Dear Friends,
Before going ahead I have two things to address.
The first one is about the responce. I am sorry for misunderstanding your silence, which I realised only now on looking at Munchikana's reaction.
Originally posted by Munchikana
We are not asking questions considering your health condition. If we ask questions, we know that you will be constrained to answer them, which means putting additional unnecessary presurre upon you.
Yes friends! you are correct. At this juncture it is really difficult to answer the queries if they start queing up in line - all blame on my health. I again apologise for my misconstrueing the things.
But I request you to make a note of all the queries with reference to the Post No. and start posting. I'll try to come back with the answers as early as possible.
And secondly, I was also misunderstood.
Please read my post carefully.
So, I request you all to put your comments and help me in taking a decision whether to continue it or to have a different approach to reach you.................Waiting for your comments to take a decision over the approach
I never had any idea of discontinueing this thread. I was only worried over the approach part to reach you. I'm not a person who gives up- Thanks to the TA Practices for making me that tough
.
And unless the very purpose is served, I promise you all, I'll never give up.
And now JD, your questions
and a couple of questions:
whats the volume (percentage of holding of the total paid up capital of the company) in which the LT trader trades in?
JD! can you be a little bit elaborative on this question.
If it is with regard to the paid up capital of the Company in which the Investors invest in, there is no such hard and fast rule that this should be a better percentage. And infact for the stock to have market fancy, exchange of hands should be there which creates liquidity. If people just buy and sit, then sometimes it lacks the trading interest- there by liquidity problems. Say e.g., LMW- with due apologies to the pride owners of LMW- is a high value investment stock which lacks trading volumes. It is a well respected company and most of the stock holders are very long term holders. So, the value of the stock increased, but the liquidity is not that much- just for the reason that most of them they just hold it and don't want to sell - and count me as one among them.
and secondly, for any long term player how does the fundamentals (dividend yield) plays to negate any noise emitting out of the technicals?
Dear JD! Again I'm not able to understand the question. So I'm coming up with two answers.
Dividend yield never plays any role in negating the noise. Because generally people who aim at returns by the yield don't look for exit from the security as long as the yield is handsome when compared to the bank rate. So generally the people who invest for dividends, never be in the markets during the noise time or never create noise in the markets as they enter or exit only once. So according to me the community which looks for dividend yield never makes or gets affected by the noise.
Secondly as far as my experience goes, I never had any context to believe that fundamentals and technicals go together
always. In the markets we are seeing a 5%-10% jump in good stocks like HLL, ONGC, Reliance etc. in one or two days and a fall of the same percentage on the very next day or vice versa. So, it is difficult to comprehend such moves from fundamental point of view though they are noise in the security's price.
JD! If my understanding over your question is wrong, please elaborate your question so that I might come out with a clear answer, if I am able to understand your question and know the answer to it
.
And as the dividend yield has come to discussion, here I'd like to share a theory of trading practice. This I read somewhere. I don't remember the name of the theory or the source from where I read- all blame to my memory loss- But the crux goes like this.
The person who derived this theory used to check the dividend yields' of all the index based stocks on the day of closure of the financial year. Break his capital into 10 parts and used to invest equal amounts in those securities which have got the highest yield- means generally bad performers- higher dividend and lower price which means the stock is not doing well currently. His idea is the Index based stock will start performing one day or other and once it turns green, it will be a multi bagger ( we may recollect the example of Tata Motors Story- from 2001 to 2006 from red to green). So some of them give him a very great return that outnumbers the value of loss.
And one more positive point here is as every stock is index based, every stock is more or less well liquid and a temporary loss of market fancy doesn't effect the exit route, in case if he wants to exit any of the stocks. And also the chances for the companies to turn green are more- someday and once they turn green they are the most wanted.
Friends I hope you enjoyed it. This theory is silent on stoploss practices. So I don't know whether there is any stoploss mechanism here. But prima facie it is looking very good to adopt- by a sane mixing of it with our TA.
So friends! once again thanks for being with me and I'm going ahead presuming that my explanation over the said topic is enough lucid to understand.
Happy Practicing TA
AJAY
