Stock Market for Beginners X

Описание: In this fifth episode of #GrowwMeets, we spoke to @Neeraj Arora on how a beginner can start to invest in stocks aka Stock Market for Beginners.

Following are the Stock Market for Beginners questions we discussed with ‪@NeerajArora‬
(2:30) How investment in equity outperform other investments?
(5:35) Skills required to get good returns from equity investments?
(9:10) How to analyse a company's management before investing?
(11:22) How to start the journey after seeing the company and management?
(13:38) How to start the journey after seeing the company and management?
(18:30) Should we copycat big investors?

Q: How investment in equity outperform other investments?
The reason I like equity more than real estate and gold is because we can buy shares of companies that are biggest in the world. If you look at the returns of HDFC since its IPO was launched, it has given very good returns. The ticket size in real estate is big but in equity, you can start your investment at Rs 250 as well.

Q: Skills required to get good returns from equity investment?
The meaning of investing is that you should not lose your capital. First you need to understand what the business of the company is and the business model. Then you have to see whether the company has a sustainable competitive advantage. Then you have to research whether the management of the company is good. You also have to do the fundamental analysis of the company which is the quantitative part.

Q: How to analyse a company's management before investing?
You can start off by downloading the company's annual report and financial statement. You have to see the big people of the company, the CEO, CFO, promoters etc. You have to see whether they have committed any frauds or anything wrong before. Step 2 is to see, if a company is dealing with X product and starts making subsidiaries which don't have anything to do with the X product. This is done to revolve money in the company.

Q: How to start the journey after seeing the company and management?
Warren Buffett says that the best investment is the one we make on ourselves. You have to do a fundamental analysis. If you want to invest in stocks, you have to learn the basics. See the company's balance sheet and what the items are there in it.

Q: How can you evaluate risk and consider it in your investment?
If you research about good companies and go to small and mid cap companies, it is possible for your money to become 0. But in large cap, your money will definitely grow. Do not lose your capital for getting higher returns. Having a return of 6% more than the inflation is a good enough return for a common investor.

Q: Should we copycat big investors?
Many people wanted to invest in Titan because Rakesh Jhunjhunwala wanted to invest there. For that we have to see the price at which he bought the share. His thought process and the funds he has are different. You should not give into biases and thought processes. Instead of following a big investor, you have to learn from them.

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Disclaimer: These are not any recommendations for any funds or stocks and are meant only for educational purposes.