Some Stories of Share Markets..!!!

TraderRavi

low risk profile
#2
The rise and fall of Harshad Mehta

If ever there has been an enduring image of the way Indian stock markets function, it must be Harshad Mehta holding a big suitcase with Rs 1 crore stashed into it, and explaining to the media how he gave that money to the then Indian Prime Minister Narasimha Rao as donation to the Congress Party.

Then, Mehta, or Big Bull as he has been called for the last decade or so, ruled over the Bombay Stock Exchange and what he said was gospel.

This morning, barely 10 hours after he passed away, the stock exchange did not even react. In fact it rose more than one per cent on opening reacting only to easing of war tensions between India and Pakistan.

Justice had come a full circle.

It was in 1992 that Mehta was exposed as a fraudster more than a financial market Robin Hood to the investing public who had trusted their money in his scrips. The multi-crore securities scam led to a bank (Bank of Karad) closing down, thousands of people losing crores of their hard-earned wealth, and financial institutions coming under hard public scrutiny, including Indias largest bank State Bank of India.

A media-led public outcry followed, which resulted in the government setting up the Janakiraman Committee to probe the scam. At least 10 commercial banks, including Standard Chartered Bank and the National Housing Bank, were affected.

For someone who had begun his career as a dispatch clerk in New India Assurance Company, he had indeed come a long way, albeit not the correct one. He rose to become a stock broker and strove to drive the market to dizzy heights when economic reforms were slowly being unfolded after the historic budget presented by Dr Manmohan Singh, the then finance minister.

According to the Central Bureau of Investigation (CBI), he exploited bank receipt instruments
to the maximum and used the money derived to speculate share prices of several blue chip companies.

Mehta perfected the art of diverting money to the stock market from bank's security portfolio by exploiting the loopholes in the system, according to trade circles in Mumbai. His wealth, perfectly symbolised by the Lexus luxury car he owned, made him a folk hero, and youngsters even heralded him as their new role model (Sachin Tendulkar was still just two years into cricket).

He took over closed companies, pumped in cash and boosted their shares on the stock market. After the scam, he was arrested by the CBI in several cases registered against him for allegedly cheating banks and financial institutions to the tune of several crores of rupees.

After the much-publicised Suitcase Press Conference, a special court ordered a CBI inquiry into Mehtas allegations and whether the scam money was indeed paid to the Congress Party.

When he died following a heart attack at the Thane Central Jail, Mehta was facing trial in as many as 28 cases, but was convicted in only one case involving use of Maruti Udyog Ltd (MUL) funds to the tune of Rs 30 crore in the stock market. All other cases are still pending.

He was sentenced to five years rigorous imprisonment (RI) by Justice M S Rane in MUL case, although Harshad pleaded that the money had been returned to MUL and the latter saying that
it had not lost any amount. He had filed an appeal in the Supreme Court which is still pending.

Though Mehta will go down in history as Indias answer to the US junk bond king Michael Milken who made billions using loopholes in the financial system, it will also be because of him that the stock markets reforms are happening at such a furious pace thanks to some unprecedented government initiatives. For that alone, Mehta deserves some credit.

Midday 31-12-2001

http://www.mid-day.com/news/2001/dec/19061.htm
 

TraderRavi

low risk profile
#3
The rise and fall of Andy Zaky

In the late 1990s, an ad agency creative director I'll call Joe Smith to protect his privacy bought several hundred shares of Apple (AAPL) at $60 apiece. Last fall, at age 42, he found himself out of work and increasingly dependent on the value of those shares to make ends meet.

Following the lead of a 33-year-old investment advisor named Andy Zaky who had written that Apple was going to $750 by January and to $1,000 within a year, Smith converted most of his Apple common stock -- more than he should have -- into high-risk Apple call options. When those options expired in the third week of January with Apple trading below $500, they were worth exactly zero. Smith had lost roughly $400,000 and all his Apple shares.

A lot of people lost a lot of money when Apple went into the extended downward slide that just entered its sixth month. And there were plenty of other experts saying all along that the stock was undervalued and ready to bounce. But Smith's story -- and the story of hundreds of other investors who were following Andy Zaky's so-called Apple model portfolio last fall -- hold a special poignancy for me. Not only did these people get some spectacularly bad advice, but they got it from someone whom I helped make famous.

I'd been writing about Zaky since the fall of 2008. I'd covered his earnings predictions, his buy and sell calls, his critiques of competing fund managers. I'd eaten dinner with him, toured him around my Brooklyn neighborhood, introduced him to my wife.

So I feel a personal and professional obligation to find out what went wrong.

First, some background.

Andy Zaky was born in 1979 and raised in Southern California. He graduated from UCLA in 2003 and UCLA Law School in 2008. His bio on Seeking Alpha, where he's published more than 90 articles over the past five years, describes him as having 10 years of investment experience, although he has no formal training in financial management or technical analysis.

He says he learned everything he knows about trading stocks on the Internet, where he developed a knack for anticipating when a stock was over- or undersold based on a variety of technical indicators, including the Chaikin Oscillator and the RSI (relative strength index).

He first came to my attention in September 2008 with an e-mail that began "Please check your facts." I had written iPod nano when I meant iPod shuffle, and thanked him for catching the error. A month later he showed up in the first of my quarterly "Earnings Smackdowns," which pit professional Wall Street analysts against amateur Apple investors. He was tied for top honors that quarter, having forecast Apple's earnings for Q4 2008 to within a penny.

It was the first of what was to be a series of spot-on predictions -- of Apple's quarterly earnings, of its iPhone unit sales, of the high and low points in Apple's wildly variable stock chart. On May 17, 2012, for example, two days before the stock jumped $30 and began its four-month run to over $700, he issued a public call to buy Apple at $533.52 a share -- advice that was rebroadcast by Daring Fireball's John Gruber to tens of thousands of readers. "This is only the fifth time Zaky has issued a buy on Apple," Gruber wrote. "He's four-for-four."

By then, Zaky had become something of a celebrity. At an Apple Investor Summit held at the Los Angeles Convention Center last March -- a gathering that drew such headliners as Apple co-founder Steve Wozniak, Steve Jobs biographer Walter Isaacson, CNBC's Jim Goldman, Fox Business' Cody Willard, Asymco's Horace Dediu and Fortune's Adam ("Inside Apple") Lashinsky -- Zaky was mobbed by admirers from the moment he identified himself at the back of the room.

Zaky was working hard that spring. He had taken his free newsletter, Bullish Cross, behind a paywall in June 2011, charging subscribers $49 a month for his daily live market analysis, annotated charts and weekly summaries -- pieces that were sometimes 3,000 or 4,000 words long.

"There's a solid easy 500% gain to be had in Apple with an imbalanced low level of risk involved," he wrote, with typical bravado, at the launch of Bullish Cross Pro. "There is such a low risk profile in this trade, that I'm actually pretty shocked that not a whole lot has actually been written about it."

As Apple's share price climbed and Zaky's fame spread, investors clamored to get in. In June 2012 he opened his newsletter up to a flood of new subscribers, charging the members of this group $200 a month. At its peak, Bullish Cross Pro had 700 subscribers and a lively bulletin board where Zaky would often field more than 500 comments and questions a day.

Meanwhile, he was onto something even bigger. In late 2011 he'd launched Bullish Cross Capital L.P. -- basically an Apple-only hedge fund -- with a handful of subscribers. By the spring of 2012, the fund's investor rolls had grown six fold. In a Form D filed in November 2012, Zaky reported to the Securities and Exchange Commission that Bullish Cross Asset Management (BCRAM) had attracted 28 limited partners with an average investment of $378,000. The minimum investment, which started at $250,000, had grown to $500,000 by March 2012.
The Bull Cross model portfolio is now deeply underwater. Click to enlarge

The Bullish Cross model portfolio is now deeply underwater. Click to enlarge

It was in the hedge fund that the first signs of trouble appeared. An investor who spoke off the record because he is bound by a nondisclosure agreement, describes how the fund missed both of Apple's big 2012 rallies -- in April when it hit $644 and in September when it hit $705. Zaky lost nearly nearly 50% of the fund's capital in one month (March) by buying bearish put spreads just before the stock rose 10%. The fund also managed to get crushed when the stock went down. In May, when the stock fell nearly 100 points, Zaky had bet heavily on bullish calls spreads.

"It iis amazing how poorly positioned the fund was," this investor writes. "He based his trades too much on how Apple traded in the past and completely discounted any black swan scenarios. He didn't follow any of his own previous advice about how to properly position yourself -- not over-allocating on single trades and having proper upside and downside hedging."

Bt the fall of 2012, Zaky was desperate to recoup the fund's losses. He bet what was left of its capital on more call spreads, gambling that the stock would rally at $630 and hit $700 by January.

When Apple fell to $505 in late November, he sent his investors what must have been one of the most painful letters of his life:

"Dear Limited Partner," it begins. "It is with extraordinary regret that I must inform you that during this very dramatic period, the fund has sustained very heavy and largely irreversible losses... At this point, it makes very little sense for anyone to make a redemption given that the fund's liabilities are greater than the fund's capital balance."

Zaky had taken under management more than $10.6 million of other people's money and lost it all.

But those lost millions -- suffered largely by well-to-do investors who knew the risks they were taking -- pale next to the damage done to the 700 subscribers at Bullish Cross Pro. Many of these investors have since fled the site and joined a Google group called bc-subs (for "Bullish Cross subscribers"), where they commiserate about their lost retirement funds, their ruined marriages, their thoughts of suicide. Many lost hundreds of thousands of dollars. Some lost millions.

"A significant number of the people who lost money following Zaky's trades were people who were not sophisticated enough to understand the instruments in which they were investing," says one member who asked not to be identified. "Early on, Zaky had made recommendations about not putting more than a certain percentage of one's capital into following his Apple positions, but most people ignored that."

"I fell in love with this punk kid," recalls a 40-year-old freelancer who converted shares she had purchased at $90 into the call spreads Zaky was recommending. "He was cool. He wasn't bullshitting. He made sense."

But things got out of hand in October, when Zaky became convinced that Apple was set to rally. "At some point he lost it. When he said hold on to our spreads, I was losing $25,000 a day. I froze. I couldn't sleep."

"I can distinctly remember his urging members to deploy 'any spare cash' they had into the $655-$705 call spread," recalls another former Bullish Cross member.

"It all seems a bit, well, a bit crazy in retrospect," says Joe Smith, the ad guy who converted his $60 Apple shares into options that expired worthless. "He had this way of very agressively stating his position. But when the share price really started dipping in October and November, his comments started sounding more emotional and bombastic."

Smith recalls Zaky doing things a professional money manager would never do: Picking a public fight with a prominent Apple bear (Seabreeze Partners' Doug Kass). Urging members to write to Apple Investor Relations. Talking about a meeting with Apple chief designer Jony Ive that never panned out.

Most tellingly, when subscribers started asking whether they shouldn't be buying some downside protection, hedging their bets in case Apple kept falling, he grew increasing angry and defensive. "By the time I got there he wasn't talking about risk management," says Smith. "He was talking about going all in."

When Zaky finally advised his readers to bail out of their call spreads, it was too late.

Although there is plenty of anger in the Google group -- talk of a lawsuit and what might happen if they ran into Zaky in a dark alley -- many members recognize that they share some of the blame for putting more money than they could afford to lose into high-risk investment vehicles. Besides, no one forced them to follow the advice, as one member put it, of some punk on the Internet they'd never met.

Others, however, seem to be mostly interested in finding another investment guru who will promise, as Zaky did, easy gains with low risk.

One complaint often heard in the group is that Zaky never took responsibility for what happened or apologized for the losses that were suffered. But I know Andy well enough to know that he's shattered by the experience. You can hear it in his letter to BCRAM's investors:

"As a first generation Coptic-American, I was raised with very deep seeded (sic) traditional notions of honor and responsibility. For this reason, I will spend every living breath I have to work with an effort to make our partners whole again...

"I am deeply sorry that I failed you. I brought dishonor to myself and my family, and all I can do at this point is work hard to try and make things right."

On Bullish Cross Pro, Zaky has moved away from covering Apple and concentrated on trading the SPY, which tracks the S&P 500 and requires less faith in fundamentals. For the few members that remain, he has recommended several recovery plans, some of which involved investing in January 2014 Apple options that have already lost most of their value.

Zaky declined to be interviewed for this article beyond a brief e-mailed comment:

"The bottom line is we didn't expect Apple to crash 40% of its value inside of a few months and trade at a 10 P/E ratio given its cash flows. We were on the bull side of the Apple case and it didn't work. I wish I could give you more, but then it would just look like a complicated set of excuses. And what's the point."

Zaky did post a 19,000-word "Apple postmortem" on Bullish Cross explaining what, as he sees it, went wrong. One member of the Google group summarized it in a haiku:

Technicals failed
Fundamentals also
No one did better

By Philip Elmer-DeWitt

http://tech.fortune.cnn.com/2013/03/04/apple-zaky-bullish-cross/?source=cnn_bin
 

DSM

Well-Known Member
#4
This article is a fantastic read, especially for those who so beleive their predictions that it becomes a conviction which cannot go wrong, and hence loose everything.

Two things a trader or investor has to remember in the market : 1. Price can move in any direction and 2. Fundamental/Technical/Statistical or anyother analysis can predict with probability, but never with certanity.

The rise and fall of Andy Zaky

In the late 1990s, an ad agency creative director I'll call Joe Smith to protect his privacy bought several hundred shares of Apple (AAPL) at $60 apiece. Last fall, at age 42, he found himself out of work and increasingly dependent on the value of those shares to make ends meet.

Following the lead of a 33-year-old investment advisor named Andy Zaky who had written that Apple was going to $750 by January and to $1,000 within a year, Smith converted most of his Apple common stock -- more than he should have -- into high-risk Apple call options. When those options expired in the third week of January with Apple trading below $500, they were worth exactly zero. Smith had lost roughly $400,000 and all his Apple shares.

A lot of people lost a lot of money when Apple went into the extended downward slide that just entered its sixth month. And there were plenty of other experts saying all along that the stock was undervalued and ready to bounce. But Smith's story -- and the story of hundreds of other investors who were following Andy Zaky's so-called Apple model portfolio last fall -- hold a special poignancy for me. Not only did these people get some spectacularly bad advice, but they got it from someone whom I helped make famous.

I'd been writing about Zaky since the fall of 2008. I'd covered his earnings predictions, his buy and sell calls, his critiques of competing fund managers. I'd eaten dinner with him, toured him around my Brooklyn neighborhood, introduced him to my wife.

So I feel a personal and professional obligation to find out what went wrong.

First, some background.

Andy Zaky was born in 1979 and raised in Southern California. He graduated from UCLA in 2003 and UCLA Law School in 2008. His bio on Seeking Alpha, where he's published more than 90 articles over the past five years, describes him as having 10 years of investment experience, although he has no formal training in financial management or technical analysis.

He says he learned everything he knows about trading stocks on the Internet, where he developed a knack for anticipating when a stock was over- or undersold based on a variety of technical indicators, including the Chaikin Oscillator and the RSI (relative strength index).

He first came to my attention in September 2008 with an e-mail that began "Please check your facts." I had written iPod nano when I meant iPod shuffle, and thanked him for catching the error. A month later he showed up in the first of my quarterly "Earnings Smackdowns," which pit professional Wall Street analysts against amateur Apple investors. He was tied for top honors that quarter, having forecast Apple's earnings for Q4 2008 to within a penny.

It was the first of what was to be a series of spot-on predictions -- of Apple's quarterly earnings, of its iPhone unit sales, of the high and low points in Apple's wildly variable stock chart. On May 17, 2012, for example, two days before the stock jumped $30 and began its four-month run to over $700, he issued a public call to buy Apple at $533.52 a share -- advice that was rebroadcast by Daring Fireball's John Gruber to tens of thousands of readers. "This is only the fifth time Zaky has issued a buy on Apple," Gruber wrote. "He's four-for-four."

By then, Zaky had become something of a celebrity. At an Apple Investor Summit held at the Los Angeles Convention Center last March -- a gathering that drew such headliners as Apple co-founder Steve Wozniak, Steve Jobs biographer Walter Isaacson, CNBC's Jim Goldman, Fox Business' Cody Willard, Asymco's Horace Dediu and Fortune's Adam ("Inside Apple") Lashinsky -- Zaky was mobbed by admirers from the moment he identified himself at the back of the room.

Zaky was working hard that spring. He had taken his free newsletter, Bullish Cross, behind a paywall in June 2011, charging subscribers $49 a month for his daily live market analysis, annotated charts and weekly summaries -- pieces that were sometimes 3,000 or 4,000 words long.

"There's a solid easy 500% gain to be had in Apple with an imbalanced low level of risk involved," he wrote, with typical bravado, at the launch of Bullish Cross Pro. "There is such a low risk profile in this trade, that I'm actually pretty shocked that not a whole lot has actually been written about it."

As Apple's share price climbed and Zaky's fame spread, investors clamored to get in. In June 2012 he opened his newsletter up to a flood of new subscribers, charging the members of this group $200 a month. At its peak, Bullish Cross Pro had 700 subscribers and a lively bulletin board where Zaky would often field more than 500 comments and questions a day.

Meanwhile, he was onto something even bigger. In late 2011 he'd launched Bullish Cross Capital L.P. -- basically an Apple-only hedge fund -- with a handful of subscribers. By the spring of 2012, the fund's investor rolls had grown six fold. In a Form D filed in November 2012, Zaky reported to the Securities and Exchange Commission that Bullish Cross Asset Management (BCRAM) had attracted 28 limited partners with an average investment of $378,000. The minimum investment, which started at $250,000, had grown to $500,000 by March 2012.
The Bull Cross model portfolio is now deeply underwater. Click to enlarge

The Bullish Cross model portfolio is now deeply underwater. Click to enlarge

It was in the hedge fund that the first signs of trouble appeared. An investor who spoke off the record because he is bound by a nondisclosure agreement, describes how the fund missed both of Apple's big 2012 rallies -- in April when it hit $644 and in September when it hit $705. Zaky lost nearly nearly 50% of the fund's capital in one month (March) by buying bearish put spreads just before the stock rose 10%. The fund also managed to get crushed when the stock went down. In May, when the stock fell nearly 100 points, Zaky had bet heavily on bullish calls spreads.

"It iis amazing how poorly positioned the fund was," this investor writes. "He based his trades too much on how Apple traded in the past and completely discounted any black swan scenarios. He didn't follow any of his own previous advice about how to properly position yourself -- not over-allocating on single trades and having proper upside and downside hedging."

Bt the fall of 2012, Zaky was desperate to recoup the fund's losses. He bet what was left of its capital on more call spreads, gambling that the stock would rally at $630 and hit $700 by January.

When Apple fell to $505 in late November, he sent his investors what must have been one of the most painful letters of his life:

"Dear Limited Partner," it begins. "It is with extraordinary regret that I must inform you that during this very dramatic period, the fund has sustained very heavy and largely irreversible losses... At this point, it makes very little sense for anyone to make a redemption given that the fund's liabilities are greater than the fund's capital balance."

Zaky had taken under management more than $10.6 million of other people's money and lost it all.

But those lost millions -- suffered largely by well-to-do investors who knew the risks they were taking -- pale next to the damage done to the 700 subscribers at Bullish Cross Pro. Many of these investors have since fled the site and joined a Google group called bc-subs (for "Bullish Cross subscribers"), where they commiserate about their lost retirement funds, their ruined marriages, their thoughts of suicide. Many lost hundreds of thousands of dollars. Some lost millions.

"A significant number of the people who lost money following Zaky's trades were people who were not sophisticated enough to understand the instruments in which they were investing," says one member who asked not to be identified. "Early on, Zaky had made recommendations about not putting more than a certain percentage of one's capital into following his Apple positions, but most people ignored that."

"I fell in love with this punk kid," recalls a 40-year-old freelancer who converted shares she had purchased at $90 into the call spreads Zaky was recommending. "He was cool. He wasn't bullshitting. He made sense."

But things got out of hand in October, when Zaky became convinced that Apple was set to rally. "At some point he lost it. When he said hold on to our spreads, I was losing $25,000 a day. I froze. I couldn't sleep."

"I can distinctly remember his urging members to deploy 'any spare cash' they had into the $655-$705 call spread," recalls another former Bullish Cross member.

"It all seems a bit, well, a bit crazy in retrospect," says Joe Smith, the ad guy who converted his $60 Apple shares into options that expired worthless. "He had this way of very agressively stating his position. But when the share price really started dipping in October and November, his comments started sounding more emotional and bombastic."

Smith recalls Zaky doing things a professional money manager would never do: Picking a public fight with a prominent Apple bear (Seabreeze Partners' Doug Kass). Urging members to write to Apple Investor Relations. Talking about a meeting with Apple chief designer Jony Ive that never panned out.

Most tellingly, when subscribers started asking whether they shouldn't be buying some downside protection, hedging their bets in case Apple kept falling, he grew increasing angry and defensive. "By the time I got there he wasn't talking about risk management," says Smith. "He was talking about going all in."

When Zaky finally advised his readers to bail out of their call spreads, it was too late.

Although there is plenty of anger in the Google group -- talk of a lawsuit and what might happen if they ran into Zaky in a dark alley -- many members recognize that they share some of the blame for putting more money than they could afford to lose into high-risk investment vehicles. Besides, no one forced them to follow the advice, as one member put it, of some punk on the Internet they'd never met.

Others, however, seem to be mostly interested in finding another investment guru who will promise, as Zaky did, easy gains with low risk.

One complaint often heard in the group is that Zaky never took responsibility for what happened or apologized for the losses that were suffered. But I know Andy well enough to know that he's shattered by the experience. You can hear it in his letter to BCRAM's investors:

"As a first generation Coptic-American, I was raised with very deep seeded (sic) traditional notions of honor and responsibility. For this reason, I will spend every living breath I have to work with an effort to make our partners whole again...

"I am deeply sorry that I failed you. I brought dishonor to myself and my family, and all I can do at this point is work hard to try and make things right."

On Bullish Cross Pro, Zaky has moved away from covering Apple and concentrated on trading the SPY, which tracks the S&P 500 and requires less faith in fundamentals. For the few members that remain, he has recommended several recovery plans, some of which involved investing in January 2014 Apple options that have already lost most of their value.

Zaky declined to be interviewed for this article beyond a brief e-mailed comment:

"The bottom line is we didn't expect Apple to crash 40% of its value inside of a few months and trade at a 10 P/E ratio given its cash flows. We were on the bull side of the Apple case and it didn't work. I wish I could give you more, but then it would just look like a complicated set of excuses. And what's the point."

Zaky did post a 19,000-word "Apple postmortem" on Bullish Cross explaining what, as he sees it, went wrong. One member of the Google group summarized it in a haiku:

Technicals failed
Fundamentals also
No one did better

By Philip Elmer-DeWitt

http://tech.fortune.cnn.com/2013/03/04/apple-zaky-bullish-cross/?source=cnn_bin
 

TraderRavi

low risk profile
#5
Now a Financial Scam Hits Indian Stock Markets (May/2001)

By Ehtesham Shahid


BOMBAY -- It was the proverbial fall of the Icarus. The Bank Securities and Fraud Cell of India's Central Bureau of Investigations (CBI) on March 30 arrested Ketan Parekh, the man synonymous with the biggest boom in the history of Bombay Stock Exchange (BSE). The charge against him was allegedly defrauding the Bank of India (BoI) to the tune of Rs 130 crore. Parekh's arrest triggered crash of stock markets for the seventh consecutive Black Friday. By all means, this was a repeat performance. Around the same time in 1992, another Big Bull, Harshad Mehta had brought the market to its knees and then paid the price. Sadly, the so-called watchdogs were found napping on both occasions.

In the following few days, CBI also raided companies linked to Parekh including Panther Investment Traders, Panthers Fincop and Management Services, M/S Classic Private Ltd, Chitrakoot Computers Pvt. Ltd and Nakshatra Software Pvt Ltd. Residential premises of three bank officials and the Mandvi branch of BoI and the Madhavpura Bank were also raided. The event unfolded after BoI filed a complaint with the CBI following which a case of alleged cheating and forgery was registered against Parekh. The complaint said the pay orders issued by the Madhavpura Cooperative Bank in the name of Ketan Parekh and discounted by them (BoI) to the tune of Rs 137 crore, had been dishonored. Pay orders had been credited to the three finance companies owned by Parekh and the amount routed through these companies was Rs 660 crore. The question that arose with these transactions was something had been going wrong which was not tracked by the regulatory authorities.

Even before the Parekh scandal broke out, the stock markets had been witnessing turbulent times across the country. The Calcutta Stock Exchange (CSE) was the first to make news after Abhishek Banka committed suicide on March 19 after reportedly losing money in the market. His wife, Sona followed suit, days later. Subsequently, the BSE witnessed a series of Black Fridays. On February 16 (Friday), the Sensex fell 106.67 to close at 4330.32 and then on February 23, it further plummeted by 140.39 points to close at 4122.16. All Fridays in the month of March saw a decline in the market. March 2, 9, 16, 23 and 30 all witnessed decline in points of 176.49, 174.98, 74.12, 78.69, and 147.18 respectively. Clearly something was wrong with the way things were being run.

T Surinder, Manish Khanduri and Vikas Dhoot, in their cover story, The Unmaking of Mr Ketan Parekh said, "the story of the stock market's recent boom and bust has many elements. Brokers, analysts, fund managers, regulators (and even retail investors) stand accused. Of greed. Of fear. Of incompetence. The gyrations in the global market add spice to the story. But above all, this is the story of one man. His genius and his greed. This story is about the rise and fall of a man called Ketan Parekh." There is a curious similarity between Parekh and his predecessor Big Bull Harshad Mehta. Both belong to Gujarat and both were virtual non-entities before catching up with infamy.

Sucheta Dalal, the Indian Express reporter, who virtually unearthed the Securities scam in 1992, said, "The plot is similar, only the star cast is different. Harshad Mehta may have schmoozed with a larger figure - Rs 660 crore - but there is a ring of familiar about Ketan Parekh's default on Bank of India's Rs 130 crore." Interestingly, Harshad's brother Ashwin Mehta is Ketan's close advisor and both the bulls operated through a close group of family and friends. Ketan's business operations were aided by his brother Kartik, who has been arrested with him.

Ketan Parekh has long been a low-key but influential figure on Dalal Street and has been billed as a maker and breaker of fortunes. He had a penchant for technology shares and was described as the pied piper leading his flock in the direction of his favorite stocks, which became famous as the K-10 index. His grandfather and father Vinubhai have all been involved in the securities business. Like Harshad Mehta, Ketan too had found gaps in the system and closed in on them. Income tax officials had raided his office and residence last year. News of that search had sent shivers down the market. The Sensex, at one time, had slumped nearly 300 points, leading to an erosion of almost Rs 40,000 crore in aggregate market cap on the BSE.

The biggest losers from the entire scam were the smaller cooperative banks. Madhavpura Mercantile Co-operative Bank (MMCB) had provided guarantees worth Rs 200 crore to Ketan Parekh. According to a probe conducted by the Reserve Bank of India (RBI)'s Ahmedabad office, Madhavpura chairman Ramesh Parekh had accommodated Ketan Parekh, with whom he had business dealings. Apparently, Ketan had no account with the bank's branches either in Mumbai or in Gujarat. Following these findings, the RBI superseded the Madhavpura board and placed it under an administrator. Ketan Parekh finally surrendered before the bank fraud and security cell of the CBI on April 5. More intrigue appeared as the investigations went on. Securities and Exchange Board of India (SEBI) probe revealed that Ketan Parekh had another 4.7% holding of Global Trust Bank (GTB). Interestingly, the holding is traced not to Parekh's own companies, but three finance companies owned by detergent magnate Karsanbhai Patel.

The bourse by definition is a gamble. No one has a clue on how it will perform. This is because the market moves less on fundamentals (quality of product, management, demand, market share, etc). and more on perception. Ketan Parekh perceived media companies would do well. So he bought them lock, stock and barrel. Share prices zoomed. Newspapers and magazines wrote about how the 25-year-old directors became millionaires. And soon enough everybody was clamoring for media stocks. All that was based on perception. The other side of the speculation is the effect of international markets.

The rise and fall of technology shares have been far too often for comfort. On April 13, technology stocks reeled under heavy selling pressure for the second consecutive day after the profit warning by tech giant Infosys Technologies. Most of the tech stocks took a further beating with Infosys hitting the lower circuit barrier of 16% for the second day. Another tech giant Hughes Software, however, said it was not affected by the US meltdown, adding that the cost-cutting measures there had, in fact, helped the company to bag more business from US firms. Despite such claims, the truth is that technology stocks are no longer the market's favorite. There have been panic selling and claims and counter claims of its resurgence. Amidst all this, a recurring question surfaces -- Who is calling the shots in Indian markets?



http://www.southasiatimes.com/2001/May2001/economic_news/default.htm

..
 

TraderRavi

low risk profile
#6
Meet Dylan, the day trader

Dylan is a day trader and, to the surprise of no one who knows him, he’s turned out to be rather good one. He’s clever and quick enough to jump on opportunities within seconds of their turning up on his screen, fearless enough to risk losing most of his net worth in one or two trades, disciplined enough not to — and confident enough to know that even if he does, he can make it all back.

Only 25, Dylan plays the markets with a pot of more than $1 million — $100,000 of his own money earned from trading over the past two years, the rest provided by his bosses and partners at AMR Capital Trading. While many of Dylan’s high school friends are still grinding it out in graduate school or moving up the ladder of barely paid “internships,” Dylan last year was pulling down a six-figure income.

“Trading is fun,” reports Dylan. “I’m genuinely excited most days when I get to the office. I was so excited and jazzed by what I was doing that it was a year before I took a day off. For me, this is a dream job.”

Read full article here........http://www.washingtonpost.com/busin...786200-b5d6-11e2-b94c-b684dda07add_story.html
 

bunny

Well-Known Member
#9
I think Rakesh Jhunjhunwala, Ramesh Damani, etc. all are too mainstream. May be some stories about not so popular things?
 

TraderRavi

low risk profile
#10
The Tim Grittani Story: How a 23 year old turned $1500 into $128,000 in 1 year

The brokerage account he wanted to use required a minimum of $12,500, but he didn’t have that much money. So he reached out to his friends and family and borrowed the difference.

But there was 1 big stipulation that his friends and family gave him…

Tim wasn’t able to trade with the borrowed money, it had to sit in the account. He was only able to trade with his portion of the money, which was $1500 at the time.

Because of his limited capital, he decided that he was going to focus on buying penny stocks. He didn’t want to mess around with expensive stocks like Google or Apple as he didn’t have enough money.

Within the first 6 months of using what he learned in the Millionaire Challenge program, he made over $40,000. At one point he even made $11,000 in 15 minutes. He bought the stock AGRT at 40 cents and sold it at 70 cents… all within 15 minutes.

The future

Over the next 12 months Tim is on track to making even more money… $250,000 in profit. So far things are looking good and he is already ahead of schedule. The Millionaire Challenge program has worked out so well for him he went to the Maldives with his mentor Timothy Sykes and is now starting to enjoy the finer things of life.

http://www.quicksprout.com/2012/10/...3-year-old-turned-1500-into-128000-in-1-year/
 

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