Nifty below 10,000 mark

Blog meant for 26 March 2018 Monday

Dear friends,

As mentioned in the previous blog post on Thursday night, Nifty fell and closed below the 10,000 mark on Friday. Nifty ended at 9998.
The fall was mainly due to the actions that US President Trump is planning to take on Chinese imports into the US. The US Government is planning to impose higher import duty on Chinese goods and China is planning to do the same for US goods into China.

This has lead to lot of uncertainty and tension in all markets including ours since such actions not only affect particular countries but also many other major countries in the world such as India.

However, even without such news, markets were anyway weak and bound to fall due to the general downtrend. This is part of the stock market cycle of going up for around 7-8 years and falling for some years and then once again picking up. This is normal and nothing new.

As investors, we just need to buy good companies for long term on a regular basis and hold them for some years and we can be quite sure of good profits. The only two mistakes that most investors do is to buy worthless/bad companies and then hold for some years and when they make huge losses, get impatient and realise their mistake and sell at a loss.

The other mistake is that they buy good companies which are performing well in terms of their business profits etc but do not have the patience or guts to to hold them when there is lot of volatility in the markets such as now and sell very early without realising the true potential of the business and the stocks.

Such situations and the coming months will be a test of how mature your thinking is with regards to stock markets. If you pass the test by acting sensibly and not panicking, you will be able to earn good profits in long term. If you panic and sell by worrying whats going to happen in the next few months, then you will permanently lose the opportunity to make long term profits from stock markets.
You can see how stock prices fell during 2008-09 during global financial crisis and how they later picked up after some years. The markets are behaving similarly currently right now and this was expected.

Nifty is in Don’t Buy zone for short term

The indications for individual stocks for short term are –




There are no fresh buy indications for short term as of now. Just observe markets.

Only buy for long term regularly and hold for long term. As markets fall further, you can continue to buy for long term but only bluechip stocks.


Question of the Day – 

I have been introduced to X Investment Company which is promising 12 % returns per month. They trade on behalf of us in various instruments and take risk. We are assured 12% per month profits on our investment. Can we go ahead and invest in such companies/instruments?

Answer – 

This is a very important answer and must definitely be understood very clearly by all investors.

You must have heard or read in the news about Rahul Dravid, the great batsman losing a huge amount of money due to a fraud by a company in which he and his family had invested. He and his family have supposedly lost around Rs.4 crores or more in an investment made in an investment company.

This investment company had promised investors 5-10% per month returns on their invested amount. With similar terms of conditions of giving high monthly returns, they had raised money from a large number of people in India and abroad including many celebrities such as Rahul Dravid.

The media and the general public are blaming the investment company for not delivering on their promises of returns and in fact not returning the principal amount invested itself.

However, before we can blame the investment company and its founders, we need to first take blame ourselves.

When any instrument or business is ‘assuring’ monthly returns of 5-10%, then it means that the yearly returns work out to about 60-120%. Business people will realise and agree that such profits are not possible for any business however good and well managed it is and whichever sector it may belong to.

Leading companies in the world usually make anywhere between 10-40% per annum profits on their capital which is itself a huge profit. The common percentage of profit is around 10-20% per annum. These profits are achieved by the efforts of many employees and the effective use of technology.

Hence, when any person/company claims to assure/promise you fixed 5-10% per month returns, it should definitely give us a ‘warning signal’ in our mind about whether this is possible and whether this can be sustained every month and for how long term.

Although, these kind of returns looks almost impossible and most investors will not believe its true, the ‘greed’ in us to make ‘quick profits’ makes us believe whatever the agent/investment company is telling us. We realise that this is a wrong decision only after we loss our hard earned money and then we start blaming the entire world for this loss.

Usually these kind of schemes are called ‘Ponzi schemes.’

Modus operandi – investment company collects money from innocent investors by promising very high returns. Once a decent amount is collected, it does not actually invest the collected money in any instrument. The company pays returns to investors from the money which it collects from new investors and also from the principal amount.

For example, Investment Company X collects Rs.10 lakhs from 5 investors, A, B, C, D & E. It claims to provide 8% per month returns on their investments.

For the first 3-4 months, Company X gives returns to the 5 investors from the collected principal amount of Rs.50 lakhs. Once the investors became confident of Company X, they tell their friends to also invest in Company X. The investors also put more of their money as investment in Company X with the hope of making good monthly profits.

Slowly over a period of time, more investors join the Company and it becomes very well know. Existing investors give very good feedback about the company. The Company X continues to give good returns as promised as long as new investors join the Company with more investors.

The moment new investors stop investing in Company X due to small problems and doubt in their minds, then Company X can no longer provide returns nor return the capital amount to existing investors since it has not actually invested in any instrument and it has only been ‘circulating’ the money between investors. Also, in the meanwhile, the promoters of the Company X may have withdrawn lot of money for their personal use and the thereby major portion of the investors’ capital is not available to be returned to invested.

At such times, we hear in the news that some Investment company has cheated hundreds of investors. Stock Market investments also get a bad name during such times since the Company had claimed that it had invested in Stock Markets, Commodities Markets, Forex etc.

In fact, most times, such companies never invest in any company at all and may only be circulating money.

Although, all such investments may not be ‘Ponzi schemes,’ companies which claim high guaranteed returns are usually one of these –

  1. Ponzi schemes (as explained above)

  2. Investing in Commodities, Forex, Futures & Options which are highly risky and volatile instruments and no guaranteed returns can be assured and paid

  3. Investing in other instruments such as Real Estate, investing in New companies etc.

In option 2 & 3 option, since there is high risk, monthly returns cannot be guaranteed and also usually not possible. Also, continuos high returns such as 5-10% per month claimed by such companies are not sustainable.

We urge investors to be careful before investing in any instrument. Adequate research and study must be done before considering any investment.

Also, do not blame anybody for your loss in any investment. Most times we commit the mistakes which are avoidable and we are not forced by anybody to invest anywhere.

Develop a scientific bent of mind so that you will invest in only the right investment by taking calculated risks and not blindly believing what our friends/relatives or agents say.

Better to be safe than sorry!


All the best!

Dr.Bharath Chandra and Rohan

Please do not comment on the blog. Any questions or clarifications can be asked by sending us an email with your registration number given to you during the Workshop. Questions without quoting registration number will not be answered.

(The above comments are only the personal views of the authors of this blog. Please do your own research before taking any investment decisions. The reader of this blog must understand and take full responsibility for the Profit or Loss made by taking actions based on the above views)


About the author

Dr. Bharath Chandra

Hi there! This is Dr. Bharath Chandra & Rohan, International Trainers & Success Coaches. We have addressed more than a crore people on Stock Market, Personality Development, Wealth Management and Financial Planning over the past 35 years.

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