Prasenjit Paul - How to Avoid Loss and Earn Consistently in the Stock Market: An Easy-To-Understand and Practical Guide for Every Investor

HOW TO

A VOID L OSS

and

E ARN

C ONSISTENTLY

IN THE

STOCK MARKET

An easy-to understand and practical

guide for every investor

PRASENJIT PAUL

Copyright 2017 by Prasenjit Paul.

ISBN: Paperback: 978-93- 5267- 971-3

Hardcover: 978-93-5267-973-7

Ebook: 978-93-5267-972-0

All rights reserved. No part of this book may be used

or reproduced by any means, graphic, electronic, or

mechanical, including photocopying, recording, taping or

by any information storage retrieval system without the

written permission of the publisher except in the case of

brief quotations embodied in critical articles and reviews.

Because of the dynamic nature of the Internet, any web

addresses or links contained in this book may have changed

since publication and may no longer be valid. The views

expressed in this work are solely those of the author.

Acknowledgement

This book was my dream project for many years. Since 2010, I was fortunate enough to interact and learn from so many individuals that my dream finally turned into reality.

First of all, I would like to thank my parents and sister for their unconditional love, support, and motivation.

Special thanks to thousands of subscribers at www.paulasset.com . Interaction with thousands of retail investors across various market situations helped me to realize the difficulties of small investors. This book is an attempt to solve their issues and to assist them in earning big from the stock market.

A big thank to Abhijeet Anand, my associate at Paul Asset. Whatever I asked him, he never turned down. He had a tough job to read for modifying the manuscript and also had a significant contribution in my entrepreneurial journey.

Thanks to all of my associates at Paul Asset. All you guys are more like my great friends than anything else.

Last but not the least, special thanks to Microsoft Corporation for tools like MS-Word and MS-Excel with an inbuilt feature of spelling and grammar checking! I realized the real potential of MS-Word while drafting manuscript of this book. Without MS-Word, this book would not be written.

Why this book?

Hundreds of books are there about- How to make money from stocks? Still, 80% retail (small) investors suffer an overall loss in the stock market. Over the last three years, I had interacted with thousands of retail investors and realized the reason behind losing money in the stock market. There are too many misconceptions among small investors. Further, many investors prefer to chase behind Stock Tips to earn quick bucks. There are also plenty of free trading tips available across social media (Facebook, Whatsapp, etc.), business channel, and print media. Still, many investors end up losing big in the stock market. I realized the fact that, if I can communicate all the reasons of losing money then many individuals can save their hard earned money in this market. As an investor, your priority should be capital protection. The first two chapters of this book are entirely dedicated to capital protection.

This book is my attempt to save hard-earned money of small investors in equity investing.

Investing in high-quality business (stock) at the right price and holding them for a reasonable period is the only way for wealth creation. It doesnt require an MBA in finance or equivalent degree to select high-quality stocks. Stock picking skills are often considered as one of the most complex subjects in the world. However, anyone from any background can learn it with passion, hard work, and dedication towards the stock market. In this book, you will find various easy-to-implement methods and practical solutions to earn consistently in the stock market.

During my college years, I had gone through dozens of best-selling books written on the stock market. One such notable book is, One up on wall street by Peter Lynch. I learned a lot, but at the same time, I struggled to complete that book. I used to seat with the dictionary while reading that book! It was very difficult to grasp the proper meaning due to very sophisticated English. Its a very time-consuming affair to read a book with the help of a dictionary. Undoubtedly, One up on wall street is one of the finest books that I have ever read but the experience of reading was very painful and tedious. The experience was almost same with another best-seller The Intelligent Investor by Benjamin Graham. It required two years and 3-4 attempts to grasp the full idea of that book. I had gifted that book to few of my friends but after reading few chapters all of them turned down by saying, Learning about the stock market is too boring. That was the first time I realized the necessity to write a book that can simplify the subject. Apart from reading books, I had learned a lot from a very famous web portal, Investopedia. Even, there the subject is presented in such a manner that many readers may lose interest and find it boring. I agree that the stock market is very complex and vast subject, but at the same time, it can be presented in an interesting and easy-to-understand way so that small investors find it interesting and learn more about it.

This book is my attempt to present the complex and vast subject called Stock Market in an easy-to-understand and interesting way so that even 18-year-olds from any background can grasp the idea without any difficulties.

Almost all best-selling books on the stock market are written based on the US stock market. While reading those books, I faced difficulties to co-relate with our Indian market. Over the last few years, interaction with thousands of retail investors helped me to realize the necessity to write a book solely based on the Indian Stock Market. Many of our subscribers occasionally asked to name a good book that is written in Hindi and entirely focused on the Indian Stock Market. I think this book will serve the purpose. Although it is not written in Hindi, still the language used here is so simple that anyone from any background can understand it without any difficulties.

Solely focused on Indian Stock Market with many practical examples, this book will surely solve the purpose for those who are looking to learn the subject with minimum effort.

So, ask yourself

1. Are you looking for easy-to-implement methods that can avoid or minimize loss from equity investing?
2. Do you want your hard earned money to grow consistently and steadily over the years?
3. Are you looking for the easy-to-understand and interesting solution to learn various aspects of the stock market?
4. Above all, are you looking for tension-free investment journey for happy and prosperous life?

If any of the above answers is YES, then just go ahead. This book wont disappoint you.

Chapter 1

How to Avoid Loss in the Stock Market?

1.1 Introduction

Ask your friends, neighbors or your relatives regarding stock market investing. Most of them will discourage you and mention that it is another form of gambling. Many individuals still believe that there is no logic behind the stock price movement. Those who earn big from the stock market are just lucky. On the contrary, the interesting fact is that almost all billionaires in the world have created their fortune through the stock market, either directly or indirectly . Directly refers to the direct stock investing and Indirectly refers to listing their companies on the stock market. One of the worlds richest persons, Warren Buffet created his fortune from direct stock investing while other well-known billionaires like Bill Gates (founder of Microsoft), Mark Zuckerberg (founder of Facebook), Larry Page (founder of Google) made their fortune by listing their companies on stock market. Even in India, you will find many billionaire investors (e.g. Rakesh Jhunjhunwala) who created their entire wealth from direct stock investing.