Monthly Archives: September 2005

Anbe Aruyirae

Surya sets again on a unique venture. If you did know that he directed ‘Kushi’, ‘Vaali’ and ‘New’, you must be well aware that he does things a bit different from others and that is what happens in ‘Anbe Aruyirae’ – referred as AA here after. The first unique thing is that the name was chosen by public. Then the fact that Surya tells the story up front even before the film begins. And that this is a unique story – not even heard about before. Throughout the film, you are reminded of the ‘Surya Style Dialogue Delivery’ that was so well accepted in ‘New’.

The story is in itself very simple. Lovers get parted due to misunderstanding and their memories unite them. It is sort of a fictious film. The usual Surya touch is there in the film, some double-meanings and some explicit scenes, that can cause your grandma to further increase wrinkles in her forehead. But it is at the right dosage. Surya in an interview did say that the heroine will be the next simran. She does really do well in expresssions department, especially in the intimate scenes, but still she has a long way to go in her dances and keep herself fit if she were to be called a ‘Simran’. The screenplay seems a bit boring sometimes, but nothing to point out in particular. Songs by Rehman are good, especially the introduction one and the one that is sung by the fictious memories. I did like the message very much that ‘Love between couples should be like that between a mother and a kid. Never do we have a feeling that we can forgot our mother and get a new one. Such should be the grit with which you much love your spouse/would-be/etc. You must never have a thought that may be if this does not work out, we have an option of quitting the relation. Overall, it is a very entertaining movie.

Rating :: 68/100

Stocks – Lesson 3

Please go through Lesson 1 and Lesson 2 before reading this.

Why would you want to know all about the Stock market? Why the hell are people desperate to understand its functioning. There is just one answer “To make money”. You and I are here to get some profit from it. If anyone wants to know the market, because he thinks it is fun, Goodbye to him. You are better served at the Casino. Stock market and trading are serious business. They are not joke or fun or something like riding a roller coaster. We are putting our hard earned money (really!?!) into this. Fine, that said we will look into the basics of trading.

The first part is to ‘Buy’. We now have a few questions ‘Which Stock?’, ‘When’ and ‘How much’. Then we need to ‘Hold’ it for a certain period of time before we ‘Sell’ it for a profit/loss. We must also know ‘When’ and ‘How much’ to sell.

Most stock market experts are dumb asses. You can take that from me. Going through the entire ‘Hindu Business’ or ‘Financial Times’ will leave you nowhere. Some are still more humerous and they just sit and watch CNBC or NDTV Money for hours together. Still worse is talking about shares during the lunch and getting free tips from your closest friend. Believe me, when it comes to stock trading all of us are dumb – in fact we are equally dumb. If your friend suggest that you must buy ‘Infosys’ and he is proved right after some time, doesn’t mean that he was an expert but that he was lucky. Then is stock market is all about luck. Is it like a game of dice. No not exactly. There are some good steps that one can follow and ensure that they make some money. But forget the advice given by any expert wearing the best blazer, stating that the market is dangerous now or that it is the best time to enter the market, etc.

First and foremost, anyone who is financially unstable should not even think about ‘Stock Market’. Just because you have some spare cash does not mean that you must enter in. You are eligible only if you have the risk capital of atleast Rs. 50,000 – 1,00,000. ‘Risk Capital’ means losing which not have an effect in your lifestyle or break your heart. If you can just spare a few thousands, (or hundreds) you can think about mutual funds. The reason is very simple. There are times when you are required to make bold decisions, and you can’t do it with your lunch-money.
With atleast 1 Lakh in hand, you will be able to take a few blows, but live to tell the tale and enter again.

Before learning ‘What to buy’ we will first see ‘How to Buy’. ‘Asset Allocation’ is the most important and the most ignored part in trading. Asset allocation means how you are going to use your 1 Lakh to buy shares. The first rule is to put not more than 5% of your capital in one trade (read Stock). However promising it might look, never break this rule. Someone who puts 100% of his capital on a trade is expected to go to NIL very soon. (Even if his success rate is 9 out of 10 times, the 10th time he will be put to NIL as he is betting all his money in every trade). Let us say that we have 1 Lakh and somehow we are bullish on Wipro. Currently it is trading at Rs 371. 5% of 1 Lakh is Rs 5000 and so we should buy just 14 shares of Wipro initially. Nothing to worry. Suppose something goes wrong and the share price of Wipro falls to 300 our loss on paper would be (371-300)*14 = 994 Rs. Much better than the 18900 we would have lost had we put the entire 1 Lakh in Wipro. Things can still get worse and Wipro can slump to 200. you get the point right. When you begin a trade put only 5% in it. Not more!!  We will see about ‘Stop Loss’ and ‘Drawdown’ in the next lesson. But for now just remember this “In the stock market, concentrate on the loss and keep them low, the gains will take care of themselves”.

Stocks – Lesson 2

As we saw in Lesson No. 1, shares that are initially launched as IPOs eventually find their way to the secondary market (the BSE or the NSE). It is like an auction place for the shares, those who have the shares tell an ‘ask’ price at which they will sell the share and those who want it will have a ‘bid’ price at which they would like to buy the share.

If you had happened to see some news clips, you can find the BSE something like a local fish market with everyone yelling and running around. Why can’t they all sit in their places while the buy/sell takes place. It is because of the bid and ask differences. Why is there so much noise in a fish market? Because there is some bargaining and profits to be had. That is why the sellers shout their prices to attract the prospective buyers and the buyers bargain with more than one seller. Almost the same happens at the stock market. There are ‘ask’ers shouting their price and ‘bid’ders shouting theirs. For example a broker there might shout “I will sell 100 Infosys at Rs 1000” or something like that. Since huge money is involved you can see people running and shouting like maniacs in the BSE located at Dallal Street, Mumbai.

What would happen if we all were to go to BSE to shout our way to wealth. Not likely Right? and it would be a hell of a lot of work to do understanding a lot of rules and regulations along the way. So SEBI (Security and Exchange Board of India) have laid some rules governing all this and there are special tests to be passed to become a broker at BSE/NSE. These brokers will act on behalf of us and sell/buy whatever we tell them, Of course for a small comission. If you find this too a tedious process, you can go for an online broker like ICICIDirect, ShareKhan, Kotakstreet, Indiabulls etc. Then you can trade from the convenience of your home with a computer hooked to internet. We will see this in detail in later lessons.

Fine, so that is how there came to be so many shares of companies being traded everyday at both BSE and NSE. And you can buy any number of shares (on the bid price) of any company listed in the BSE or NSE, provided you have the money and the same holds for selling (on the ask price). Now let us come to a few terms that have pestered our minds for long.

‘Sensex’ – The whole concept lies behind the buy and sell in the BSE. Say we need to track whether there were more ‘buy’s or more ‘sells’ on a particular day. Again there might be 100 ‘buy’s of Rs 10 each and 1 buy of Rs 1000. So the point is to consider the actual price movement alone, i.e if ROHG was at 75 the previous day and is now at 78, it is +2 and the same goes for other companies. Finally Sum of all price action will give you a  +n (n points more) or a  -n (n points below) for the market as a whole on the day (compared to the previous day). But instead of considering all the companies whose shares make the BSE, SEBI considers only 30 stocks whose price action is alone considered in calculating sensex. So in rough terms Sensex = Previous day Sensex + Sum of the price difference of the 30 stocks compared to their previous day. But beware this is a very generic and simplified explanation. So when we say that Sensex is up 100 points, it means that there were more buys that day and that the stock prices have increased on a whole that day.

‘Nifty’ – A benchmark for NSE considering 50 stocks trading at NSE (Same function as that of Sensex for BSE).

‘Stocks and Shares’ – Stock usually refers to a collection of shares. So you can say “I was given a stock option of Infosys consisting of 100 shares”. My portfolio has stocks of IBM, Infosys and TCS.

‘Bull Market’ – When the Sensex (or Nifty) rises consistently for a prolonged period of time, the phase is said to be the ‘Bull Market’. There are huge ‘buy’s and people are happy with the prices raising. Bulls are those who expect the market to be bullish.

‘Bear Market’ – When the Sensex falls and stays at the same level for an extended period of time, the market is said to be bearish. Bears are those who are always negative about the market and expect it to fall down. Whenever there is an economic crisis (Political reasons too like NDA Govt’s failure), the market crashes (Sensex falls heavily) and it enters the bear market.

‘Correction’ – When the market is on a bull run, there is a phase when some of the traders (some of us), decide to sell our shares and make a profit. This causes a slight dent in the bull run and is known as the correction, but then usually the bull run continues again.

‘Porfolio’ – A collection of Stock (shares of many companies). For eg if I have 100 shares of Infosys, 50 shares of Wipro and 120 shares of ITC, then my portfolio would look like
Infosys – 100 shares – Net profit/loss at current price = 12000 Rs
Wipro – 50 shares –  Net profit/loss at current price = 5600 Rs
ITC – 120 shares –  Net profit/loss at current price = -7520 Rs

‘Paper Gain/Loss’ – The gain or loss of our stocks/portfolio if we sell the stock/entire portfolio at the current market price. It is the difference between the purchase and current market price. When we say that our paper gain in Infosys is 12000, it means that if we sell now we will gain 12000 from the trade (buy/sell) and the same is true when we say that we have a paper loss of 7520 in ITC.

‘Actual Gain/Loss’ – When we actually sell the shares/stocks in portfolio the loss or gain that we get is termed as actual loss/gain unlike the paper loss/gain which is just notianal. So if we have a paper gain and we don’t sell but keep it till the price falls below the purchase price, we have a paper loss and if we sell then we will get the actual loss.

Check Mate

After a looooooong gap, I had the chance to participate in a Chess tournament conducted as part of the annual day celebrations at Broadcom. I participated only in Chess as it would be conducted only in weekdays and not in weekends when I would be in Pondicherry. 16 players had given their names including me.

In the first round, I was up against Ramki. We tossed and he got white. He is a senior manager and was also playing really well. The game was getting ready for a nail-biting finish when he received calls for a meeting. That did have some effect in his play and he made a blunder wihch cost the match and he resigned. We played the regular e4 opening and he even attacked my 0-0 castled king.

In the second round I had to play against Ananthan and there was no air of tension as he was very amiable and much against the norms of chess, we did have a few chat during the play. We also played the game in the crowded Library which eased the tension further. He played some decent chess, but he went on to sacrifice his bishop for which I could not see any advantage. I took it and forced his resignation very soon. I was playing white as ananthan was brave enough to ask me choose my color.

The semi finals was against M.P.Reddy and this time we tossed and I got white and resumed my favourite e4. The game was poised on equal terms when he made a blunder and thinking that my queen was unprotected against his he took a pawn with a bishop. I removed the bishop and he realized that he had lost the bishop as my queen was protected by a knight. From then on I easily forced his resignation.

The other semi final match was between Dhanraja and Baskar and Danraja was easily the better of the two and eventually won the game. The finals was on 2nd September and Danraja and I sat down to play the game at 1.10 P.M We tossed and I got white. I opened e4 and he replied with e5 and it was a closed Giucco Piano (I played d3 and ensured a closed position). We exchanged queens the result of which I had a doubled pawn on f file. Then the game went on as we exchanged pieces and pawns. But he made a mistake and lost a pawn which resulted in a passed pawn for me, which I threatened to make a queen. After two hours of tough play he resigned. (initially it was agreed as 1.5 hrs with 15 minutes stop watch after that, but after an hour’s play I asked his permission for a 2 hour game and then a stop watch of 15 mins if required and he agreed). I was happy that I could pull it off. It was a sweet victory after many years. Also in the annual day report they had written “CHESS – Helped discover the shelved brains of a few in BRCM. Only singles event to get a BSE guy as a winner – Hail Simon Peter”. What more when I wen to the lab, people referred me as Broadcom Grandmaster and the HR too said that I was the Chess Champion.

Round 1:

   1. Sumeet Sinha Vs Vijay Ananthan (9th Aug)
   2. Ramki (Ramakrishnan) Lakshman Vs Simon Peter (10th Aug)
   3. Srinivasa M.P.R Vs Kishore Sriadibhatla (9th Aug)
   4. Rangarajan K Vs Magilarasan (8th Aug)
   5. Rajesh Natarajan Vs Dhanraja K (8th Aug)
   6. Vikas Agarwal Vs Arun G (10th Aug)
   7. Madhva Anandhamoorthy Vs Arul T (9th Aug)
   8. Mala Baskar Sherigar Vs Naveen Raina (8th Aug)

Round 2:

   1. Vijay Ananthan Vs Simon Peter (11th Aug)
   2. Srinivasa M.P.R Vs Rangarajan K (11th Aug)
   3. Dhanraja K Vs Vikas Agarwal (11th Aug)
   4. Madhva Anandhamoorthy Vs Mala Baskar Sherigar (11th Aug)


   1. Simon Peter Vs Srinivasa M.P.R (18th Aug)
   2. Dhanraja K Vs Mala Baskar Sherigar (31st Aug)


      Simon Peter Vs Dhanraja K

I was awarded 1500 Rs Worth Gift Voucher from Sodexho Pass. That is really wonderful !!