Poornatha 1

KA

Poornatha 2
NSDL Social Media Presence

3
Disclaimer

This is an awareness program for educational purposes only.

We teach based on the first principle basis through examples.

Stocks, Companies, brokers and Mutual funds used in this

program are for informational purposes, not a buy or sell
recommendation.

Investments in securities are subjected to market risk, past

performance doesn’t guarantee future returns.

Investors are requested to do thorough research or consult a

SEBI registered investment advisor before making investment
decisions.
Poornatha 4
 What to expect from this session?

First things First Know the market

• Types of income
• Inflation and its impact
• Types of investment
Principle of Principal
• Primary and secondary market
• How to buy shares – DEMAT
account
• Understanding stock market
Numbers rule the universe

• Start Early- Power of • Trading vs Investing

Compounding • Technical vs Fundamental analysis
• Spread wide • Who is an investment expert
• Stay long • How to plan your budget

Poornatha 5
Why do you want to be a crorepati?

• To live life king size/To live to the

fullest

• To have a world tour with

family/friends

• To earn and save money for

retirement

• I don’t want to be a crorepati

Poornatha 6
Section: 1 3 I’s to understand how to become
a crorepati

MARKET KA EKLAVYA

3 I ‘s

Income Inflation Investment

Poornatha 7
1ST I

Income

Poornatha 8
 Two sources of Income

Active Income Passive Income

(Primary Income) (Secondary Income)

You work for Money Money works for You

Poornatha 9
 Two sources of Income

Active Income Passive Income

(Primary Income) (Secondary Income)

Return on investment Appreciation

of capital

Salary / wages Interest Rise in investments

market price

Business profits
Rental income

Professional Fees
Dividends
Poornatha 10
Activity एक्टिवििी

Poornatha 11
 How to use Annotate
Mobile Laptop/PC

Poornatha 12
Annotate
Match the following with the right income
Business profits

Interest Active Income

(Primary Income)
Salary / Wages

Capital appreciation

Dividend
Passive Income
House rent (Secondary Income)

Poornatha 13
• Ants worked hard during spring season to
save for winter
• On the another hand, grasshopper spent the
whole time playing around without thinking
about winter days

Poornatha 14
• During winter, ants had shelter and food to
survive
• But, the grasshopper starved for food and
had no shelter

Poornatha 15
Active income

Passive income

Is active income enough to meet

all your future expenses?
Be like an 'Ant’
Start saving for a secure future
Poornatha 16
How to build Passive income?
Passive Income

Investing

Saving

Budgeting

Active income Poornatha 17

 2nd I

Inflation

Poornatha 18
 • Inflation is the rate of increase in prices
over a given period of time
• Because of inflation, the value of money
diminishes with time
• We have to spend more money to purchase
the same product

1980 12

2021 2
“Erosion in value of Rs.100 over year is called inflation”

Poornatha 19
 Inflation

• Regular rise in the prices of goods and services

such as food, clothing, housing, transport, etc.

• It takes more money to buy the same amount of

goods and services than it did in the past

Poornatha 20
How can we protect ourselves
against inflation?

Savings alone will not help us

You must invest that saving in different types

of investments

Poornatha 21
 3rd I

Investment

Poornatha 22
Activity एक्टिवििी

Poornatha 23
 Annotate
Match the following with the right type of investment

Mutual Funds Physical Assets

Fixed deposits

Gold, Silver, Precious metals

Fixed income

Government bonds

Stock / Shares
Capital Markets

Land & Building

Poornatha 24
 Types of investment

Physical Assets Fixed income Capital Markets

Gold, Silver, Fixed deposits Stock / Shares

Precious metals

Public Provident Debentures

Land & Building Fund

Savings account Mutual Funds

Government
Poornatha bonds 25
 Types of investment

Physical Assets Fixed income Capital Markets

• Physical thing that you • Regular earnings • Buying and selling

can touch of shares
• Physical presence • Provides same returns
despite inflation/ other
factors

Poornatha 26
Parameters to choose an investment

Return Risk
Money that we get back on our Probability that our investment
investment decision might go wrong

Liquidity Tax
Ability to quickly convert to cash The money we pay to the
without loss in value government

Poornatha 27
What will happen if you don’t invest?

• You will be victims of inflation

• You have to rely only on one source of income

(active income)

• If anything happens to the active income source,

you (your family) will not have any alternate
source of income

Poornatha 28
Section: 2
3 S of investment

• Start early – Invest as soon as you

can

• Spread wide – Diversify your

investments

• Stay long – Invest for the long term

Poornatha 29
 1st S-
Start early
–
Invest as soon as you
can

Poornatha 30
Warren Buffet is one of the most successful investors
with net worth over $105 Billion
Poornatha 31
 Nisha and Vinay are college friends

Nisha Vinay

Starts investing Starts investing

₹1000 per month ₹2000 per month
from the age of from the age of
25 35

Assuming average return of 12% per annum

for both Nisha and Vinay

Who will be richer when they are 50 years old?

Poornatha 32
 Nisha

Nisha Vinay

Total money invested Rs. 3 lakhs Rs. 3.60 lakhs

Value of investment
Rs. 18.78 lakhs Rs. 9.99 lakhs
at age 50

Difference: 8.79 lakhs

Assuming average return of 12% per annum for both Nisha and Vinay
Poornatha 33
How did this happen?

• By starting early, Nisha took advantage

of the power of compounding

• Compounding is earning income on your

principal investment
plus

• Interest on interest/ return on return

Poornatha 34
• King Indhra Verma once asked his kingdom to come
up with a new game and reward them as they wish

• Bheem came up with the game of chess

Poornatha 35
• Indhra Verma was impressed by the game and asked for the reward
he wished
• The reward was to place one grain of rice in the first square of
the board and double it for every next square

Poornatha 36
Square Number of grains Square Number of grains Square Number of grains

1 22 43 43,98,04,65,11,104
1 20,97,152 64 92,23,37,20,36,85,47,80,000
2 23 44 87,96,09,30,22,208
2 41,94,304 By 56th square, the grains would
3
4
24
83,88,608 45 1,75,92,18,60,44,416 add up to 756 million tonnes
4 25
8 1,67,77,216 46 3,51,84,37,20,88,832
5
16
26
3,35,54,432 47 7,03,68,74,41,77,664 The world rice production in 2017
6
32
27 48 14,07,37,48,83,55,328
was 769.7 million metric tonnes
6,71,08,864
7 28 49 28,14,74,97,67,10,656
64 13,42,17,728
8
Therefore, by the 57th square, the
29 50 56,29,49,95,34,21,312
128 26,84,35,456
world will run of grains
9 30 51 1,12,58,99,90,68,42,620
256 53,68,70,912
10 31 52 2,25,17,99,81,36,85,250
512 1,07,37,41,824
11 32 53 4,50,35,99,62,73,70,500
1,024 2,14,74,83,648
12 33 54 9,00,71,99,25,47,40,990
2,048 4,29,49,67,296
13 34 55 18,01,43,98,50,94,82,000
4,096 8,58,99,34,592
14 35 56 36,02,87,97,01,89,64,000
8,192 17,17,98,69,184
15 36 57 72,05,75,94,03,79,27,900
16,384 34,35,97,38,368
16 37 58 1,44,11,51,88,07,58,56,000
32,768 68,71,94,76,736
17 38 59 2,88,23,03,76,15,17,12,000
65,536 1,37,43,89,53,472
18 39 60 5,76,46,07,52,30,34,23,000
1,31,072 2,74,87,79,06,944
19 40 61 11,52,92,15,04,60,68,50,000
2,62,144 5,49,75,58,13,888
20 41 62 23,05,84,30,09,21,36,90,000
5,24,288 10,99,51,16,27,776 37
Poornatha
21 42 63 46,11,68,60,18,42,73,90,000
10,48,576 21,99,02,32,55,552
 Section: II

2nd S-
Spread wide
Diversify your investments

Poornatha 38
• Benjamin Graham is the "father of value investing”

• He is the mentor/guru of Warren Buffet

Poornatha 39
 Example
• Nihal and Manoj are farmers

• Nihal plants only tomatoes

• Manoj plants tomatoes, onions and

radish

• Tomatoes were infected by insects

and the crop was damaged, but
nothing happened to onions and
radish

Poornatha 40
Examples of intercropping in vegetables followed at different part of India | Download Table (researchgate.net)
 What happened?

• Planting variety of crops ensured

that Manoj didn’t suffer complete
loss

• While Nihal lost everything

Therefore, in investment it is not

about choosing one type of
investment but rather a combination
of investments that work for you

Poornatha 41
 Don’t Invest all your money in

One type of investment One Sector / Industry One Company’s shares

(Gold, Land, FD, Stock, MF)
Banking, IT, Automobile etc RIL, HDFC, TCS etc

Poornatha 42
 3rd S-
Stay long
–
Invest for the long term

Poornatha 43
Poornatha 44
 How to overcome loses?
• Stock market undergoes various volatility(2008 crisis,
COVID) which affects the market price of a company
having no connection with actual company performance

• Long-term investor is not affected by these short-term

fluctuations
• Diversified investments helps in limiting the loses
incurred due to short term fluctuations

Poornatha 45
Even the worst stock market fall of 2008/2009 recovered in 2.8 years

Poornatha 46
Section: 3 IPO buzz
(Initial Public Offering)

Poornatha 47
 What is all this IPO buzz about?

Let's understand through an example

Poornatha 48
• ABC is a popular burger chain restaurant

• Due to its nation-wide popularity and

increasing demand, it wants to expand
internationally

• They do not have sufficient funds and want to

raise it externally

Poornatha 49
• ABC decided to raise money from general public

Primary market

Poornatha 50
• ABC decided to raise money from general public
• In return, it offered public to become part owners of
the company

Primary market

Poornatha 51
But, how do the part owners get returns?

• Through capital appreciation

• Getting dividends, bonus, rights issues

Poornatha 52
 Primary market

• Company raises money from the general

public

• It allows general public to become part

owners of the company (shareholders)

Poornatha 53
How much does Jeff Bezos
own in Amazon.com?

1) 100%
2) 51% or higher
3) Less than 20% ✅
4) Uh! no idea

He owns only 10.3% of

Amazon

Poornatha 54
What if one of the part owner
want to sell their shares?

Poornatha 55
• Manish, one of the owners wants money for his higher education

Primary market

Poornatha 56
• Manish, one of the owners wants money for his higher education
• He decided to sell his ownership in ABC co. to another person

Primary market

Poornatha 57
• Manish, one of the owners wants money for his higher education
• He decided to sell his ownership in ABC co. to another person
• He receives the money from selling his ownership
Primary market

Secondary market

Poornatha 58
 Secondary market

• Already existing shares are traded

among investors

• Investors (shareholders) buy and sell

shares that they already own

Poornatha 59
 Can we buy/sell shares in
these markets directly from
the company?

No
You need 3 essentials accounts
to buy/sell shares in the market

Poornatha 60
Section: 4

Essentials to invest in shares

You need 3 accounts

Savings account Broking account Demat account

Poornatha 61
Savings account Broking account Demat account

Transfer money

• To be opened with a bank

• Used to transfer money to buy shares

Poornatha 62
Features:

Zero balance Instant activation

up to 5% Interest* Virtual debit card

Poornatha 63
Apply here: https://nsdlbank.com/
Savings account Broking account Demat account

Buy and sell orders

• To be opened with a
stockbroker

• Used to buy or sell shares

(to place orders)

Poornatha 64
Savings account Broking account Demat account

• To be opened with NSDL

• Used to store shares safely in electronic

form

Poornatha 65
 Then Now
Physical Share certificate Demat share

Share certificate-Certificate of Electronic register of shares

ownership

Poornatha 66
Section: 5 What is Stock market?

Let’s understand stock market with the help of vegetable market

Buying and selling of Buying and selling

vegetables of stocks

© Poornatha 67
Farmer Vendor/ Market Buyer

Warehouse
© Poornatha 68
Farmer
= Company

Market / Vendor
= Stock exchange &
Broker

Buyer = Investor/Trader

Vegetables = Shares

Warehouse = Depositories
© Poornatha 69
 We know we can buy/sell shares from
wherever we want
But
Can we buy/sell shares whenever we want?

© Poornatha 70
When can we buy/sell shares?

Pre market hours 9 AM – 9.15 AM

Market Start time 9.15 AM

Market end time 3.30 PM

Market days Monday – Friday

71
© Poornatha
Section: 6

© Poornatha 72
 Stock Market

Trading Investing

Active Speculator Active Passive

© Poornatha 73
• Sita is a stock market analyst

• She regularly collects news on companies and markets

• She knows risk management and makes her buy and sell decision
based on technical analysis tools and daily price movements

Is Sita a/an,

Active trader Speculator Active investor Passive investor

© Poornatha 74
• Kunal is a finance expert and he does extensive research
• He understands what is stock market and how it works
• He utilizes his time in reading about markets, annual report of
companies to know the fundamentals
• He wants to create wealth

Is Kunal a/an,

Active trader Speculator Active investor Passive investor

© Poornatha 75
Do you think is there any difference between
trader and investor?

Yes or no

Yes!! There is a difference

The main difference is that,

1) Trading is for short term
2) Investing is for long term

© Poornatha 76
• Disha has a full-time job, and she believes in long-term wealth
creation
• She doesn’t have expertise in stock market
• So, she buys mutual funds every month with her savings
• She holds those mutual funds for long term

Is Disha a/an,

Active trader Speculator Active investor Passive investor

© Poornatha 77
• Saran is a college student
• He doesn’t know much about companies and doesn’t spend time researching
• He follows stock tips from others and makes impulsive decisions in
buying and selling
• Whenever the stock price rises, he buys and the price falls,
he sells out of fear

Is Saran a/an,

Active trader Speculator Active investor Passive investor

© Poornatha 78
 Particulars Trading Active investor Passive investor

Goal Make quick money Beat the market To match the market

Risk High Medium Low

Performance of index
Performance of the
Focus Stock price movement fund or blue-chip
company
companies

Expertise required High High Low

© Poornatha 79 of 44
79
Investment discipline

Say “NO” to

• Emotional decisions

• Crowd mentality – Copying what others

are doing

• FOMO- Fear of missing out

© Poornatha 80
Section: 7

What will a trader do? What will an investor do?

Technical analysis Fundamental analysis

© Poornatha 81
 Technical analysis vs Fundamental analysis

1. Forecasting and predicting the 1. Forecasting and predicting the

future stock price movement future value of the company
using historical data using financial statements

2. To identify investment
2. To identify trading opportunities
opportunities based on company
based on charts and indicators
performance

3. Considers only the stock price not 3. Considers only the company’s
company’s value value

© Poornatha 82
Technical analysis
Tools for technical analysis (Illustrative List)
Candlestick pattern
Trend lines
Relative Strength Index (RSI)
Moving Average Convergence Divergence (MACD)
Moving average
Stochastic Oscillator
Accumulation/Distribution Line
Fibonacci Retracement
Aroon Indicator
And the list goes on…
83
© Poornatha
 Have you heard about bull and
bear market? PAISA FACTS
Why is it named so?

Bull attacks by raising its horn up – the Bear attacks by swiping its claws
price of shares keeps rising down – the price of shares keeps
falling

84
Fundamental analysis
Types of fundamental analysis

Qualitative analysis Quantitative analysis

Characteristics and nature of the Financial or business performance
company metrics

Example: Example:
• Business model • Return on equity
• SWOT analysis • Return on capital employed
• Industry growth perspective • Debt to equity
• About the management • Revenue CAGR

© Poornatha 85
Quantitative analysis

Ratios & Margins (Sample)

Price to
earning ratio

Return on Capital
Employed Return on
Equity

© Poornatha 86
Does it sound complicated?
Then, it is time to find an investment expert!

© Poornatha 87
Activity एक्टिवििी

© Poornatha 88
Section: 8 Who is an investment expert?

Annotate
Blogs / comments / posts on the internet
predicting stock prices

Expert
Asset Managers

Your “stock trading” friend

Investment advisors

Insurance agents, tax consultants Not an expert

Instagram Influencers who give stock

tips
© Poornatha 89
Experts in investment

• Registered Investment Advisors

• Asset Managers

© Poornatha 90
Not experts in investment

• Insurance agents, tax consultants

• Instagram Influencers who give stock tips

• Your “stock trading” friend

• Random blogs on the internet predicting

stock prices

© Poornatha 91
Where to find experts?

• SEBI’s official website

• Use only SEBI registered advisers

• There are about 1331 authorised

advisers across India (as on 11/11/21)

© Poornatha 92
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=13
Section: 9

I earn Rs.1Lakh p/m, but nothing is left at

the end of the month to invest!

Satish

How to plan your budget?

© Poornatha 93
 50-30-20 Rule of Money Management
100% of
Income

50% Essentials 30% Discretionary 20% Savings

Home Investment
Entertainment

Food and Water

Restaurant Bank deposits

Education Vacations

Clothes © Poornatha 94
Let’s see how Satish manages his income

Rs.1Lakh p/m
Salary

50% 30% 20%

Rs. 50,000 Rs.30,000 Rs.20,000

Essentials Discretionary Savings

© Poornatha 95
Why save 20%?

20%

10% 10%
Other needs Retirement plan

Buying a Higher Daily Medical

Wedding expenses needs
house education

© Poornatha 96
To safe guard your money in stock market,
you must know the do’s and don’ts of
Investing

© Poornatha 97
 Do’s of investing Don’ts of investing

Do research before investing Don’t invest with borrowed money

Invest for long term Don’t make emotional decisions

Diversify your portfolio

Start small, start early

© Poornatha 98
General guidelines

• Remember that nobody can promise you guaranteed returns in stock

market
• Inform your DP about any change in your Personal Information such as
address, bank account immediately
• Always make payments to registered intermediaries not in name of any
employee of the intermediary
• Read all documents carefully before investing
• Do not share OTP received from bank, broker, etc with anyone
• Never deal with any unregistered or unauthorized market intermediary
• Don’t act on unsolicited SMS and emails providing tips, stock
recommendations, assured returns etc

99
 Summary

• First things First

Income Inflation Investment

• Principle of Principal

1st S- Start early 2nd S- Spread 3rd S- Stay long

Invest as soon as wide Invest for the long
you can Diversify your term
investment

© 2022 -Poornatha Partnering Entrepreneurs Pvt Ltd 100

-For Private Circulation Only-
 Summary
• Know the market

Primary and Opening a Demat Market

Secondary Market account Intermediaries

• Numbers rule the market

Evaluating
Technical analysis
Trading vs investments
Vs Fundamental
Investing • CAGR
analysis • Rule of 72,144

Money
Do’s and Don’ts of
management
investing
rule(50-30-20)
101
102
NSDL Social Media Presence

103
Disclaimer

This is an awareness program for educational purposes only.

We teach based on the first principle basis through examples.

Stocks, Companies, brokers and Mutual funds used in this

program are for informational purposes, not a buy or sell
recommendation.

Investments in securities are subjected to market risk, past

performance doesn’t guarantee future returns.

Investors are requested to do thorough research or consult a

SEBI registered investment advisor before making investment
decisions.
Poornatha 104