Stock Picking for common man

Stock picking is really hard job. That’s why the analysts paid massively, they have to pick the right stock at right time. They have to also ensure a good return over Nifty, please remember that’s the least performance.

In this sense, yes, it is tough job.

But as a common man, we invest in land. Thinking that the value of the land will go up. We invest gold, bank deposit and mutual fund, thinking that it will go up.

Especially, how do we finalise our decision? Which Mutual fund or bank? Mostly trust worthy bank or popular bank you will choose.

That means, that bank is capable to make profit. If you really want to know, whether that bank or company is on profit? There are multiple ways. You can logon to exchange / data provider’s websites free of cost( www.nseindia.com ; www.moneycontrol.com )

It is same way, in our daily life we end up buying products. Those products belong to a company. Why don’t you choose yourself to own that company?

Is it sound difficult for a common man? Yes, if you want to completely own that company.  But you can own a portion of it by investing in equity share of that company.

Some body (maybe you) would have bought Royal Enfield bike, 10 years back. On the same time, you could have invested 10 % of Royal Enfield ‘s price in their company equity shares as well (Eicher motors).

The Maths is here:

Royal Enfield costed in 2006 was about 60,000 INR (Approx.)

10 % of bike cost is 6000 INR. The Eicher motors one share costed 220 INR (Approx.); In that case, you or somebody could have bought 27 equity shares of Eicher motors. Now in 2016, that 27 shares would have worth 550000 INR + every year they have issued dividends too.

This is the power of equity. I have taken the example of a success story. But, the logic of equity shares will be same.

This way of stock picking is not a tough job, if you think logically, invest a small portion of money and invest like you are buying/ owning your stock!!