Turtle Investor

 Now in all the above articles you might be hearing this word so many times. See you should understand the real concept so that you can explain it to a 10 year old Child. Lets dive into the meaning and concept of stock. I would like to explain the concept through a story.    George is a guy living in a remote village. He has got some spare cash. He planned to start a business .He started a coffee shop. He appointed a lady as employee. Now his whole business is of 50000$ value. After an year he planned to sell it  and he don't want to sell the whole business  but only a portion. So he divided the whole business into small units so that everyone can buy it. He divided the whole business into 10000 equal units; now a single unit cost 5$.This 5$ unit is called a share. A share is actually a piece of ownership in a real business. Don't consider it as ticker but as a real ownership.

 Now lets go back to the situation where you had a house not being used and you rented it out. The total value of the house when you was renting was 10000$ and the monthly rent was 100$.After 3 years you planed to sell the property. Now you valued the house and found the value to be 15000$ .So now you have earned a profit of 5000 excluding inflation. That 5000 is called capital gain.

 Now lets come into knowing what is compounding? I don't know of it is a myth that even Einstein said compounding is the eighth wonder in the world. It not about who said it or who recognize it but it really is a wonder. Lets dive into the meaning of compounding. Lets move into previous blog where said about renting the cash which is simply sitting in your hand. Now imagine you already rented the cash(10000$) which was simply sitting in your hand to somebody who is in need at an interest rate of 5% per annually. So at the end of the year one you will be receiving an amount(the rent/interest) of 500$,the person who took money from you repaid all the money after year one including the rent(interest) of 10500 total. Now you have 10500$ of unused cash in your hand. So you decided to rent it(lend) to a needy person now the new person has to pay a rent(interest)of 525$ after completing first year. So this lending and repaying is carried on with the above stated interest. So now you just ...

So lets understand what is interest .Lets start with a scenario; Suppose you have two houses, one in which you live and the other is simply there without use. So you plan to rent your unused house for a premium every month. Now take the same scenario; This time you have 10000$ simply sitting in your hand. So you plan to rent it to a person so that you earn a premium every month. This premium is called interest. The renting of the money(Capital) can be done directly to a person or indirectly through banks. You can also lend money to your own government through bonds. G-sec, T-bills. So every time you rent(lend)your unused money(capital) you earn interest.           Now I would like to say a major fact; All of the major religions of the world prohibits money lending and taking interest. But renting property and taking rent is lawful ;what a joke. So what I want to say to you people is think rationally and go-ahead. In medieval Europe its was considered a sin and n...

Stock Market I hope all have about this market at-lest once in your lifetime. This market is a product of Capitalism. The first stock markets popped up in Europe to finance the voyages to India for trading. Dutch East Indian company is one of the first company in the world to issue stocks to common public. Once the voyage is successful and made profit the company will distribute a portion of the profits to the people who partnered with the company to rise company; in modern times we say dividends which is a portion of the profit earned by the company. So the stock market is just like rice market or wheat market ,the only difference is that here people exchange a piece of ownership of a company for a particular amount of capital. Stock market is the backbone of capitalism which promote private property owning and it gives every individual whether you are black or white African or European to grow along with the company you are owning a privilege you cant get in any other economic state....

Today we will discuss about what is speculation. I will tell a scene. A person is tossing a coin five times, all the five times he got head, now he believe that on sixth time he will get tail only because five times he got head. Can you see any logic in his belief. Absolutely No,This is the same thing happening in stock market these days. Many of these guys believe that if a  stock has been going high for one month it will continue its rally to more highs in the coming month because it has been making highs last month. Just see the above example of a stock of Voltas. It has been going high for last week, so can i  think that it will go on making high in the coming week? Or it will come back to a lower level because it has touched a maximum high? If you believe any of these above stated arguments then that's called pure speculation. Speculation is not supported by any facts or figures. Its simply a feeling of somebody that something will happen only because something has been h...