Stocks
Ace stock-picker Vijay Kedia gives stock lessons
Vijay Kedia took the audience through his fascinating and inspiring journey as an investor at a Moneylife Investors Club seminar held at the iconic BSE International Convention Hall in Mumbai. The seminar “My Investment Journey So Far & What I learnt from my failures” was sponsored by BSE Investors' Protection Fund.  
 
Shankar Jadhav, Head - Strategy at BSE, in his introduction to the seminar said 'We want investors to be aware.'
 
Mr Kedia who is a very suceessful private investor in his own right, narrated a number of poignant experiences from his personal and professional life that have made him the stellar wealth creator that he currently is. These include childhood experiences involving perseverance to join NCC to many failures in stock trading over the first 10 years of his life and fascinating experiences in the later stages of life as an investor. 
 
The stock wizard who has picked up a number of multi-baggers over the years said that his present situation is based on whatever he could learn and adapt from his failures. A number of times in his life, he had to start from zero. He listed a number of events where he failed and the lessons learnt from them. Vijay Kedia said that these experiences have made him rich and led him to become a smarter person. 
 
Very few people would know that this extraordinary wealth-creator had actually quit the stock-market and started supplying materials to tea gardens. He came back into the stock markets again and again and started to acquire knowledge about the stock and investing process. He started following succesful investors in the market and reading about companies. He believes that 'Passion is a greater force than luck.'
 
 
Many people were not very keen on providing knowledge during those days. Vijay Kedia said, ' I tried to read in between the lines in order to learn why investors were buying a particular stock.' He remarked, ' When it comes to stock markets, mental capacity is more important than financial capacity.'
 
Highlighting the importance of experiencing a bear market for an investor, he remarked, “If you have not faced a bear market, you are not a seasoned investor yet.” He went on to explain his strategies behind an enviable list of multi-baggers including Aegis Logistics, Mico, Atul Auto and Cera Sanitaryware.
 
'Knowledge, courage and patience are critical if you want to invest in stock markets,' said Mr Kedia.
 
The session ended with an insightful Q & A session. 
 
Questions covering diverse topics including management quality, ideal size of portfolio and high PE stocks were covered. Highlighting the importance of being well informed for an investor, he said, 'Your job is to read, read and read.'
 
This was the 6th Investor Club event. The previous events can be accessed here: https://savers.moneylife.in/icvideos/ 
 

 

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COMMENTS

Harjeev Singh Chadha

5 months ago

waiting for the video to come out. Any idea when it'll be released and available for purchase?

Rishabh Adukia

5 months ago

The videos must be available free of cost, specially when its funded under investor protection fund. this is the money of investors

Bhavesh Rakhasia

5 months ago

Its was indeed great to listen to Vijay Kedia share his life journey in Stock market. All the difficulties he faced, learnings from his failures and his investment philosophy. It has cleared my mind and make me understood what mistakes i should not commit in Stock Market as a young investor.

Ameet Patel decodes capital gains at Moneylife Foundation seminar
Capital gains can be extremely confusing for an average taxpayer. Different rules and tax rates apply for different assets and there are other complexities such as indexation, and exemptions. Chartered Account (CA) Ameet Patel simplified the computation of capital gains to an audience at the Moneylife Foundation seminar sponsored by Capital First. Mr Patel, former president of the Bombay Chartered Accountants Society (BCAS), also answers tax related queries on Moneylife Foundation’s Tax Helpline on a voluntary basis. 
 
CA Patel commenced the session by defining a capital asset. “A capital asset may be a short term or long term depending upon the period for which the asset is held. This can be confusing for an average taxpayer as there are different periods for different assets for defining whether it is a short-term asset or a long-term asset. For instance, in case of shares of unlisted company, if the holding period does not exceed 24 months then it is a short-term asset. However, for shares held in recognised stock exchange in India, the period is merely 12 months,” he said. 
 
 
He went on to explain that indexation benefit is given while computing long-term capital gains (LTCG) in order to ease the burden of inflation. In order to dispel any confusion among the audience, Mr Patel illustrated the computation of capital gains with numerical examples showing both the options – with indexation and without indexation. 
 
Certain taxpayers may end up paying excess tax without knowledge of a number of exemptions available under the Income Tax Act. Section 54 is one of the most important sections for saving tax arising from capital gains on sale of residential property. CA Patel explained the conditions under which this exemption can be claimed. Section 54EC is another important provision, where long term capital gains can be invested in specified bonds in order to claim exemption. However, he highlighted that Rs50 lakhs is the upper limit while claiming exemption under Section 54EC.
 
Those who invest a lot in shares should know what expenses are allowed as a deduction while computing capital gains on sale or purchase of shares. Securities Transaction Tax (STT) is not allowed as an expense, while expenses like brokerage, service tax, stamp duty are allowed, he said. 
 
“A significant number of taxpayers don't maintain proper documents,” said Mr Patel. This leads to a number of problems as proof is required in law if there is a scrutiny. Maintaining documents related with immovable property (even old documents) is extremely critical. While buying or selling immovable property, it is important to take a receipt for brokerage paid to real estate agents in order to prevent disallowance of expenditure. 
 
Mr Patel said, Section 50C of the Income Tax Act is also extremely critical. If the value stated in an instrument of transfer is less than the value adopted by stamp duty authorities, then stamp duty value is considered for the purpose of computation of capital gains on land or building. For instance, if an agreement states that the valuation of a flat is Rs30 lakhs, but stamp duty authorities value it at Rs40 lakhs, then stamp duty value (Rs40 lakh) will be considered for the purpose of computation of capital gains. This will lead to higher capital gains on the transfer.
 
Mr Patel ended the session advising taxpayers to comply with income tax provisions as information related to high value financial transactions is disclosed in the Annual Information Return (AIR). 
 
He patiently answered a number of questions posed by an eager and inquisitive audience. The questions covered issues like number of years for which records need to be maintained, income tax refunds and income tax return (ITR) forms for different categories of taxpayers. There were a number of queries related to capital gains on sale of immovable property covering issues like the date on which capital asset is purchased and the period for which indexation benefit is available.  

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COMMENTS

sandeep shet

5 months ago

Hi, I have one question. If you own listed shares of a foreign company, which is listed outside india, what is the time limit for it to be long term? Will it still be one year or three years?

Nifty, Sensex to move sideways – Weekly closing report
We had mentioned in last week’s closing report that Nifty, Sensex were trendless. The major indices of the Indian stock markets were range-bound initially this week and suffered a sharp correction on Friday to close around 1% lower following a huge decline on Friday with the exit of Britain from the European Union. The trends of major indices in the course of the week’s trading are given in the table below:
 
 
Higher global markets and a healthy rise in global crude oil prices, and the strong trend in US premarket futures lifted the key equity indices on Monday. The markets opened low prompted by news of Reserve Bank of India (RBI) Governor Raghurram Rajan formally declining a second term. However, healthy buying in automobile, IT (information technology) and capital goods stocks helped pare initial losses.  There were major upcoming global event risks such as referendum in Britain on whether or not to stay as a part of the European Union (EU). Further, investors have been concerned about the US Federal Reserve Chairwoman Janet Yellen's testimony to the US Congress. Value buying after the initial downslide lifted prices. Besides, higher Asian and European markets buoyed domestic key indices. 
 
In addition, an appreciation in rupee's value after it fell to a low of 67.70 restored investors' risk taking appetite. The Indian rupee opened on a weak note as investors reacted to the news on Rajan's exit. It touched a low of 67.70 against a US dollar, but sales by exporters and sovereign intervention pushed it back below 67.40 levels on spot. IT and pharma sector stocks traded firm on continuous buying support, while banking stocks also traded with sideways to firm sentiments.
 
Profit booking, combined with negative global cues and a weak rupee, subdued the Indian equity markets on Tuesday resulting in the key indices trading marginally in the red during the mid-afternoon session with selling pressure witnessed in banking, consumer durables and capital goods stocks. The Asian markets gained on the back of increased chances of Britain staying on in the Eurozone. The island nation was to go in for a referendum on this on Thursday. However, profit booking, consolidation and negative European markets dragged the key domestic indices lower. Further, investors were seen concerned about US Federal Reserve Chairperson Janet Yellen's testimony to the US Congress. In its two-day policy meet last week, the US FOMC (Federal Open Market Committee) decided to maintain its key lending rates. The US Fed signalled its intention to limit the times it might increase key lending rates due to weak domestic jobs market. A hike in the US interest rates could potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India. Besides, lower global crude oil prices and a weak rupee eroded investors' risk-taking appetite.
 
Uncertain global situation, profit booking and a weak rupee depressed the Indian equity markets on Wednesday, as selling was witnessed in automobile, capital goods and FMCG (fast moving consumer goods) stocks. The BSE market breadth was skewed in favour of the bears -- with 1,597 declines and 988 advances. Initially, the key indices opened positive as investors believed that Britain's upcoming referendum on whether or not to stay on in the European Union would go in favour of staying with EU. India's cabinet on Wednesday cleared the base price for the country's largest spectrum auction to date, expected to fetch around $85 billion at the approved reserve price, address the menace of mobile phone call drops and give a push to 4G data communications. The approval was given at a meeting of the cabinet chaired by Prime Minister Narendra Modi.
 
On Thursday, both the key indices opened on a flat-to-positive note, in-sync with their Asian peers, as investors were seen optimistic that Britain would stay on in the European Union. Increased chances of Britain staying on in the European Union, combined with higher crude oil prices and a strong rupee, buoyed the Indian equity markets. The key indices closed the day's trade with appreciable gains, as healthy buying was witnessed in banking, automobile and healthcare stocks. The Indian rupee strengthened by 23 paise during the day's trade. It closed at 67.25-26 against a US dollar from its previous close of 67.48-49 to a greenback.
 
In a stunning reversal of what was widely expected, Britain on Friday decided to exit the European Union (EU), rattling global financial markets. Prime Minister David Cameron, who had strongly backed the "Remain" vote, said he was quitting. Britain's decision to opt out of the European Union (Brexit) rattled Indian financial markets on Friday, while pulling the rupee to around Rs68 to a US dollar. At one time, the Sensex was down by over 1,000 points but closed down 604 points. The pound sterling fell to its lowest level against the US dollar in 30 years -- and the euro was down by under 3% -- as the result of Thursday's historic referendum that ended Britain's 43-year association with the EU. England and Wales voted strongly to exit while Scotland and Northern Ireland backed the "Remain" vote. UK Independence Party leader Nigel Farage, who had been campaigning for 20 long years to dump the EU, called the Friday result UK's "Independence Day". The result was a narrow affair: 51.9% vote for Brexit against 48.1% vote for 'Remain'. Nikkei fell by 7.92%, Hang Seng by 2.92% and DAX was down 7% at the time of writing. FTSE was down 4.4% while IBEX of Spain was down by over 12 %. Gold was up by almost 5% while crude oil fell by almost 4%. We expect the Indian market to move sideways. 

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