Making money in stock market -I

Shankar has left the following link in the comment of one of my previous post How Interest rates affect stock prices – II.

The link is: At 28, a paraplegic, she makes her living from the stock markets (Opens in a new window). Please read this interview carefully.

The article is actually an interview with one Sujata Burla, who seems to have made considerable amount of money: On her total investment of 15 lakhs (or 1.5 million), she makes a MONTHLY profit of an average 10 to 15 percent, that means she makes a cool 1.5 to 2.25 lakhs each month. As claimed by the article, “September 19, 2007, when the Nifty was up 186 points, Sujata made a cool Rs 600,000 in a single day.”

Now, there is nothing wrong in this news or interview and the claims made. Infact, in my previous article on Traders, market Makers and Individuals, I’ve clearly mentioned that traders do make handsome profit and they earn their living of it.

In addition to the story of Sujata, I can also quote certain instances that trace back to 2005. Here is a story (again on Rediff) about one person called Nalin Pasricha (so-called Systematic Trader). Have a look at this article describing his fortune: Your PC can help you make millions.

Then, after reading the article, do NOT forget to read the comments from the reades which are available at :Readers’ Comments.

See how so many wealthy individuals, so called NRI’s are willing to seek advice and services from Nalin Pasricha, even willing to buy his trading system. All this based upon just one article being published in rediff

The article on Nalin was published in 2005. Till date, I don’t think any of the readers may have received any contact details of Nalin Pasricha. So many people after him, so many willing to give away their wealth to him for earning enormous profits, yet it will be impossible for anyone to find anything about Nalin Pasricha’s contact details.

My understanding is that Nalin knows the right thing and he is doing the right thing by not coming into limelight. He knows that a financial model that he is following will work only if he keeps it as a secret. The moment it is revealed to the world, it will no longer remain profitable. Repeating an example of Infosys: If I know today that Infosys (currently trading at 2000) will be worth 4000 a year later, I will immediately buy it. If more and more people know about it, then the demand for infy stock will increase. It will increase to such a level that infy will no longer be sold, there will be only buyers and no sellers. Even if someone sells it, he will sell it at a price that is near 4000 – the future predicted price of infosys. Hence, a model works only if it is limited to a person and is tested rigorously.

Then, Nalin can also do one thing: Don’t tell the secrets of trading to others, but take money from others and manage it on their behalf. Why is he not accepting moneys openly from other people and manage it on their behalf?

Continue to Part II