Bitcoin- A Famous Illusion


When this word came in any party, whole discussion having no conclusion wobbles onto the topic of crypto currency. No one having the deep knowledge but everyone is expert. You will get the suggestions also, like “Boss,  buy it and you will remember me”, “New era is of crypto currency only”, “Volumes traded in Bitcoins is more than nifty everyday”, “My friend Bought one Bitcoin at 2.5 lac rs and sold at 8 lac rs just in few monts”, ”Government is going to declare it legal and after that the price will shoot”!! and on and on and on..

When we ask experts”So called”, what is Bitcoin, we will get the answer- its crypto currency. Okey!!! But what is crypto currency? Answer is, it is de-centralized system, you can have P2P (Peer to Peer) transactions to give or take that currency say Bitcoin and every Bitcoins having mathematical formula, you just need to crack it and Bitcoin is yours-it is called mining.

I know, you are not understanding what is going on, and still in confusion that what is crypto currency and what is Bitcoin? Lets have some basic ideas in different way.

As Bitcoin is (crypto) currency, means it is currency but crypto. What is crypto? Remember Dan Brown and its books based on cryptology. Crypto means code, and cryptology means study or art to solve the codes. So, Bitcoin is nothing but one currency, and every single piece of Bitcoin backing with one code; code in the form of mathematical formula. You solve one formula and mine the Bitcoin. As it is currency it is having some value compared with dollar. Right now forget about value of the Bitcoin, just focus on how and why it is traded.

There is definite volumes of Bitcoin and after mining the Bitcoin you will sell it to another person, its trading. Is it so simple, just solve one formula and a Bitcoin (15 Lac rs at the pick) is yours? The answer of my question is “nop”. To mine one Bitcoin we need to install super computers say 5-6 such computer all in series to solve one formula. When we connect all in series it generates tremendous amount of heat which requires outside cooling and so capital cost for set up to solve one Bitcoin formula is very high. However, after proper set up you can mine as much as you can.

Bitcoin mining

Now, there is few platforms to trade that Bitcoin. you give me the money and I will transfer Bitcoin on your name. One interesting fact here!! Every Bitcoin is having the name of the owner, past history/transactions and mathematical formula. One more fact, Bitcoin is de-centralized currency. It is just block chain. So, no one having the power to stop the transaction or reverse the transaction. No one means no one, not US president not Reserve Bank chief not even Satoshi Nakamoto. Its extremely difficult to hack Bitcoin or the block chain as it is not connected to any server.

Hold on!!! Who is Satoshi Nakamoto? What is his relation with Bitcoin? What he is doing here in Bitcoin article? Stay tuned for another interesting article of Bitcoin.

Penny Stocking

top-bgHello investors,

To have wealthiest year, I will try to flash the light on how to find penny stock to become multi bagger stock.

We will first try to understand that why to invest in penny stock and also how much to invest in penny stocks. As general rule, one should invest max of 20% of his total investment in penny stock to become his portfolio high risk high return. However, when we give time to the penny stocks, our portfolio will become moderate risk high return. But the main question still remains is why to invest in penny stock and become our portfolio of high risk.

If we go by statistics, suppose one company of 100cr market capital can easily grow to 500cr rs in one year and gave investor returns of 500%. Same can not be easily done in mid cap or large cap companies. So, to make our portfolio high return such stock with proper portion should be there in our portfolio. Now, is there any thumb rules or any procedures to find such penny stocks who can be multi bagger stocks?

To make the rules lets find out the companies who gave multi returns.

Caplin point Lab   5 rs to 400 rs in 3 year

Uniply Industries 3 rs to 300 rs in 3 year

Ducon infratech 0.2 rs to 90 rs in 5 year

Page Industries 300 rs to 17000 rs in 10 year

Hawkins Cooker 10 rs to 4500 rs in 12 year

So lets make own rules from above companies’ principals:

  • Company must have low M cap lets say in between 100-200 cr rs. So that it can have potential to grow like anything.
  • Company must be debt free. So that it attracts investors to invest heavily.
  • Product/idea of the company should be unique. Also vision of the company should be clear.
  • For given product demand should more and competition should low.
  • EPS, P/E ratio should be favourable.
  • Quarterly performance must be good.
  • Very less changes in management as well structural changes in company.

However please be alert, as these stocks are having very low volume & value it may get de-listed. But please note “No risk No gain!”

Make list of your own penny company and apply these 7 rules in it. Take out good 3-5 companies in it and diversify your investment in it. Build your own high return portfolio and enjoy returns!!!


Hello Investors!!!

“The rich invest in time and the poor invest in money”.


Statement of Mr Buffet is so true at any point of time. To start this article, let me tell you that I am not going to write what achievement Mr Buffett did in his life, but what mistakes he did in his life. Its interesting that if we learned from the mistake done and apologized by successful people, we might also be successful.

Mr Buffett as beginner, he used to invest money in penny stocks say 10$ priced and set target to sell at 13$ in 3 year which is quite possible. He saw 30% gain in 3 year which seems excellent return. His investor friend came in his life and told him about compounding interest and they saw that for 3 year with high risk they are getting less than 10% compound interest. So, to invest in penny stocks with high risk at such low return is not good.

New strategy they followed is lets go in stokes with good fundamentals and seems good future. They pick one company IBM and they saw that in 5 year its value can go from 165$ to 300$. Its 12.7% compound interest. Wait wait… To become Warren Buffett 12.7% is very low value. So, they did reverse calculation. To get 20% annual compound interest they need to buy IBM at less than 120$. So, they waited for that opportunity and bought shares like that. This strategy became trump card for them as they are continuously researching on it and 20% annual compound interest is basic and must requirement.

We, as investor, ever think like that? Target set for ICICI bank  in 2 year was 330 when its price at 220, ever we think its right time to invest when its price was at 187? Target set for tatamotors at 700 when its price at 575, ever we invested at 450? Aban offshore target set at 500 when its price was at 350, ever we invested at 145rs?

I have taken example of above 3 shares from different areas. Keeping in mind that all companies fundamental strong but time was not supporting. We need to invest in time accordingly. Vijay Malya, UP Bihar election, Brexit, US election, demonetization, Mistry vs Tata etc are the best examples to invest in time and such incident is bound to happen. We just have to smell it and invest in time.

Caution: This articles are not for beginners. For Beginners continue to invest in mutual funds. Investor means “Money works for you”.

Home Loan Vs SIP

Hello Investors!!!

Today I will present my view on Property vs Mutual Fund. Or lets say Home Loan vs SIP or might be EMI vs SIP. To understand perfectly we will first understand the main difference between Asset vs Liability.

From the small ages, our main goal is to become rich and only rich. Everyone’s goal might be different like going for world’s tour, start high scale industry/business or might be having luxurious cars/homes. But ultimate goal of all is to become rich. To start earning we all start managing our personal finance and accordingly we start investing. Again question comes, where to invest? How to be rich in shortest time duration?

When we start investing, we must understand what is Asset and what is liability. Simply, asset is nothing but which gives cash flows in your pockets is liabilities is nothing but due to which cash flow outs from your pocket.

Now lets think about taking home loan (as per our old tradition Home prices will never go down and it is necessary to have own home). Suppose brothers Mr A and Mr B after marriage, they are living in two difference cities with same rent at home. At the age of 30 Mr A thinks its the time to start investing. He bought one house of 35 lacs rs, with 25 lacs rs home loan and 10 lac rs given from his own saving. 25 lac rs with 10% interest rate and for 20 years tanks 24,125 rs per month. However, suppose he is saving 9125 rs per month by not giving house rent as well from tax saving. So, he is giving extra 15,000 rs per month till 20 years. At the same time Mr B thinks he should invest in mutual funds and let stay in rent houses. So, he started investing 15,000 rs as SIP in mutual fund.

Now, after 50 years at the age of 50 lets see the situations. Mr A has own house with lets say 1 cr rs property value. Mr B is not having his own house but he owns shares in term of mutual funds. With 13% return, he is having 1.71 cr rs which is totallyemi-vs-sip-be-controlled-or-take-control tax free. See the difference, if Mr A  wants to sell his house, who wants his house of 1 cr rs which is 20 years old at old town planning area as investment purpose? Also lets not forget Mr A lost his 10 lac rs savings here. At the same time, if Mr B wants home he can buy new home at best location, in smart cities, with latest technologies, without taking a penny loan.

So, If you thinks your home loan is your asset please note it is not at all your asset. But if you are having your own home and you are giving this home for rent purpose and saving this money in any investment you can be winner else taking home loan is not good idea I think!!!

What if home loan you have to take due to some reason and you also wants money on hand at the end??? Lets start investing 15% of your EMI in SIP and at the end of 20 years half of your invested money back in your hand.

Win-Win Situations…

Market: Safe investing or Gamble

stock-market-gamble-5943068Good morning investors!!

While we are trying to manage our personal finance, few things came in our mind. We manage our finance by either safe FDs, Post office schemes, tax savings schemes or by OR investing heavily in few high risk high return features.

Now, begins with some facts of market, lets say Indian market. In our society, normally our parents used to give advice us that don’t invest in market.  You will always ended up in mess. Your hard cash money will blown out.

How true that advice is?

In 1981 Sensex at 1000, in 1991 sensex nears 2000, in 2001 sensex near 3000, in 2008 sensex at 20000, in 2011 again at 20000 (it went down to 10000 in 4 years), in 2016 it nears 28000. If we see, market rises 28 times in 30 years. Suppose, if you stay invested for such long time you will get definite results. Suppose you get the job at the age of 24 and in  6 years, you can save 5 lac rs and invested in market, at the age of 60 you will have  1.5 cr rs.

In another cricketing way, In 1997, S Anwar scored 194 run against india  and everyone told that no one will beat him, in 2009 CK Coventry scored 194*, again in 2010 S Tendulkar scored 200*, in 2011 V Sehwagh 219 and finally in 2014 R Sharma scored 264 runs. Market is like such innings, if you have patient it will obviously gain. At every high, we used to tell that no one beat him. And every time history created!!!

Why to go for Share rather than FDs? Just take a simple example, two person named A & B. Both get the bonus of 2 lac rs at same time in 2008. A invested his money in FD (9% interest rate at that time,)of HDFC bank for 5 years while B invested his 2 lac rs in HDFC bank shares(Lets suppose on 1st Jan 2009). What is the result at 1st January 2014?

Mr A with 9% interest rate with monthly compounding frequency, he will get 3.1 lac rs in hand.However Mr B will get 10.6 lac rs (includes dividends and splits). Now the main point came here, what is the inflation rate in between??? Inflation rose at an average rate of 10.3%. So generally any bunch of material we were buying of 2 lac rs, costs 3.26 lac rs after 5 year.

You decide, Doing FD is risky or buying share!!!!

Market Mantras:

Invest in more than one sector.

Remain patiently as investor never sell the share.

The more you be patient, the more you you gain.


Good evening investors!!!

As per our old tradition, almost we all have been told to save money in GPF or PPF. Our parents all time continuously saying us that save your money in PPF. It will give your stability in future. And in our ages also it has been safe investing in PPF.

Lets quick start comparing between PPF and SIP. First of all let me tell you that if you invest in PPF , its tax free as well the return of the money is also tax free. Means obviously it is win win situation.The interest rate of the PPF is 8.0% effective from 1st April 2016. You can save upto 1.5Lac in PPF with locking period of 7 years to 15 years and you can also extend it.

Now, start our calculations. From your first salary if you start saving one time 1.5 lac per year (it can be in 12 months partially also) and suppose you got my first job from 25 year, the money you have invested money worth 22.5 lac. and you will get 43.98 lac at the age of 40 years. Same will be repeated and you will get another 43.98 lac. so total 88 lac rs was tax free at the age of 55 years which is quite good money, considering 44 lac at the age of 40 years with you kept as it is(Might be biggest jock!!!). Also you have save 45000 rs by tax saving per year keeping in mind 30% of tax saving from first salary.(Second jock might be!!) If we add all that amount we can win approx 1.01cr rs at the age of 55 year!!! Bravo!!!

Now lets start with SIP(Systematic Investment Plan) in which taxable amount is considered. 12500 per month which is 150000 per year we will save. Now consider, we have invested all 12500 rs in any good mutual fund ,the value you will get approx is 76 lac.

Just one trick here.. Increase the duration to 20 years, and you will get amazing answer of money you will get at the age of 45, 1.5 cr (with 13% return). Yes you will be richer by 1.2 cr rs from 30 lac rs investment. Isn’t it amazing. In PPF, after 30 year you will have 1.01 cr where as in SIP with the same amount and avg return of 13% you can have 1.5 cr rs and easily you will be retire and have fun of life.

Choice is yours PPF or SIP,

  • 15 Year lock period or any point of time all or partial money on your hand in 15 days
  • You can increase amount in SIP as per your capacity.
  • You can choose high risk high return or medium risk moderate return
  • You can start from any age and amount can be as low as 500rs

Start investment as early as possible and get benefits more than you believe.

Believe me!!

Italian Referendum Vs RBI policy impact on Indian market

Good evening!!!

Its again creepy interesting to think how Indian market will get affected by Italian Referendum. We are not going to think much, we will just follow the basics.

Lets see the first effect is on Euro. Euro down to 20 months low vs Dollar, so any companies which are exporting from Britain will get negative impact on medium term and vice versa. Also Italian referendum will create long term questions on EU. Good question is what is EUs life? What if EU not exists? However it will not effect our market immediately.

Shortly, Italy exists will not have major impact like Britain on Indian market.

Now, the major impact on short term as well medium term will be after RBI policy.

First of all we will see the RBI will give few changes on various rates but CRR, Rapo rate and Bank rate will give market major impact. If Repo rate decreases our bank nifty gets cheers and also house loan related companies will get more benefits.

Frankly, I think, still there will be no changes on repo rates as demonetization effects is yet to come.Also Black money to white money conversion without penalty can be done by such aspects.Black money is in form of liquid than in form of gold and than in form dollar. Now, it can be in terms of property.

However, surely govt will put pressure on RBI to change the rates later on else GDP and infrastructure improvement will be real concern.

I believe, market will open tomorrow on flat with uptrend mode. But will be keep one trend if repo rate changes.

At the end US markets are at record highs right now which will be good for global market.