We like to think we are good multi-taskers , but we are really
not. The attention is divided and then you need to recollect what you were doing prior to
getting interrupted Book a conference room for 30 minutes if you have to get away to get
some un-interrupted time.
Page 52 of 152
Reading technical stock charts learn to read what the stock market
is telling you - Part Two
Last time , we looked at the GREEN or WHITE candles , here we look at the RED or BLACK
candles.
Red or black means that the close price was BELOW the open price the stock went down
Page 53 of 152
How to draw trend lines
Take the graph for a period , say 3 months , and draw a line around the highs of the chart
Similarly , draw a line around the lows of the chart
Within a span of three months , we find two different trends
The one in the red is a downward trend lower highs and lower lows
The one in black is the upward trend higher highs and higher lows
Page 54 of 152
Make 1.5 2 % per day for 200 days in the stock market and you could triple or
quadruple your money
You might not make 2 % everyday , you might lose some days , other days you might make
more , do virtual trading : moneybhai.moneycontrol.com
Steps to build up stock market trading money

1) Get out of debt credit card , etc start putting aside money each month to get out
of credit card debt
2) Build an emergency fund six months of fixed expenses and 50 % of discretionary
expenses
3) Budget each month for enjoyment , eating outside , etc
4) Start putting aside some money for stock trading learn in the meantime on virtual
trading
The following description and graph , courtesy of www.wallstreetcourier.com
Page 55 of 152
Going to USA ? A handy guide . . .
Please increase the zoom percentage to see clearly.
Page 56 of 152
Rents www.apartmentguide.com , www.apartments.com

Sharing : www.craigslist.org
Dont try to save money by living in a cheaper neighbourhood it might cost you your life
Signs of a dangerous neighbourhood
Look at the lawns grass growing wildly , not maintained well
Are the cars around you from the 60s ?
Car parts , garbage thrown all over the place
Roads not well maintained means that people around that parts dont pay their taxes
Cars : www.cars.com
Flights , Hotel booking
www.orbitz.com
www.hotwire.com
www.priceline.com
www.travelocity.com
www.expedia.com
Trains :
www.amtrak.com
Buses
www.greyhound.com
Gas / Petrol Prices : www.gasbuddy.com
these are the prices per gallon ( approx 4 litres )
This gives you a map of the prices :
http://www.desmoinesgasprices.com/Price_By_County.aspx
Bank Interest Rates / Loans , Bank Accounts , Credit Unions etc :

www.bankrate.com
www.interest.com
Make sure you are aware of the minimum balance requirements and opt OUT of Overdraft
protection the banks just want to make their bottom lines bigger at your expense
Please read this article : http://money.cnn.com/2012/06/08/pf/checking-accounts/index.htm
The interest rates in US banks are pathetic.
What we call a fixed deposit in India , is called a Certificate of Deposit in US ( CD )
You are far better off with NRE accounts , they now pay 8 10 % per year.
Page 57 of 152
What type of taxes are deducted

Federal Taxes
State Taxes
Social Security Taxes
Medicare Taxes
Approx 20 28 % of your gross salary will be taken away in Federal Taxes and there will be
some state taxes as well .
State Taxes vary by state please see this link :
http://www.retirementliving.com/taxes-by-state
The social security and medicare taxes are never refunded ( the US govt says it will
refund after the person has stayed there for 10 years , but the green card takes too
long and you are allowed only two H1bs ( 3 years each total of six years) if your
green card is not processed by then there is always the risk of no jobs being
available after 6 years .
Therefore , H1b people are paying the US govt close to 2,500 USD per year - the
quota is 65,000 visas per year so every year , assuming all H1bs are working for
the entire year , the US govt enjoys a donation of : 163 million dollars from H1b
holders.
In six years , that is almost 1 BILLION DOLLARS that H1b donate to the US govt
this is a very big issue between the US and Indian govt even being discussed at
the WTO World Trade Organization , another being the regular hike in H1b fees
and the increased rejection rates of visas to the US .
Forget about the green card it takes too long ( more than 9 years ) and it is often used as a
carrot by companies to extract more money from you they take a big cut from your billing
rate by just placing you at the clients place .
Taxes States with no state taxes
Nevada
Texas
Washington ( the one with seattle ) , the other is Washington dc - the capital city
Florida
Saving Taxes
IRA , Roth IRA upto 5,000 dollars per year - similar to public provident fund in India
Other tax saving instruments : Annuities
Think Different
While digging a tunnel for a high speed train in Japan , water was found and water kept
coming back , no matter how much water extraction was done
Page 58 of 152
The project manager then estimated the costs involved for keeping the water out a detailed
plan was created one day a construction worker was thirsty and took a bottle and drank
some of this tunnel water it was very tasty. The result ?
A spring water company was born selling water from this very tunnel
Page 59 of 152
Charting Tools and Online Brokerages in the US

To see the chart of a stock which is listed in the USA , please use : www.stockcharts.com ,
which is similar to icharts.in in India
http://stockcharts.com/h-sc/ui?s=IBM . Please increase the zoom percentage to see clearly.
Page 60 of 152
Here , you can buy when the 5 day EMA moves above the 13 day EMA and the 26 day EMA
Here is another chart , this is apple you can see that at the vertical line , the three EMAs ( 5,
13 and 26 converge this is a very bullish sign if the EMA is moving up)
If you are in the USA , there are some online brokerages ( most of them have a flat rate per
trade if you buy / sell 10 shares , 100 or 1000 shares .
In India we have a percentage of the total amount )
www.zeccotrading.com 5 USD per trade

www.tdameritrade.com
charles schwab
Tradestation - this has some very good graphing tools
Fidelity
Scotttrade
Etrade
Visit finance.yahoo.com in the US and you will see ads for many more . . .
Call the 1800 no on the website or just signup you can directly link bank accounts for in or
out transfers .
Page 61 of 152
For more technical analysis reading material , here is a link :

http://stockcharts.com/school/doku.php?id=chart_school
Page 62 of 152
Did you know that if you have a USA green card or are a US Citizen , you have to pay
taxes in USA on any income earned anywhere in the world ( even in India ) ?
Facebook co-founder Eduardo Saverin saved 67 million dollars in taxes after Facebook went
public by surrendering his US Citizenship he is a brazilian citizen .
Here is the news link :
http://allfacebook.com/eduardo-saverin-citizenship_b88632
if not active , just google Eduardo saverin surrenders us citizenship
Accessing your PF account online in India
http:/ / www.epfindia.com/ MembBal.html

You will need
1) the PF account no
2) the EPFO office where it is maintained
You can also get your claim status :
http://www.epfindia.com/ClaimStatus_New.html
the PF account no is on your payslip , if not , please contact the HR department.
You can also email : retirals@in.ibm.com or
in Lotus Notes : Retirals IBM/India/Contr/IBM@IBMIN
Speaking of PF , let me play the devils advocate here

Suppose on an average each employee in India contributes Rs 2000 per month for PF , there
are , say 150,000 employees in India in IBM
That is Rs 30 crores collected every month in PF
Invested in the stock market , if you get even 10 % returns , that is 3 crores of FREE money
( it is not coming out of your pocket )
Per year , that is 36 crores FREE money
Of course, you could get a fund manager and a good team and REALLY AMPLIFY this
currency and commodities trading )
So , you could get a salary hike just from this money. The tax money is also collected every
month , but submitted to the tax authorities once a year so , say , 5000 per month in all is
available from 150,000 employees , that is 75 crores now!!
This method , in Financial circles , is known as CROWD sourcing and the concept is similar to
how the mutual fund industry generates money ( of course , they have a management fee (
2% or so ) and other ways they deduct charges front and / or exit charges )
Other countries also some form of retirement benefits it is known as 401 K in the US
IBM operates in a lot of countries maybe it can generate additional revenue this way not
sure if this follows the local regulations maybe you need to maintain the money in an
ESCROW account ( a separate account operated by the local revenue departments )
Page 63 of 152
Will Infosys oblige by falling 8 10 % on results this quarter as well , like the last
two quarters ?
Here is the chart for INFOSYS , INFY - please increase the zoom percentage to see it bigger
Point A Results declared in January for the quarter Sep Dec 2011
Before the results were to be declared, it fell approx. from 2895 to 2576 ( approx 12 % )
[ ( 2895 2576 ) / 2895 * 100 ]
In INFY stock futures , you would have made 125 x 319 = that is Rs 39,000 in one
day!!
and then it went from 2576 to 2817 ( approx 9 % - [ (2817 2576 ) / 2576 * 100 ]
That is a return of 21 % in a matter of 21 days
Point B Results declared in April for the quarter Jan Mar 2012
On the day the results were declared , the stock falls approx from 2522 to 2195 ( approx 12
% again) : ( 2522 2195 ) / 2522 * 100
In INFY stock futures, you would have made : 125 x 327 = 40,800 approx in one
day!!
And then it went up to almost the same level within a matter of 12 days
So , another 24 % in a short period
Page 64 of 152
Will Infosys oblige us again ? The results are to be declared after July 10 , 2012
sometime
The futures lot for Infosys costs approx Rs 49,000 ( as of july 7 , 2012 ) and the lot size is
125
Page 65 of 152
I dont want to tell you what to do with your salary hike , but I will tell you how much a
cars value goes down with time . The following below is a listing from carwale , first on Sep
19 , 2011 and the next on July 4 , 2012 almost 10 months apart.
Please increase the zoom to 200 % to see better, I had to fit the image to this page ,
The 2004 Honda Accord has lost almost 1.5 lakhs in 10 months!! The same car is now
available for much cheaper and it will be much more cheaper next year.
The longer the wait , the cheaper the car.
My answer is : mechanics are everywhere , if your argument is that a new car does not break
down that often .
Page 66 of 152
The luxury ( I have arrived ) Mercedes Benz did not do any better
Here are the listings from Feb 2012 and July 2012 ( please increase the zoom)
Page 67 of 152
Cartoon - What is your risk level Taken from the book : Currency Trading for Dummies
In this case , the ULTRA HIGH RISK is BUY and HOLD in cash positions and the low risk is
INTRA DAY TRADING you need to monitor your positions very carefully though it comes
with practice
Page 68 of 152
Earn 15 % per year from Fixed deposits Tax savings mode no

risk of loss of principal
Saving Tax using the Bank Fixed Deposit
You might have heard of saving income tax in India by using PPF , ELSS , Insurance Policies ,
etc there is another way the bank fixed deposit
Lock in period : 5 years
Lets say you go to your big bank , e. HDFC Bank , SBI , ICICI Bank , Axis Bank , IDBI Bank
etc and open a new Tax Saving Fixed deposit ( to keep things simple ) for say 1 lakh rupees
for 1 year - Interest rate 9% per year and keep renewing it every year
You will get a 30 % tax rebate on this amount so 30,000 for the entire 5 years.
So Rs 30,000 in all for 5 years means Rs 6,000 per year ( 6 % per year 6,000 / 1 lakh x
100)
The bank will pay , say 9 % for this fixed deposit per year - 9 plus 6 = 15 % per year will no
chances of losing money since this is NOT the stock market
Guaranteed : 15 % returns
Catch you have to lock in this money for 5 years after which you can withdraw it
TAX FREE
Links :
http://www.hdfcbank.com/personal/product/productdetails/5-year-tax-saving-fixeddeposit/gts8miow
http://www.icicibank.com/Personal-Banking/account-deposit/Tax-Saver-FixedDeposit/index.html
http://www.axisbank.com/personal/deposits/tax-saver-fixed-deposit/tax-saver-fixed-depositfeatures.aspx
http://www.idbi.com/PBG_suvidha_tax_saving_fixed_deposits.asp
Trading Modes
Intraday Trading This is where you start and close your trade on the same day
There is no risk of the position moving against you
E.g. if you are short ( sell first and then buy ) and suddenly there is a good news after the
market closes , if you have this position open the next day you are likely to lose money
Similarly if you are long (buying first and then selling ) and there is some bad news after the
market closes, the stock is likely to go down and you will again lose money
Long Term Trading this is a very long term position you do a good analysis of the past
performance , the management and the long term view of the stock and then open the stock
position for a very long term sometimes 10 to 30 years in the cash position - VERY RISKY
Page 69 of 152
Swing Trading / Positional Trading This is where you take a short term position - as
long as the moving averages are on your side.
Page 70 of 152
On bench ? Why not learn something new that can make you money and smarter in the
future ? Goldman Sachs is coming to Bangalore in 2017 with an office for 25,000 people
outer ring road they are shifting from Mumbai to Bangalore .
It is the next wave of outsourcing Finance have on occasion met some Hedge Fund people
( a very british accent Londoners would be my guess ) in Bangalore at subway / au bon pain
shops
ET Wealth now every week has a series on Technical Analysis the edition in week of July 16,
2012 was about Support and Resistance , next week is about Trends
Page 71 of 152
Which would you rather drive ?

A new Suzuki Swift (2014) or a used Mercedes C class ( make : 2004 2005 ) in 3 years
would have depreciated a lot by then
Three years from now the cost of this NEW SWIFT would have gone up for various reasons increase in the cost of raw material , labour , etc
But the Mercedes Benz would have depreciated , so will cost you lesser
New Suzuki Swift car cost source: www.carwale.com
4.6 lakhs invested @ 10 % per year cumulative for 3 years will give you : 6.12 lakhs ( a fixed
deposit should do that today )
This is the price of a used (2005 / 2004 ) Mercedes C Class as of July 15 , 2012 source :
carwale.com
After 3 years , it will be at least 30 % less ( assuming 10 % depreciation per year ) so a
seven lakh car would cost you about 5 lakhs 3 years from now ( 70 % of 7 lakhs approx
4.9 lakhs )
Page 72 of 152
Three years from now , what would you rather drive : This ? Here is the Mercedes
Page 73 of 152
Or this ? Here is the Maruti Suzuki Swift
The catch you have to wait and save for 3 years be disciplined no impulsive
shopping , no new Iphone or Samsung Galaxy III phone , no Ipad / Tablet , foreign
vacations from your own pocket ,etc
5 lakhs in 3 years (36 months) is Rs 14,000 per month approx. at no interest Create a
new bank account called it the MERCEDES BENZ account , and transfer this amount
automatically to this account from your salary account With interest , you will come out
ahead

seven lakh car would cost you 4 years from now : ( 60 % of 7 lakhs approx 4.2 lakhs )
4.2 lakhs in 4 years (48 months ) is Rs 8,800 per month approx. at no interest Create a
ahead

seven lakh car would cost you 5 years from now : ( 50 % of 7 lakhs approx 3.5 lakhs )
3.5 lakhs in 5 years (60 months ) is Rs 6,000 per month approx. at no interest Create a
ahead.
So , you see , the longer the wait , the cheaper is the car and lesser is the saving
required
The following illustration is taken from the book The Millionaire Maker by Loral Langemier
You have to live the wealth cycle , not the lifestyle cycle - Invest in assets , not liabilities
( a car is a liability too it does not put any money in your pocket an asset will put money
in your pocket a successful business, a positive cash flow from a rental property ,etc but
hey , this is a Mercedes we are talking about)
Page 74 of 152
Did you know ?

You can remove chocolate breakouts / zits / pimples on your face with a mint toothpaste
e.g. Colgate white toothpaste with mint in it just apply a little on the zit / pimple at night ( it
will burn a little that is okay ) and go to sleep . Do this for three to five days and you will see
it disappear.
How to find where is the information leak - If you are in top management and need
to keep things confidential , but they are leaking out try this ( this was in a movie
Miami Vice released 2006 starring Jamie Foxx and Colin Farrell)
Suppose there are five teams you call them individually , one by one
Team one you say blah blah lets call this A
Team two you say something else lets call this B
Team three you say something else lets call this C
Team four you say something else lets say D
Team five you say something else lets say E
At the end , what you hear determines who is talking if you hear C you know the leak is
from Team three
If the teams talk to each other they will just not trust each other . . . because they will not
know who has the right information.
Quote :
If you are dreaming , why not dream BIG ? It takes the same amount of effort
Donald Trump billionaire real estate developer and builder
Page 75 of 152
Do you know who is eating your lunch ? How do you improve

revenues and find new markets
In India recently , a lot of large companies such as INFY , WIPRO , TCS have been losing
projects to smaller competitors like NIIT , HEXAWARE , MINDTREE , MPHASIS
Just look at the stock charts of these smaller companies over the last 1 year to understand
what I am talking about.
This is from google finance please increase the zoom percentage
How is this possible ? The bigger companies have a diversified portfolio BPO , Outsourcing ,
onsite staffing , Linear and Non Linear revenues ( products ) as well as job security .
Non linear revenues are those which do not require additional resources
Say , if you have 20 people on a project and they each pull in , say 30 USD per hr.
In order to increase revenue , you would have to add more people this is a linear revenue
model.
In a non-linear revenue model , you would sell licenses of a software , say , and make more
money this way , the fixed costs are the same , but depending on how good your sales staff
is , you could increase your revenue
So , what are they doing different ? Better cost management , or is just cost cutting
?
When you compete based on cost alone , everything becomes a commodity. In order to find
new revenue areas , you have to think creatively.
One such book that talks about this is
Page 76 of 152
Blue Ocean Strategy: How to Create Uncontested Market Space and Make
Competition Irrelevant by W. Chan Kim and Renee Mauborgne
You can preview the book here :
http://www.amazon.com/Blue-Ocean-Strategy-UncontestedCompetition/dp/1591396190/ref=sr_1_1?ie=UTF8&qid=1343006456&sr=81&keywords=blue+ocean+strategies
In India , you can purchase it from here for less than Rs 800 , if you dont already have it :
http://www.infibeam.com/search?q=blue%20ocean%20strategy
http://www.flipkart.com/search/a/books?query=blue+ocean+strategy&vertical=Books&dd=0&
autosuggest%5Bas%5D=on&autosuggest%5Bassubmittype%5D=clicked&autosuggest%5Bas-grouprank%5D=1&autosuggest%5Basoverallrank%5D=1&_r=n_2yuAC4xgh0SZTuulvAtw--&_l=Tnndui8JdMVk7CZmDKIfXQ-&ref=a0f1f575-4c38-4c6f-af55-a2f6a0aa156b&selmitem=
The other thing is COMPETITOR ANALYSIS

Here is another book that you can preview:
http://www.amazon.com/Competitive-Strategy-Techniques-IndustriesCompetitors/dp/0684841487/ref=sr_1_9?ie=UTF8&qid=1343005790&sr=89&keywords=competitor+analysis
There are many other books on competition analysis as well
It also involves retaining good people , rewarding them with a good pay packet and efficient
use of spare cash ( read : Stock Market trading for generating more revenue , Investing in pre
start-ups and then taking them public , having the right people helps , making the right
acquisitions and targeting future revenue streams )
Here are links to some good articles
The 11 leadership secrets you have never heard about

http://www.forbes.com/sites/augustturak/2012/07/17/the-11-leadership-secrets-you-neverheard-about/
How to turn a job you hate into a job you love

http://www.forbes.com/sites/deborahljacobs/2012/04/16/how-to-turn-a-job-you-hate-into-ajob-you-love/
Page 77 of 152
www.ZeccoTrading.com a preview
Here is a preview of the research and facilities available on www.zeccotrading.com a trade

on this costs 5 USD approx , irrespective of the size. Available to US residents H1b holders ,
L1 and B1 holders also can get one.
Please increase the zoom percentage to see better.

Here are the insider transactions at Microsoft All purchases, gift and planned sales have to
be reported to the SEC ( security and exchanges commission) the US regulator for stock
exchanges.
A filter has been applied to view the SELL transactions only
Page 78 of 152
Zecco also provides analyst reports for companies S And P research on IBM is located at :
File name : sp_research_report_IBM_zecco.pdf
Location :
This is the technical chart with averages
Page 79 of 152
Earnings
Page 80 of 152
Fundamentals
Page 81 of 152
Page 82 of 152
News and articles
Page 83 of 152
Financials Earnings
Page 84 of 152
Financials Cash Flow
Also , please find an article on how Apple saves BILLIONS in taxes

Location :
File name : Apple Hides its billions of proft Times of India
Page 85 of 152
Limited Risk Unlimited Profits Options Calls and Puts

Options are available in most stock markets around the world
Earlier we had talked about how Infosys for the last two quarters , at least , has fallen on
declaring results and this time was no exception
Well , here is the chart with the circle indicating the point where the results were declared
July 12 , 2012 for the previous quarter ( Mar June 2012 )
Please increase the zoom to see clearly .
It fell from 2471 to 2267 that is 204 points
The futures lot is of 125 shares , so the profit on SHORTING would have been 204 x 125 =
25,500 in one day with a lot cost of Rs 48,000 approximately.
But what if you dont have 48,000 to play the stock market with ?
You have another asset class in the stock derivatives market they are called options
If you think the stock will move up , you buy a CALL .
If you think the stock will move down , you buy a PUT.
The lot size is the same as the futures size , only you require a LOT less money to play options
Suppose the current price of INFY is 2400 and you think it will go down to at least 2300 or so
What you do is BUY A PUT for INFY with a STRIKE PRICE of 2300 .
Suppose the current price of RELIANCE is 700 and you think it will go up to at least 750 or so.
What you do is BUY A CALL for RELIANCE with a STRIKE PRICE of 750 .
Page 86 of 152
Here is a screenshot of sharekhans options CALL of STRIKE PRICE 2350 , expiring on

30 Aug 2012 Call option is also called CE
You have to close this position on or before 30 Aug 2012
If you want to buy this , the current price is 12 and you will have to buy 125 , so your total
risk is only : Rs 1500
If at the end of the day or sometime at a later stage , it were to close at 15 and you sold it at
15 , your profit would be : (15 - 12 ) / 12 = 3/12 = 25 % of the total money put up
So around Rs 375 with a capital of Rs 1500
It could go up a lot more , but the MOST YOU WOULD lose is Rs 1500 per lot at this price
It has the potential of unlimited profits and limited losses if you play it right
Please move to the next page to see what each column means.
Page 87 of 152
Column
LTP
Diff
% chg
LTQ
TBQ
TSQ
Open
High
Low
Pr Cl
What is means
Last Traded Price
What is the difference from the previous closing price
Change of price in percentage
Last Traded Quantity
Total BUYERS quantity
Total SELLERS quantity
What price did it open if lower than the previous close ( Pr. Cl) , it is a
bearish sign for the stock
The Highest price for the day
The Lowest Price for the day
Previous Close the price it closed at yesterday or over the weekend
Wt. Avg
TTQ
TTV ( in lacs )
Last Trade Date and Time
Buy Market Depth
Sell Market Depth
Weighted Average
Total Traded Quantity
Total Traded Volume in Lakhs
How recent the quote is
At what price are people willing to buy
At what price are people willing to sell
In terms of calls and puts ,there are some terminologies that people use :
ON THE MONEY if the current price of the stock is 100 and you are buying a CALL of 100 (
Strike Price is 100 ) , you are buying a CALL of ON THE MONEY
IN THE MONEY - if the current price of the stock is 110 and you are buying a CALL of 100 (
Strike Price is 100 ) , you are buying a CALL of IN THE MONEY
OUT OF MONEY - if the current price of the stock is 110 and you are buying a CALL of 120 (
Strike Price is 120 ) , you are buying a CALL of OUT OF MONEY
Similarly , the same terms are used for PUT as well

ON THE MONEY if the current price of the stock is 100 and you are buying a PUT of 100 (
Strike Price is 100 ) , you are buying a PUT of ON THE MONEY
IN THE MONEY - if the current price of the stock is 90 and you are buying a PUT of 95 (
Strike Price is 95 ) , you are buying a PUT of IN THE MONEY
OUT OF MONEY - if the current price of the stock is 100 and you are buying a PUT of 90 (
Strike Price is 90 ) , you are buying a PUT of OUT OF MONEY
Page 88 of 152
Here is the screenshot of a PUT call for INFY with a strike price of 2150
Notice the difference in the title at the top of the page 1 month expiry , PE , INFY and price
of 2150
This is up by 18 % already !!
More people at this point are expecting INFY to go down
If you had put in Rs 10,000 at 21.25 , you would have made : 1800 by now.
In the next session , we will see how to calculate the PREMIUM ( the LTP is the premium )
In India , you can download a software called OPTIONS ORACLE , which will tell you where the
calls and puts are for various strike prices. The software is free and is available on :
Folder : Options Oracle
Filename : optionsoracle.exe you will have to install it on your local machine
Another term you might hear quite often is the PUT TO CALL RATIO If this number is high
(>=3) , it means that a lot of people are expecting that STOCK to go down in value
Page 89 of 152
In case you dont have sharekhan , you can still the see the calls and puts .
Open the following :
http://www.moneycontrol.com/stocksmarketsindia/
In the quotes , type in the stock symbol , say INFY , select QUOTES from the dropdown and
then click the search button
You might see something like this .
Navigate the screen a little bit lower and you will see the F & O quote (Futures and Options
quote ) this is slightly delayed
Page 90 of 152
From the Instrument Type , select Options . Choose the STRIKE price , Call ( CE ) or PUT (
PE ) option and the expiry
This is a CALL option ( CE ) for 30 Aug 2012 expiry , 2300 STRIKE PRICE lost 12 % of its
value today
This is a PUT ( PE ) for Strike Price of 2050 , expiry of Aug 30 ,2012 , has returned 25 %
already
Indian Banks give you 10% risk free in a fixed deposit in a year , here you can make 25% in a
day there is a risk , but the rewards are there too so please EDUCATE yourself and make
money
Page 91 of 152
List of H1b Visa sponsors for US : http://www.flcdatacenter.com/CaseH1B.aspx with wages ,

position offered , etc for the last seven years.
A lot of them work on a 80 20 basis , means that if you find your own project at a billing
rate of say , 60 USD per hr , you get to keep 48 USD for yourself minus the taxes .
You will need a large file editor like ULTRAEDIT (www.ultraedit.com)
Of course , you will need a contract before someone can transfer your H1b to their company
If you are in the US, you can post your resume to one or more of these job sites
1) www.dice.com
2) www.monster.com
3) www.corp-corp.com
If your company has a money separation clause , it is illegal in the USA and even in India (
report to the competitive commission of India ) - You can always threaten them with a Class
Action Lawsuit that the company is NOT LABOUR LAWS compliant the employers know this
already they are counting on you not knowing your rights as an employee
Good books to read - you can preview them on amazon.com
1) The Power of Positive thinking Norman Vincent Peale
2) How to make friends and influence people Dale Carnegie
A good movie about the history of Apple and Microsoft

The Pirates of silicon valley Released 1999
Anthony Michael Hall as Bill Gates
Noah Wyle as Steve Jobs
Page 92 of 152
How to calculate the premium for a Call or a Put

The way to calculate the ideal premium for a Call or a Put is:
Intrinsic value
( for call -> Spot - Strike )

( for put -> Strike - Spot )
( if less than zero just take zero )

+
strike price / ( 1.25 * no . of weeks for the contract to expire * 100 )
Spot Price is the price in the cash market this is the price that you see on
finance.google.com
Strike Price is what you think the target is for that stock
E.g. , as of 10 Aug 2012 , INFY is trading at 2313.05 the SPOT price is : 2313.05
The following is a snapshot from Google Finance
Page 93 of 152
Now suppose I think that the price will touch 2500 before the expiry of the current contract \
( expiry of 30 Aug ) , my STRIKE Price is 2500
In this case , the Intrinsic value for the CALL is : 2313 2500 = which is negative , so , zero
The time value component is : 2500 / ( 1.25 * 3 * 100 ) = 6.67
Strike Price : 2500
Time to expiry : 30 Aug 10 Aug = 20 days , so 3 weeks
So , the total premium is : 0 + 6.67 = 6.67

If you get a premium below this, take it
This is a Out of the money call since the current price is : 2313 and my STRIKE price is much
higher : 2500 . This is a gamble the price of INFY may or may not reach 2500 you are far
better off buying an option which is either below the current price or at the current price ( say
2300 or 2250 may be a better option for the STRIKE price the premium will be much higher
)
If the price does not reach 2500 , the most you will lose is the premium you paid ( 125 is the
lot size the min. qty that you have to buy )
Here are the current premiums being traded for INFY source: www.moneycontrol.com
In this case, more people think that the target will be reached by SEPT rather than
AUGUST.
Page 94 of 152
PUT Example State Bank of India

Here is the example of SBI State Bank of India
Here to calculate the PUT premium for 1800 for 30 Aug 2012 , the procedure would be
Intrinsic Value = STRIKE SPOT = 1800 1887 = -87 , negative , so zero
Time Value = STRIKE PRICE ( 1.25 * 100 * no of weeks to expiry )
Which is 1800 / ( 1.25 * 300 ) = 4.8
The premium for SBI PUT for 30 Aug and 27 Sep for 1800 Strike as of Aug 10 , 2012 evening
is :
Page 95 of 152
More people are expecting the target of 1800 to be achieved in September than in August
Page 96 of 152
How to shortlist stocks ( for free ) around the world based on

Oversold , Overbought and other Technical Indicators
www.finviz.com
On page 31, we had seen how to shortlist stocks in India on icharts.in
This week , we will see how to screen stock markets for going short or going long in at least
20 countries - USA , UK , Japan , Australia , Singapore , Hong Kong , Russia , China , France ,
Germany , etc
Go to : www.finviz.com
Click the Screener link
You might see something similar to this, please increase the zoom percentage to see better.
Now , suppose you would like to screen stocks for USA , select the country as USA from the
top right corner of the dropdown and click on the Technical link in the top centre of the screen
, just below signal.
Here , you can select criteria from the drop down
Eg , I selected
1) 20 Day Simple Moving Average : SMA20 crossed SMA50 above
2) 50 day Simple Moving Average : SMA50 crossed SMA200 above
And this is what I see the list of stocks and the charts below it
This is the criteria for GOING LONG means buying low and selling high
Page 97 of 152
Some technical terms

ATR Average True Range is the range between low and high for a stock for a range or
dates
RSI - Relative Strength Indicator
Beta - is how volatile is the stock compared to the index eg if the index moves 10 points
and the stock A moves 15 points , the stock A is said to have a beta of 15 / 10 = 1.5
High beta stocks are the ones that experts seek to get higher returns ( long or short)
Under signal , some of the terms you might come across are
Channel up This is also known as Flag up it is a pattern that can predict where the price
will go and in how many days
Page 98 of 152
There are some charting software that can show and predict the price based on patterns e.g.
this is an image for a FLAG UP pattern
As you can see, the chart of the stock resembles a FLAG

The POLE of the flag starts from where the stock started rising.
The CLOTH of the flag could be a square , a rectangle or a triangle this is open to
interpretation of the trader . But the point of drawing the cloth is that it should include all or
most of the candles .
In the above case the cloth of the flag is a triangle
Then when the price breaks out of the square , rectangle or triangle , the next target is
measured as follows :
Base of the cloth plus the length of the FLAG pole
Please see the chart above to understand how it is calculated
The duration in which the target is reached is calculated as follows :
( BREAK OUT day FLAG START DAY ) / 3 ,
That is if the flag started 30 days ago and the break out of the flag cloth is today the target
will be reached in 30 / 3 = 10 days
Some of them do reach the target in the timeframe , some dont .
Page 99 of 152
In this case WHEELS should be reaching its target in [ ( July 3 May 21 ) / 3 ] days It has
not done badly in the last three months Returned almost 250 % - please see below from
finance.google.com
All this and more patterns are is documented in the book : TECHNICAL ANALYSIS
Edwards and Mcgee
Preview it here
http://www.amazon.com/Technical-Analysis-Trends-RobertEdwards/dp/1607962233/ref=sr_1_1?ie=UTF8&qid=1345342489&sr=81&keywords=technical+analysis+-+edwards+and+mcgee
Here is a sample from the table of contents :
Page 100 of 152
There are continuation patterns and reversal patterns
Continuation Patterns main ones are FLAG UP or FLAG down

Reversal ones are : HEAD and SHOULDERS, Inverted Head and Shoulders
We will see the Reversal Patterns in the next session
Here is a sample Inverted Head and Shoulders pattern
Sometimes you will hear the words : Support and Resistance

All they means is when the price of a stock holds at a particular level ( say RELIANCE does
not go below , say 650 ) , the stock RELIANCE has a support at 650 ( it is also known as the
FLOOR ) - this is also known as the DEMAND Zone for Reliance
Say , when RELIANCE does not go above 1400 for a long time , 1400 becomes the ceiling or
the RESISTANCE for that stock. This is also known as the SUPPLY ZONE for RELIANCE.
You can also see the chart of an individual stock and information about it
This is RIO TINTO , it is a very big metals player in UK
Page 101 of 152
Page 102 of 152
List of candlesticks dropdown and what it looks like
Candlestick Name and what it means
What it looks like
Long upper shadow
Stock likely to go DOWN
Long Lower Shadow
Stock likely to go UP
Spinning Top White or Green

The current trend ( up trend ) is reaching its
end start tightening your stop losses
Bulls and Bears are both equally pushing
Spinning Top Black or Red
The current trend ( down trend ) is reaching

its end start tightening your stop losses
Bulls and Bears are both equally pushing
Hammer
Stock likely to go UP
As if someone is hitting the stocks from the
bottom
Inverted Hammer
Stock likely to go DOWN
As if someone is hitting the stocks from the
top
Page 103 of 152
Doji
The current trend ( up or down) is about to
most likely reverse - get out NOW
Dragonfly Doji
The current buyers are pushing the price up
start buying
Gravestone Doji
Sellers are pushing the price down start

selling / shorting
Marubozu White / Green

Very strong UP trend Buy now
Marubozu Black / Red

Very strong DOWN trend - SHORT / SELL
now
Page 104 of 152
Here are the results for Aug 19 , 2012 Indian market Large Black Candle ( shorting
candidates)
Please increase the zoom percentage to see better.
MTNL
Here is the same Large Black Candle (shorting candidates) on USA stock market ,
run on Aug 19 , 2012
As mentioned earlier , in the USA , you can keep open a stock short for many days in the cash
segment
In India , in the cash segment , you have to close the position at the end of the day In
futures , you can keep it open till the expiry but you still have to buy it back ( hopefully at a
lower price to make a profit ) before the expiry.
Page 105 of 152
Where to find information about companies in usa no. of employees , credit

history , etc ?
www.dnb.com Dun and bradstreet this is the parent company of Cognizant , which was
formed in 1994.
Can find leads based on business type , industry , employee strength , etc
1) www.hoovers.com
2) www.Infousa.com
Page 106 of 152
Everything you wanted to know about H1b visa and green card
processing via employment for USA , but were afraid to ask
H1b visa , also known as the H1B1 visa , is the work visa for employment .
An employer with offices in the USA has to sponsor this for an employee to work in the US
There are two speeds at which this visa is processed
1) Normal speed the approval takes anywhere from 3 to 4 months
2) Premium speed the approval is done in 15 days guaranteed this costs more for
the employer
When H1b visa is filed, a case or receipt number is given to the employer and they can check
the status of the H1b application online.
That status can be checked here : https://egov.uscis.gov/cris/Dashboard.do
All you need is the receipt number .
The H1b visa is granted for a period of 3 years , after which it can be extended for another 3
years
When H1b visa is approved, a letter arrives for the employer , which is given to the employee
and the employee , along with certain documents , needs to take an interview at the nearest
US Consulate .
If the interviewing visa officer thinks that you are NOT a potential immigrant, your visa will be
approved and on your passport , you will get the US H1B visa stamped along with the valid
dates. Then you can buy a ticket and fly (on your own or the companys expense - that is
upto you )
Your employer can also start sponsoring for a green card in which case there are three
stages
1) Labour approval
2) I-140 and I-485 approval
Right now, for people WITHOUT MASTERS degree , this process is too slow and takes longer
than 8 to 9 years to get completed there is a very long backlog .
For people with masters degree, it is a bit faster (sorry , dont know the exact time frame for
this one.)
But if your labour application has been filed and has been pending for 1 year or more OR has
been approved, you can GET ONE YEAR EXTENSIONS BEYOND the 6th year - you need to
have the exact dates and the approval number which you need to quote when applying for
the extension.
So , there is a way to stay legally after six years on a H1b visa if your labour application is
approved or has been pending for more than a year
Page 107 of 152
What caused the 2008 recession ? The Subprime crisis and how it
was created by big banks like Goldman Sachs and others . . .
You should see the movie : The Inside Job ( released in 2010) - it lists almost everything
that happened
If you want to see the trailer : http://www.youtube.com/watch?v=FzrBurlJUNk
If you want to read a book : THE BIG SHORT Michael Lewis I should warn you that this
book is very financially technical .
Basically people were given home loans of amounts that they were not qualified for.
So , people like gardeners , janitors , whose salaries were around 20,000 USD per year were
approved for loans like 500,000 dollars and they were buying 2 , 3 big homes with this.
Of course , you have to pay the loans back home loans in US are called mortgages (
Pronounced : mor gages the t is silent ) and these people could not.
What the big banks like Goldman Sachs did was create a product out of these bad loans and
sold them to individual investors they were called MBS ( Mortgage Based Securities)
The investors were told that the securities would go up and these big banks betted BIG
against these MBS products
Of course , we all know who won the big banks and the market crashed the banks made a
ton of money.
There was a real estate bubble created - mind you , this was built over 5 6 years and the
current CFO of Infosys , Balakrishnan , famously predicted the collapse of Bear and Sterns
Bank of America called him NOSTRADAMUS for this I believe there was an article on the
internet saying that this newspaper clip is still in his office , prominently displayed Bala is by
profession , a chartered accountant.
Well , there was QE1 and then QE2 and as of today ( Aug 30 , 2012 ) , we are waiting to
hear if there will be another QE ( called QE3 ) on Friday , Aug 31 evening US time
If there is a QE3 , I would suggest you BUY gold and silver in some form
1) DEMAT
2) On the MCX Exchange
3) Buy a small safe or rent a locker at a bank and buy certified GOLD and SILVER mohurs
/ coins / bars from the banks like HDFC , ICICIBANK , AXISBANK , etc because gold
will hit the roof it touched 31,000 recently for 10 grams.
Track the prices here : http://m.moneycontrol.com/rates.php?type=comm - look for gold and
silver
My guess is silver is still cheaper than gold, so it might move up faster.
Page 108 of 152
QE3 arrives , gold and silver shoot up , likely to go up a lot more , Mutual
Funds India and USA
Well , looks like Ben Bernanke gave the world QE 3 on Sep 13 as expected , the prices of
gold and silver shot up
Here is an article from CNBC describing what happens to the gold and silver prices please
increase the zoom percentage to see it clearly
Silver moved up more than gold
Page 109 of 152
The announcement was made on 13 Sep 10 pm India Time and then gold shot up please
see Icharts goldpetal graph below the big green candle is on 13 Sep . Of course it dropped
the next day after lot of people sold it to book profits
Here is the silvermic chart - there is a big green candle on 13 Sep followed by a red candle
indicating a lot of people sold it to book profits
You can follow the prices of gold ,silver and other commodities at :
http://m.moneycontrol.com/rates.php?type=comm
They trade Monday to Friday 10 am to 11:30 pm and Sat : 10 am to 2 pm on working days
Page 110 of 152
So , what is the future for Gold and Silver ?

Well , both are likely to move up they have formed a FLAG UP pattern
The flag pole for silvermic is 12,380 points so soon , it is likely jump to 65,000 + 12380
approx 77,000 . If the flag up theories are accurate , the target will be achieved in 36 /3 = 12
trading sessions A trading session is described as a trading day which is not a holiday.
Here is the data sheet for SILVERMIC the all time high is 73,650 it might break that
Page 111 of 152
GOLD target ?
The target of GOLDPETAL ( which is 1/10th of GOLD) will likely be 3215 + 282 = 3597 , in 32
/ 3 ( approx 11 trading sessions) as per the FLAG up pattern theory .
Here is the information on Goldpetal the all time high is 3260 looks like this is going to be
broken too
Page 112 of 152
Not just gold and silver , other metals such as Aluminum , Copper , Lead , Zinc ,
Nickel have also been moving up - please increase the zoom percentage to see
better.
Prices never move straight up or down there is always some correction due to
profit booking and loss prevention .
Page 113 of 152
Reversal Patterns Inverted Head and Shoulders

Here is an example of a reversal pattern meaning that the stock is about to reverse its
current trend
The stock hits a bottom and then starts rising up the bottom price of the stock is the
inverted head and the price before the lows forms the first shoulder , the price after the low
forms the second shoulder and there is a line joining the two shoulders it is the NECK line
The target is calculated as the head line plus the neck line from the right shoulder , please see
the chart of WIPRO depicted below
The current price of WIPRO is

Sep 3
( this is from finance.google.com ) the signal was given on
Page 114 of 152
Mutual Funds in India and USA - where to find them, how to screen them and how to
invest in them via SIP (Systematic Investment Planning)
You can allocate a certain amount of money every month ( S I P ) and purchase some Mutual
Fund Units via your trading partner such as Sharekhan , Icicidirect ,Axis Direct , Kotak Direct
, etc 0 you can give a standing instruction to your bank for this withdraw a certain amount
every month on a certain date.
India : short-listing them via www.valueresearchonline.com
Another one : http://www.moneycontrol.com/mutualfundindia/
USA finance.yahoo.com Fund screener Link :
http://screener.finance.yahoo.com/funds.html
There are many more search links I know of just this one.
Your criteria should be :
Should be in existence for at least 5 years search criteria
Investing abroad Icicidirect.com allows you to do so RBI allows you to invest upto
USD 200,000 dollars ( about 1 crore per year ) abroad LEGALLY no hassles
Mutual Fund terms

Learning :
http://www.valueresearchonline.com/learning/
Terms :
http://www.valueresearchonline.com/learning/Dictionaryarch.asp
INR became stronger compared to USD - why ? because US is printing money flooding the market with US dollars means that no one wants them anymore
When the Fed decided to print money via QE3 , there was an extra supply of dollars and so it
became weaker compared to other currencies
QE3 was announced Sep 13 evening time in India and the very next day , the USD INR fell
from 56 to 54.30
You can track currencies here : http://m.moneycontrol.com/rates.php?type=curr
Here is the graph of USD v/s INR
Page 115 of 152
What to expect for USD v/s INR ?

Because of the reforms announced by the Indian govt and the printing of US dollars by US
govt , I am guessing that the USD v/s INR is going to fall
QE1 and QE2 dates as per : http://mises.org/community/forums/p/23413/406259.aspx
QE1: Nov. 2008-June 2010 , QE2: Nov. 2010-June 2011 (estimation)

This is the USD v/s INR graph for the period Nov 2008 to Sep 2012 .
During the times of QE1 and QE 2 , the USD INR was in the range of 44 48 as shown in
the graph above please increase the zoom percentage to see it better.
Also , you can monitor the EUR v/s USD if Euro goes up against the dollar , INR might also
move up
Page 116 of 152
Here is the EUR v/s USD chart on www.pmbull.com - the euro has been moving up since sep
13 .
Master your money - a set of links for information - not sure if I included this link
earlier in case not , here it is :
http://www.moneycontrol.com/master_your_money/?id=home
Page 117 of 152
How stock prices move they dont move straight up or straight

down due to profit booking and loss prevention the Fibonacci
retraction
Prices rarely move up or down in a straight line why ?
There are many reasons
1) Profit taking if you had bought at a lower price and the price is higher now , you
would want to take some profits. If you had shorted the stock and the price is lower
now , again , you might want to take some profits and put the money back into your
bank account .
2) People who had the trades go against them would want to exit. So if you had shorted
the market and the price is going up , you would want to exit at a loss as less as
possible .
There is one tool , among others that is used it is called the FIBONCACCI retraction .
Fibonacci numbers are 1,1,2,3,5,8,13 and so on - you arrive at the next number by adding
the two numbers before it - Most of the stock charting software have Fibonacci Retraction
Tool you just select the two points between which you would like to see this percentages
and it draws the lines
Well , in the stock chart, you can be pretty sure ( almost 75 80 % of the times) that the
retracement would last till one of the following ratios is reached
1)
2)
3)
4)
5)
23.6%
38.2 %
50 %
61.8 %
100 %
Page 118 of 152
Here is the chart of ZINCMINI a commodity traded in India on MCX Stock exchange , please
increase the zoom percentage to see it better.
As you can see the price started climbing from 101.94 , all the way up to 115.42 before it
started falling till 108.68 and then started rising again.
What is seen on the chart is the Fibonacci retracement ( correction ) percentages overlaid on
the prices
Even in the retracement from 115 to 110, there was a small price increase before it started
falling again
Due to profit taking the price goes in the opposite direction for sometime before the major
trend takes over again.
Page 119 of 152
In International prices , Gold and Silver prices have started moving up , but in India
this effect is not yet seen because the Rupee is getting stronger.
Here is the chart of the USD v/s INR ( please increase the zoom percentage to see better ).
Please see the area in the red square the USD fell from 56 to 54.3 , almost 1.7 Rupees that
day!!
This is due to a variety of factors
1) QE 3 more USD being printed
2) The reforms announced by Indian government FDI in retail , aviation , increase in

diesel prices , etc means more people are getting confident about investing in India
and money is pouring Sep 2012 brought in 2 billion dollars ( estimated ) into India
More reforms are being planned rumours of - FDI in pharma and some other
sectors
As the rupee gets stronger , IT companies , in order to improve margins , may start
sending people ONSITE.
Page 120 of 152
How banks make money

The other day , I went to my bank for some work and the salesperson tried to sell me a
scheme - totally risk free was the point she harped the most .
The scheme : I invest Rs 1 lakh per year for 5 years and then for the next 10 years , I will
get a fixed sum per month and at the end of 10 years a big lump sum .
Well , I thought about it for sometime and said no here is why .
The majority of the money would be coming in at the end of the 10 year and as well as know ,
the purchasing power of money goes DOWN each year because of Inflation.
The bank would have the money for the best years and I would get the major chunk when it
would have reduced a lot of its purchasing power . So you the see , the most risk is NOT
HAVING FINANCIAL KNOWLEDGE also known as Financial I . Q
Lets say you open a fixed deposit in a bank for 1 year at 9.5 % for the amount of 1 lakh . The
banks can legally lend up to 6 10 times ( this multiple is decided by the central reserve
banks , RBI in India ) so your money in the bank is giving a profit to the bank by them
lending it forward.
Did you know that the US Federal Reserve Bank is NOT a govt. institution?
It just has a very govt. sounding name, but is actually controlled by the very super rich people
who control all the banks and the money in the world. This explains all the bailouts of the big
banks time and again at the expense of the taxpayers ( QE 1 , QE 2, QE 3 , etc ) and the
savers by keeping the interest rates at very low rates Donald Trump keeps saying that
the US banks are not lending money at all to the people who need it to buy homes - he would
know he is into real estate big time.
Even the author Robert Kiyosaki says this in his book UNFAIR ADVANTAGE.
More money chasing the same goods causes the prices to go up and this causes inflation.
Guess who controls the goods market right the rich people again.
So , this is a major transfer of money happening from the middle class to the rich
people , the system is gamed in favour of the rich , increasing their wealth
Call me a conspiracist , but this is true .
What is the cost of bread today v/s three years ago ?
What is the cost of sugar today v/s three years ago ?
You already know this answer.
Gold and silver are the true currencies , they hold the value over the years The power of
paper money reduces every year because of inflation.
Buy Gold and Silver in physical form and they dont give daily returns but in demat form ,
they do
Gold SPDR ETF in USA
Many gold ETF in India , also mutual funds
ETF stands for exchange traded fund.
Page 121 of 152
How rich people make their money

Huge amount of shares owned in their own companies , other businesses ,
dividends on those shares is income and the income from dividends is tax free
So , they get income from two methods stock appreciation as well as capital gains , which is
tax free
As a salaried employee , if your income goes up , so do your taxes.
The rich people can afford to pay for good financial advisors , so they pay less in taxes .
Plus govt. in various countries gives them a tax break for providing homes , jobs in their
companies , etc . If you cant beat them , join them
A good book worth reading is :
The millionaire next door Stanley and Danko
You can preview it here:
http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/dp/0671015206
Here is a small section from the preview :
Page 122 of 152
Some terms you may come across on financial websites like CNBC , Bloomberg , etc
Death cross 50 day EMA moves below the 200 day EMA
Golden Cross 50 day EMA moves above the 200 EMA
Circuit Breaker this is a daily limit set for the price limit swings say 3 % or 5 % - this
means that when the stock prices moves up or down more than this limit , trading in this
stock is either stopped for the day or is stopped for 1 4 hrs every exchange has different
rules , depending on the stock and the time of the day when the limit is triggered.
Page 123 of 152
Sprint makes a flag up a stake sale to Japans Softbank is

rumoured to be the reason.
Sprint has been making new highs over the last 1 year or so and the reason is this
There is a rumour of a stake sale to Japans Telecom company : Softbank
Here is the stock price from finance.google.com as of Oct 12, 2012 , the stock is up 144 %
from its price from the beginning of the year.
Page 124 of 152
If you can expand / increase the zoom percentage , you can see that the stock is in a flag up
pattern
Here is the weekly chart for Sprint Nextel from www.stockcharts.com
Notice the price starts going up from the beginning of the year
Page 125 of 152
Now , deals are not cracked overnight it takes a lot of due diligence , study and work .
Lets see who , from the insiders , has been buying this stock for the last 1 year or so
This information is from www.zeccotrading.com

Here is the list of purchases. Please increase the zoom percentage to see it better.
The insiders know about the deals much before anyone else
The CEO made some purchases 11/09/2011 ( MM/DD/YYYY)
The CFO did not know about this deal till May 2012
Did they get any gifts of stock ? Well , lets see.

Please move to the next page to see the list.
Page 126 of 152
Here is the list of sales
Not too many sales , a lot of purchases and a lot of gifts

When the deal goes thru , these people are going to be very rich
The purchase price in sprint is rumoured to be USD 9.50
So , you see , FLAG UP patterns are formed for a reason there is a lot of insider
buying which is why the price keeps moving up
Another reason for you to study the flag up pattern profit potential
Page 127 of 152
Buying a house with a loan / mortgage and putting it up for rent are the returns
really better than a fixed deposit ?
A lot of Indians will disagree with me here they have been taught that REAL
ESTATE IS THE BEST INVESTMENT Is it really? Lets do the math.
Suppose the cost of the home is INR / Rs 50 lakhs ( it is a 3 BHK 1300 sq feet ) and the rent
is Rs 15,000 per month and since it is a pre-booking rate , you will get the possession after 3
years. Assume that the bank has given you a 10 year home loan at an interest rate of 10 %
fixed means that your EMI or monthly payment does not change
Down Payment required : 20 % of 50 lakhs = 10 lakhs . So , for 3 years , until you get
possession of the home , this 10 lakhs is worthless it is not giving you any returns
If you put in the same 10 lakhs into a fixed deposit of 9.5 % per year , you will get 1 lakh (
approx ) per year - for three years , that is 3 lakhs that you have lost already.
Also , you will be making payments every month for the next 10 years ( assuming the bank
has given you a 10 year home loan at an interest rate of , say 10 % fixed .
As per an EMI calculator , at the following link :
http://www.deal4loans.com/Contents_Calculators.php
The loan amount is 40 lakhs at an interest rate of 10 % per year for 10 years ( 120 months) ,
your EMI is : Rs 52,860 and over a period of 10 years , you will be paying a total of Rs 63.5
lakhs for getting a loan of Rs 40 lakhs
After the third year , your home is ready and you put it up for rent .
Rs 15,000 per month for 12 months will be Rs 1.8 lakhs
Returns : 1.8 lakhs per year
Total cost : 73.5 lakhs ( 10 lakhs plus 63.5 lakhs for loan payments )
Return ratio : 2.5 % per year ( approx)

We have not yet taken into account
1) The property taxes
2) the Utility bills ,
3) The maintenance charges that the builder charges every month
Considering this , the real returns will be even less
Of course , you get a small tax break / incentive for getting a loan.
We all need a house to live in but for investment purposes , this is a really really bad return
Of course , your only hope is that the home will appreciate that is also dicey depends on
the location , proximity to schools , public transportation , shopping , good roads , connectivity
, etc
Of course , fixed deposit will give you a much better returns 9.5 % and you dont
even need to have 10 lakhs as a minimum amount
So , the people who really benefit from promoting REAL ESTATE IS THE BEST investments are
Page 128 of 152
1) Banks ( they get income from your loans )

2) Government ( they get property taxes every year )
3) Builders ( they can sell homes and people like us buying investment properties
reduces their inventory and they can jack up the rates anytime )
So , this is a NEXUS between these three to get your money from you as fast as possible.
Please do buy a home for yourself and your family , but if you are looking for an
investment ( such as the scenario described here ) , it is NOT A good return.
Page 129 of 152
How to save taxes on the gains of a home in India .

Sold a home at a profit ? Plan to sell a home for a neat tidy profit ?
Want to know how you can save taxes ? Read this .
If you have bought a home less than three years ago you will be LOSING a lot of money in
capital gain taxes.
SO , If you are planning to sell your home , wait for at least 3 years after purchasing it and
you can save a lot in taxes
If you have availed of a loan and have claimed a tax deduction in your income taxes, if you
sell before FIVE years, all this deduction will have to be paid back to the Indian govt in the
form of income taxes
The capital gains that you will get will be only 20 % - because it will be considered as a LONG
term capital gains tax
You can reduce this capital gains tax even further by
1) Investing the profits in real estate again within 2 years of selling your previous home
2) Buying NHAI bonds National Highway bonds - the current returns are 5.5% per year
or so
The other ways to save depend on your tax bracket.

For more information , please contact your financial advisor
So , wait 5 years if you have taken a loan and deducted this from your income taxes
Page 130 of 152
How you are sold items in ads ?

We will study two cases here
1) Samsung Cell phones
2) Toyota Etios Cars
3) Nissan Sunny CAAR
Samsung cell phone has an ad where an elderly gentleman is using two phones and is in a
caf where he asks someone what is the stock market status for New York
Then a young lady replies with all the answers and calls her UNCLE
Bottom line : If you are NOT using our products , you are OLD and OUTDATED. Samsung is
selling by calling you OLD and OUTDATED Selling by INSULTING.
Toyota Etios Cars - This is an ad where the user is driving the car and the elders ( parents )
are looking at you admirably and in another frame , the friends are appreciating you by
patting your back
Message : We all like to be admired and respected by our peers and elders .
Buy this car and you will get all that.
It is not just the product it is mixed with emotions learn to see the subtle hidden
messages and you will become a better marketing person.
Sunny CAAR There is a lady in an apartment comes to the terrace / balcony to hang
clothes for drying. Then she sees the neighbours new NISSAN SUNNY CAAR.
She tells her husband that the neighbours have bought a new caar we should also get one
This is selling using PEER PRESSURE everyone else is doing it , we should do it too
.
Of course other ways of selling using a celebrity to promote their products eg. Shah Rukh
khan driving a Hyundai I 20
Or seducing you with cute babies or good looking people ( men / women )
Page 131 of 152
Getting married ? Please make sure that you know the financial
habits of your partner .
Financial experts say that the most common reason newly wed couples have fights is because
of money . One is a spender , other is a saver .
There are many financial tests available to find out which one are you.
Here are the links to a few :
http://www.valueyourmoney.org/couples-and-marriage/couplesquiz.asp
http://www.quibblo.com/quiz/9eYxtIr/Financial-Compatibility-Quiz
http://www.marriageinvestors.org/files/fincompquiz.pdf
You can google financial compatibility tests for more

Experts also say that couples declare all the assets ( savings accounts , fixed deposits , real
estate , stocks , bonds , etc) to each other as well as the liabilities ( credit card debt , car
loans, home loans , personal loans )
Also the incomes from their jobs, so that they can plan their expenses , vacations , other
expenses such as entertainment , dining out , etc
This way over a period of time you can agree on a variety of things such as when to buy
furniture, car and a home.
There are various applications that you can use to keep track of your joint money accounts . I
may have covered some of them earlier in the document , but here they are again.
1) Intuit Money manager allows you to manage credit cards , bank accounts , budgets
Link : http://www.moneycontrol.com/intuitmoneymanager
I have been using this since Aug 2011
2) Perfios this allows you track credit cards, bank accounts as well as your brokerage
accounts such as sharekhan , motilal oswal , icici direct , kotak direct , axis direct , etc
Link : https://www.perfios.com/MyFinanceApp.html
Just started this about 4 days ago has brokerage account features which is better than Intuit
3) You need a budget : Link : http://www.youneedabudget.com
Features : http://www.youneedabudget.com/features
Finally bought the full version after using the trial version for a long time.
Page 132 of 152
Places to see while in the US Part 1 - Chicago

Features in the FREE Version of perfios money manager
Last time we talked about some money / expense manager applications on the web
I tried out the FREE version of Perfios it works with credit cards, bank accounts and quite a
few brokerage / demat / investment accounts I have a sharekhan account.
For the brokerage accounts , it shows you the latest balance and all the transactions in the
cash segment but they dont have the Futures and Options and commodities ready yet.
Also, Intuit money manager can take an SMS entry and put it in the cash expenses for e.g. ,
if you just spent , say 700 bucks at a restaurant and paid in cash , you can record that
expense immediately with an entry like : CASH 700 meals and send it to their expense entry
cell number - an entry will be recorded in the database and waiting for you when you get
back to your computer . This feature is, sadly, missing in Perfios.
Perfios, also has a features like
1)
2)
3)
4)
Mutual funds with the best returns

Which type of brokerage is the most popular
Which fund paid the most dividend in 2012
Which fund had the most SIP ( Systematic Investment Plan ) money coming in
Plus, you can search for financial advisors and financial learning courses please see
screenshot below.
And it helps you file your income tax as well I have not tried out this feature as yet.
Page 133 of 152
Places to see in the US - Chicago

Sometimes we are so busy with work , that we often forget to smell the roses.
For instance, I have worked in Chicago twice , but never saw any of these places listed below
( probably because I did not know about them !!) - must admit that I visited the beach
downtown quite often , though it is very nice in the summer ( June September ).
If you are in the US and are working in greater Chicagoland area, here are some places to see
( and help the US economy )
Chicago downtown has a very famous road , it is called the Lakeshore Drive similar to
Mumbais marine drive - Sea on your left or right ( depending on which side of the road you
are driving ) , and tall buildings on your other side . Here are some photos (found on the
web)
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Here is a view at night (sourced from the web)
Winters are not a good time to visit, especially after a snow storm photo below.
Page 135 of 152
During the summer, if you are an avid biker, you can participate in the bicycle marathon that
takes place every year where the roads are closed to traffic and open to bicycles only here is
a photo.
Getting around in Chicago

Chicago has good public transportation Web : http://www.transitchicago.com/
1) Buses
2) Elevated Train the L
http://www.transitchicago.com/riding_cta/how_to_guides/ridingthetrain.aspx
3) Metra if you stay away from downtown , in the suburbs , this will get you in and out
of downtown website : http://metrarail.com/metra/en/home.html
All of them have monthly passes for regular commuters
Where to stay
If you dont have a car and want to live near the train station, there are at least two
apartments that I know of that are located close by
1) Naperville - time to downtown 35 40 minutes
2) Wheaton - approx 25 minutes to downtown train station
Also , you might want to try a rental property Equity Residential they allow you to transfer
at 30 45 days notice to any other property around the country and they have a lot of
properties around the major cities - website : www.equityapartments.com
http://www.equityapartments.com/content/coast-to-coast.aspx - for more details on the coast
to coast relocation policy.
Other websites : 1) www.apartmentguide.com 2) www.apartments.com
Page 136 of 152
Other famous Chicago landmarks Sears towers, now named as Willis Tower .
Here is what the building looks like.
There is a sky deck almost 105 floors above the ground level and the 360 degrees view of the
city is amazing. Here is a photo.
Page 137 of 152
John Hancock observatory view from a tall building

360-degree views of Lake Michigan, the North Shore, downtown Chicago
For the arty types, there is the Art Institute of Chicago

If you like the aquatic life , you can visit the Shedd Aquarium
If you like shopping for world class brands, you must visit the CHICAGO MAGNIFICIENT MILE
a mile (1.6 km) long road bound by water and shops in downtown Chicagos posh
GOLDCOAST area.
In winters - if you like skating on ice - you can try the McCormick Tribune Ice Rink in the
millennium park . Here are some pictures.
Page 138 of 152
Parking is so scarce in downtown Chicago that they have built two tall buildings just for
parking Here is a photo
For more sites, please visit

1) the city of Chicagos official website at : http://www.cityofchicago.org
2) http://www.citypass.com/chicago - Chicago's other attractions
Page 139 of 152
If you are homesick and crave for Indian food, there are plenty of good restaurants to choose
from you might find the taste a little bland they have to reduce the spices to cater to the
American people who dont eat much spice just google for Indian restaurants or try the
local yellow pages or yp.yahoo.com the chicken tandoori is their favourite!!
Here is a snapshot of the yellow pages
By the way , Dhansak is a parsi dish .
Want to show your boss how hard you are working?

If you use MS outlook for email, you can schedule to send an email at 12:22 am - just select
options Do NOT send before Date and Time
Leave outlook on and keep the internet active and voila ! The email will be sent at precisely
12:22 am - leave the time a little off so it looks more authentic !!
Page 140 of 152
How to improve your speaking skills in English

There are plenty of English serials on DVD now but I think one of the better ones is
The WEST WING a lot of conversation and you will learn how politics works in Washington
and the White House as a bonus !! You can improve just by watching the DVD available on
www.infibeam.com in India , amazon.com in the US
Or if you have unlimted fast internet , you can try youtube.com or even downloading to your
computer.
You can preview a 5 mins clip at :
http://www.infibeam.com/Movies/west-wing-complete-third-season-dvd/9780790787497.html
Page 141 of 152
Stop and Smell the roses Places to visit in the US part 2 New
York
An update Intuit Money manager will not be available after 28 Feb 2013. However, if you
have an ICICI Bank account, it will be available there.
Here is the notice from them please increase the zoom percentage to see it better.
If you dont have an ICICI Bank account (which gives the access to intuit money manager) ,
you can use PERFIOS free version ( until they go offline too )
New course added for learning what stock options are all about - this is from
ASX Australian stock exchange
Location :
https://skydrive.live.com/?sc=documents&cid=8fa1c65a79961263#cid=8FA1C65A79961263&
id=8FA1C65A79961263%21271&sc=documents
File name : options_course.zip
Page 142 of 152
New York is divided into five boroughs.

Manhattan
Brooklyn
Bronx
Queens
Staten Island
I would stay away from Bronx and Brooklyn not very safe .
Manhattan is the best out of the lot Wall street is downtown, there are ad firms at park
avenue and a lot of offices all over the island
Manhattanites call the people of other boroughs the bridge and tunnel crowd
In queens , there is an island called Long Island also a nice place
The poshest location in Long Island is THE HAMPTONS a beach house at the Hamptons is
the ultimate status symbol amongst the rich
If you are homesick and want to try out some Spicy Indian food , please visit Jackson Heights
in Queens .
Of course Manhattan has good ones too Curry and Curry 33rd street and Lexington ,
Also one on 30th street and between 6th and 7th avenues.
It also has a park in the centre of the island appropriately named, Central Park
http://www.centralpark.com
Page 143 of 152
Here are some photos of central park
Page 144 of 152
Page 145 of 152
If you thought Venice , Italy had the monopoly on gondola rides , Central Park has
them too !!
Page 146 of 152
Other places to visit in New York city

Statue of Liberty on Ellis Island
Page 147 of 152
Grand Central Station all major trains to the nearby states of Connecticut , New Jersey and
Pennslyvania start and stop here
Page 148 of 152
The Empire State Building 34th street and sixth avenue and new yorks famous Yellow cabs.
Page 149 of 152
There is an observation deck on the Empire state building, the views of the city from here are
phenomenal, if you are not scared of heights.
New York has plenty of art museums and a Madame Tussads wax museum
And then there is the famous bustling Times Square full of billboards and very close to the
NASDAQ stock exchange.
New York is a very fast and active city there is never a dull moment in New york.
For shopping, you can be on the upper west side it is also a walkers paradise .
Page 150 of 152
Manhattan has a famous Mall Macys on 33rd street You might have seen the Thanksgiving
parade on TV it is held here
You could also get a helicopter aerial tour of the city and would get to see something like this :
There are double-decker city bus tours that will take you a lot of major landmarks.
If you like plays and musicals, you can try the Broadway street plenty of shows there.
Page 151 of 152
New York has good public transportation , by far the biggest city in US in terms of population
Please visit the website of MTA Metro Transit Authority at : www.mta.info for buses,
subways and ferries schedules and fares .
The ferries are available from Staten Island to downtown Manhattan ( Battery Park) for free
takes about 25 30 mins each way
Wall Street is another famous landmark

If you like tennis and are in New York during the summer end September first week or so ,
you could catch some tennis matches at the US open at Shea Stadium in Queens.
New York is also host to two IVY LEAGUE colleges : Columbia University and Cornell University
Boston has Harvard University , California ( silicon valley ) has Stanford University , Penn.
State has Wharton , Connecticut has Yale University , Maryland has John Hopkins
Page 152 of 152
Slightly Irish Accent 13 realities of Financial Trading

http://www.academyft.com/free-trading-video.htm

Finance Ideas 2012

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Page 1 of 152

Finance Ideas Improve your Financial IQ

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

You could have 1 crore by using Indian Banks accounts by retirement

A lot of new joinees are freshers or say 3 - 5 years of experience

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

Double your money - rule of 72 and quadruple your money - rule of

The money is NOT to be

Doubled your money

Quadrupled your money

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

Making money in the stock market

Preferred Order of reading

Technical Analysis for Dummies

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Do you know where your money is going? Links to Expenses

It can be accessed from : www.moneycontrol.com

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(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

Would you buy an investment that is guaranteed to lose almost 50 %

Used cars v/s New cars

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Automatic Transmission v/s Manual Transmission

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

New Books Available :

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New Folder : Songs

The secret of success is hard work . Now anyone can be successful.

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

What should be the amount covered ?

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Going abroad ? Do these to fit into that culture . . .

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Joke : Oldest profession in the world

The following ad was taken from a USA finance website : finance.yahoo.com

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

Money Saving Tips Groceries, Movies, Travel , Petrol , Diesel , etc

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

Stay at home and watch a movie Popcorn Act II Rs 10 x 4 Rs 40 pop into a

Travel Time, Petrol, Diesel

not speeding ( accelerating) and braking suddenly ,

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

5) keeping your tires inflated at the proper pressure

Saving on cooking fuel ( LPG )

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Free Expense Managers , How to make money using other peoples

Free Expense Managers

Which skill pays better your current one or something else ?

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(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

For commodities in India ,

Gold and Silver prices worldwide

The potential for making money in the commodities market

(c) Copyright 2012 , 2013 Jasvinder Nagpal all rights reserved

What you see if that INR depreciated by 12 paise on June 4

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Exchanges equity and derivatives ( derived from equities )