Stocks – Lesson 1

hat better time to talk of shares than now with the Sensex hitting all time high and the bulls are having fun at the Dalal Street.
This is how most of the articles begin when they want to educate people on stocks and shares and eventually those who came to read will feel that it is not for them and flee from the place. So I thought I would do it a bit different and see if that helps. If you are one who had always wanted to know what stock market is and what they sell there or if you have as a kid (even as an adult) wondered what went high in Sensex and what the hell if it dropped few points, jump in. I will try to take you on a tour to the world of stocks and shares..
Mr. Rohit is a small textile owner. He gets the cloth materials and with the help of a few tailors working under him, he converts them to beautiful dresses and puts them up for sale. He has a good profit, enough to make a living in his rather small city. But he is not content with just being that. He wants to be a big business man. He dreams of it and one day decides to take the risk. So he approaches a bank and gets a loan of 1 Lakh and with some of his wife jewellery he opens a big shop at the heart of the town, employs 10 more tailors and gives his shop the name “Rohit Garments”. After two years, things are getting better, he settles his loan and still makes a profit of 2 Lakhs per year. People identify his brand and rush to his shop. Though the town is small, still many of his customers have to travel 20 kms to reach his shop. So he decides to open three more branches. But this time, he is not going for a loan in the bank. Instead he decides to make his company ‘Public’. This means instead of having 100% ownership on his firm he decides to share it with the public in return for some amount which he can use to open branches, buy tailoring machines and employ more tailors. He contacts a firm specialized in doing this and they sit and decide what is to be done.
They finally come up to a conclusion that Rohit will have 60% of ownership with him and the remaining 40% will go public. They put a valuation for the shop ‘Rohit Garments’ considering its machinery, furnitures, number of people employed, their abilities, the profit making capability etc. Let us say that they arrive at 5 Lakhs by valuation. Then they take 40% of that, which is (40 * 500000)/100 giving 2 Lakhs. Now this 2 Lakhs will be converted to units called shares. If they fix the face value of a share as Rs 10 then there will be 200000/10 = 20 thousand shares. If they fix the face value of the share as Rs 100 then there will be 200000/100 = 2 thousand shares. Let us say they decide that the face value will be Rs 10 (it really does not matter). Now we have 20 thousand shares of “Rohit Garments” ready to be sold to the public. But that is not all. The firm will further advice on the actual price for the Rs 10 unit (something like cost price and selling price). Let us say they decide it as Rs 25. This means the unit which is actually worth Rs 10 will be sold each for Rs 25 to the general public (whoever interested). And by this route, without any loan, Rohit can raise 20000 * 25 = 5 Lakhs for further expanding his business.
Now you might ask “Who the hell will give Rs 25 for something worth Rs 10?” But you will be surprised to know that many will and in fact that is how it works. People buy it hoping it will get better. Don’t confuse with it now, we will discuss that later. One fine day you will find in newspapers and in news (NDTV, CNBC, etc) that “Rohit Garments” have come up with an IPO (Initial Public Offering) of 20 thousand shares of face value Rs 10 at Rs 25 each. If you decide to buy say 100 shares of “Rohit Garments”, you can fill up a form and along with the required DD (100 * 25 = Rs 2500) send it. You will receive the certificate stating that you have been granted 100 shares at Rs 25 each (with face value Rs 10). What you have done unknowingly is to buy shares in the “Primary Stock Market” i.e IPOs.
Now what?? You can keep the shares with you. Whenever “Rohit Garments” did a great job, posted a very good profit and decide to give some to the shareholders they will announce “Dividend”. So if they decide to part with say 1 Lakh as dividend, it will be divided by 20 thousand (remember that initially there were 20 thousand shares issued) giving Rs 5 for each share held. And without doing any work you will get Rs 5 * 100 shares that you have = Rs 500. You will receive a cheque for the amount of Rs 500. Voila!! you made a profit in Stock Market. But that is not all.
Once the IPO is over the shares can get into the “Secondary Market” where they are bought and sold. Since “Rohit Garments” went public it will be given a symbol say “ROHG” and a place in the BSE (Bombay Stock Exchange). This means with the help of this symbol you can see what price it is being currently sold and bought in BSE. The BSE is a place (Secondary Market) to buy and sell shares. You happen to look into the daily newspaper and see that ROHG is now worth Rs 75. This means there are people out there that are willing to give Rs 75 for each share that you will sell them. Now you have 100 shares which you got for Rs 25 each. So if you sell them then 100 * (75-25) = 5000 Rs. Excellent!!! You get Rs 5000 for no work at all, just a buy and a sell. Wow!!!. But you need not sell it. It is upto you. You decide that you will see if the price goes above Rs 75 (So that your profit also becomes higher). After two months one day you check the prices, you find that the price of ROHG is now at Rs 150. You just can’t believe it. That means 100 * (150-25) = Rs12500. Your heart starts beating faster. I will wait you finally decide and then you forget all about it. After a few months one fine day, you check the prices. You are shocked?!? ROHG is quoted at Rs 4. “My God” You shout. That means 100 * (4 – 25) = Loss of Rs 2100. Though the profit and loss was in papers still it is the truth at the given time. So what does it take to get the profits only. Can I buy any other shares in Secondary market. To know the answers wait for Stocks – Lesson no 2.

Ponniyin Selvan

Producer AM Rathnam should be praised for choosing an apt movie for his son that does not highlight the weaknesses of Ravi Krishna. ‘Radha mohan’ who directed the ‘Azhagiya Theeyae’ does another spectacular work in this movie. Vidhyasagar’s melodies have come out really well. Revathy, Prakash Raj and Gopika have done exceedingly well in the roles given to them. As usual Ravi Krishna though does a good job, misses out on a golden opportunity of an award winning performance. Dialogues are of the top notch from Viji. Now to the story..
Venu (Ravi Krishna) is a middle class boy who lives with his mother Ponni (Revathy) and they fight hard to ‘make ends meet’ with their monthly budget. Venu is a responsible guy, who runs the family and who had also single handedly married off his sister. He works in a factory and has a normal life inspite of a ugly scar in his face. His world revolves around his mother, his friends, his factory-mate Guru (Prakash Raj) and the neighbour girl Kani (Gopika). Kani, who has a soft corner for Venu which soon takes the form of love. But she keeps it within her. The problem arises when Venu is adviced by his friends to undergo plastic surgery to remove the scar. He works day in and day out to save the money for the operation. He resents everyone, falls for another girl and ends up in a total mess. When and how he realizes his folly is the remainder of the film.
The film is a sweet one. The dialogues are excellent and well placed. Though it has plently of sentiments it does not leave you sad. It is a great family entertainer without any sexy gimmicks. Gopika is lovely in her role. She plays it to perfection and so does Revathy who has to worry about her son a lot. You will never feel bored even for a minute with the screenplay. There is also a strong message in the film about self confidence and about ‘internal beauty’. Though prakash raj seems a tad under-utilized, he still is fresh in our minds. All in all it is a great film to watch. Another budget-super-dooper-hit from Radhamohan. I just wish that there are many more such films. They are a class of their own. No heroism, no unwanted villans, no sexy dances (Edit: There is one after all and really unnecessary), no double meaning jokes and no unnecessary fights. The story takes care of all these masala.

Rating :: 70/100

Chandrasekhar – Maths Tutition

In short, he was the reason behind my 200/200 in Maths in the Matriculation Examination. He is one of those hard working teachers who teach not for the sake of money, but because they love to do so. Many ‘elite’ students did not prefer his method of teaching. They always felt that he was too slow and that he was not keeping pace with their ability to understand things.

But the simple fact was that, he was teaching with the concept of repitition and it does work wonders. The ‘elite’ students can very well finish off the problems in half the time in takes Mr.Chandrasekhar to teach them, but if they did listen to him, they would have learnt the art of storing in permanant memory rather that their volatile memory. He would teach us again and again till his voice breaks and he is no more able to speak – such a dedicated teacher and there were many who didn’t even pay him their tution fees.

I met him and he was just overjoyed when he learnt that I got Centum, the pride shown in his face. But I for various reasons didn’t continue with him for my Higher secondary maths (in fact I didn’t attend any tuttions at all) and now I doubt whether he would even recognize me. I heard he is having some trouble and there are rumours that he has asthma. Still I don’t understand how people are able to smile saying that he is ill. But I can say only this – He will be remembered by at least this student of his.

Christianity and Christians

Kamal hassan came up with a brilliant and beautiful film called ‘Anbe Shivam’. The film conveys a simple message – ‘Love is God’. We are brought up as Christians, or Hindus or whatever for that matter. If all the religions teach us to love each other, to do good things, then why come we have so many religions out there and how easily we differentiate them. Christians go to church every sunday. Hindus offer poojas, they have a strong belief in ‘Horoscopes’. Muslims give namas thrice a day. Their life time ambition is to visit the holy place called Mecca.  So the stress is not on LOVE, it is on the practices, the policies, the rules, the external beautification and that is what differentiates us all. That is the reason why I am a Christian and you a Hindu. How foolish!!

I still remember when I was a kid, while all others of my age enjoyed the ‘Donald Duck’ show on Sunday 9.00 in Doordarshan, I had to attend the Sunday Mass. Not even a single sunday was spared and there was nothing I could do. And to my Horror, there was a separate subject for Christians called ‘Catechism’ which was way too tough than the ‘Moral Studies’ that our Hindu friends used to study. I never understood the logic behind our not studying the ‘Moral Studies’. Probably our principal felt that Christians were supposed to be moraly perfect. What made matters worse was the fact that the teachers who handled ‘Catechism’ were very sadistic in their approach. They were not to be blamed because all ‘Catholic’ schools were supposed to train their ‘Catholic’ students very well in the ‘Catechism’ subject. This was appraised by having a yearly State-Level Exam in Catechism and the first three ranks would be announced. So our principal and ‘Catholic’ teachers made it a point that we studied the subject extra hours. The rude shock came when we were called for the first time to stay back till 7.00 PM everyday and study the subject, and still worse, we were asked to come on saturdays and sundays to sit and study it. Today I don’t remember even ONE damn thing from the 7+ years of studying Catechism. ‘Anything forced for a sufficiently longer time becomes a Habit’ And we meaninglessly follow it without even giving a second thought for the rest of our lives. One can learn more about Christ’s love in a few hours, than by attending sunday masses for years. Good parents are all that is required.

That was not all. We had to get an attendance signed by our priest every sunday. This was done to ensure that we were attending the Sunday masses properly. And for every ‘Catholic’ festival that was around, we had to prepare days together for a procession and the actual day of the procession would be invariably a Sunday. What more, the processions would be in the main roads of Pondicherry and I very much hated the idea of having to cause terrible ‘Traffic – Jams’ just because we were praying ardently. Did they ever give a thought to the hundreds of people who had to switch paths or wait till the processions were over. What does one gain by shouting at the high end of his voice amidst the already nauseating traffic. I can think of only one reason. Getting everyone’s attention. Christians were getting attention but they were losing the values for which they were known for – LOVE.

While I am trying to point out that all religions are equal and the differences among them are superficial, I am well.. ashamed to accept that there are 1001 divisions within ‘Christianity’. First there were catholics and then came protestants (They got their name as they protested against the Pope for some practices which they didn’t approve of). Then there was another 100 divisions out of the protestants alone. But why?? Well there was no obvious reason for the further partitions. It could have been just someone’s ego, or someone wanting to establish his name etc. But if they were all the same, then what could they do to differntiate themselves from their brethern. Just then some ultimately stupid person came up with the idea of differentiating through practices, appearance and what not. So they decided, ‘If those bunch of people are going to attend Sunday Masses we will do it on Saturdays’. Wow!!! and if he is going to celebrate ‘Christmas’ on Dec 25th, we won’t and we will tell everybody we meet that Christ infact wasn’t born on Dec 25th. Excellent!!! and another much more stupid person stood up and said, ‘We will make sure we make our presence felt. We will shout as much as we can, so that we get branded for it’. But the one I like most is ‘We will not wear ornaments. God in the bible had asked us to live as simple as we can’. So Strict NO to ornaments. I feel a pang of pain when people ask me which branch (read Brand) I belong to as soon as they come to know that I am a Christian.

Once I had a chance to go to a village with one of my hindu friends. When he said to the villagers I was a christian, they had this terrible look at me and moved on. Later I learnt that a few locals have been converted to Christians and together they are making a lot of mess, in the name of prayer and calling others as devils and so on. Why don’t they understand the essence of Christianity – LOVE. Those who don’t wear ornaments are prompt in accepting money/jewels when it comes to dowry. Shame on you !! and don’t fill your religion as ‘Christianity’ in any application form from now on. If there is any threat to Christianity, it is because of Christians. As Mahatma Gandhi put it, ‘ I like Christianity, but not Christians’. Christians have isolated from the core of Christianity that Christ gave them 2000 years ago and instead are forcing new rules, practices that were laid just a few years ago.

I am very much against conversions. Why the hell does anyone have to convert to Christianity? Christianity is not a religion (though it has been made one), it is just a way of life. To be honest, to be kind, to love one another is being a Christian. You need not get converted or change your name from something like ‘Tamil Mozhi’ to ‘Jasmine’ just to know about Christ or to love one another. Even when I was a high school student, I never could digest the fact that people are converting to Christianity and I have seen that those who get converted show more foolishness. They tend to call the temples and mosques as devil’s home. They won’t eat foods that have been prepared for Hindu functions and so on.

When I first met Kayar, I knew she had all the good qualities in her. So it never occurred to me that she is a Hindu and that it could be a problem for us to get married. But my parents were prompt in laying it as Rule No 1. Even Christ would not have approved of it and neither did I. But then we had to get married and they wouldn’t go ahead till she was proclaimed Christian. Damn!! It was not only cowardly on my part to ask her, but against my principles. But she proved to be not only good but logical enough. She said that it would end things smoothly and she was not going to lose anything by accepting it. Because of her, we are in good terms with our relations. But still it had caused a wound inside me and my principles. The world doesn’t need any more conversions of religions , but of minds.

In my perspective, anyone who follows the one Golden Rule alone can call himself a Christian, “Love your neighbour as you would love yourselves’. And the hard truth is there will be very few Christians in this world compared to their current 50+% population.