The Science of Stock Market Investment - Practical Guide to Intelligent Investors

by Chellamuthu Kuppusamy

company. Our laws enable shareholder to voice their concern against the top management if it does not function in the best interest of the owners.

A clever investor should avoid companies that have borrowed too much if the inflation is set to increase.

Compounding is a simple formula if we view it merely as a game of numbers. But if you attach a ‘Rs’ or ‘Dollar’ or ‘Euro’ or ‘Pound’ tag, it becomes a very exciting game. And, its power – the power of compounding – is gigantic. World famous scientist Albert Einstein termed this power as the eighth wonder of the world. We celebrate film actresses and their milky skins as world wonders.

If the investment grows at 15 per cent --- 72/ 15 = roughly 5 years If the investment grows at 12 per cent.--- 72/ 12 = roughly 6 years If the investment grows at 6 per cent--- 72/ 6 = roughly 12 years

“Risk comes from not knowing what we do”. (Most of us graduated without even knowing what we studied, let alone applying what we studied. Isn’t that a big risk?)

PE ratio = Price of a single share / profit of one share = CMP / EPS = 120/8 = 15

“Pen point is stronger than thousand gun points”

Happy hunting.