Learn How To Invest In Stock Market For Beginners

Key Concepts

Stock Market Investing
Equity vs. F&O (Futures and Options)
Intraday Index Trading (Bank Nifty, Nifty 50)
Risk Management
Multibagger Stocks
Inevitable Sectors
Fundamental Analysis
Technical Analysis
Scuttlebutt Investing
Geopolitical Impact on Stocks
D-dollarization
Company Financial Analysis (P&L, Balance Sheet, Cash Flow)
Investor Presentations and Conference Calls
Pattern Recognition
Capital Expenditure (CAPEX)
Promoter Holding
Bloomberg Hack
Returns Expectation
Compounding
Income to Savings Ratio
Liquidity in the Market
Inflation

Investment Journey and Profitability

The speaker, Shashank, made around ₹1.1 CR in the stock market last year, with ₹28 lakhs from equity and ₹88 lakhs from F&O.
He started with ₹30 lakhs of capital, saved over 5 years from his investment banking job and creator journey.
His initial salary was ₹50,000 per month, saving around ₹12,500 per month.
He invested in Ethereum at $8 and sold at $24.
He emphasizes the importance of increasing capital through income rather than solely relying on investment returns.
He aims for a 50% income-to-savings ratio.

Early Mistakes and Learning

Initially, he lost money following Telegram groups and stock tips, wasting around ₹1 lakh.
He then learned technical analysis from YouTube and started trading with his own money.
He realized the importance of risk management and controlling greed.
He highlights that 90% of traders lose money, 9% barely beat FD returns, and only 1% make alpha.

Investment Strategies and Sectors

He invests in equity and F&O, with F&O offering higher leverage but also higher risk.
He lost ₹6 lakhs in 15 minutes on election day due to a wrong bet on index options.
He made significant returns in the defense and railway sectors by reading manifestos and tracking where the money flows.
He bought defense sector stocks after noticing that 80% of the defense budget was allocated to specific areas, resulting in 70-80% returns.
He invested in a food delivery startup after its IPO fell and the CEO indicated profitability, yielding 80% returns.
He identifies "inevitable sectors" like 5G/6G, green energy, electric vehicles, data centers, and AI.
He focuses on identifying the companies that will dominate these sectors, noting that most industries consolidate to 2-3 major players.
He prefers investing in established companies with deep moats rather than smaller companies hoping to become big.

Stock Selection Methodology

Identify Inevitable Sectors: Focus on sectors that are bound to grow regardless of government policies.
List Potential Winners: Identify 8-10 companies in each sector that could potentially dominate.
Analyze Market Share: Determine which 1-2 companies are most likely to capture the majority of the market share.
Track Smart Money: Follow where the money is flowing, especially from government initiatives and large corporations.
Read Manifestos: Understand the long-term plans and priorities of political parties.
Study Investor Reports and CEO Interviews: Gain insights into company strategies and future plans.

Connecting Geopolitics to Stocks

War creates demand-supply imbalances, affecting specific sectors.
Example: Russia-Ukraine war affected Ukraine's exports, creating opportunities for substitute suppliers.
Example: Red Sea issue affected Indian ceramic companies due to raw material sourcing disruptions.
Example: Potential China-Taiwan conflict could disrupt semiconductor supply, impacting auto stocks.
US elections can influence market trends, with Trump's pro-crypto stance and potential impact on the Russia-Ukraine war.

D-dollarization and Financial Meltdown

D-dollarization, where countries move away from using the US dollar for trade, could trigger a financial meltdown.
The US can print money because of global demand for dollars, but this could implode if countries start trading in local currencies.
Too much liquidity in the market leads to inflation.
Central banks use interest rates to control liquidity and inflation.

Financial Analysis and Key Metrics

P&L: Focus on sales growth, operating profit growth, and net profit growth over the last five years.
Balance Sheet: Check the debt-to-equity ratio (ideally less than 1) and compare loan amounts to cash reserves.
Cash Flow: Ensure the company is investing in fixed assets to drive future growth.
Promoter Holding: Monitor whether the company's founders or promoters are buying or selling shares.

Scuttlebutt Investing and Real-World Examples

Scuttlebutt investing involves gathering information from immediate surroundings and industry insights.
Example: Visiting a data center to identify the companies supplying equipment.
Example: Observing the types of wires used in buildings to gauge the growth of wire companies.
Example: Analyzing air traffic data and airport footfall to predict trends.

Resources and Learning

Screener.in: A free website for analyzing company financials and investor presentations.
ValuePicker.com: A forum for discussing individual stocks and gathering unbiased opinions.
Bloomberg Asia: A source for Asian market news (access free version via Canada website).
Wall Street Journal and The Economist: Resources for macroeconomic analysis.
Economic Times, Moneycontrol, and Livemint: Indian financial news sources.

Future Plans and Advice

Shashank is planning to obtain an RA (Registered Advisor) license and start a PMS (Portfolio Management Service).
He recommends starting with one sector, reading investor presentations and conference calls, and using ValuePicker for research.
He advises against trying to catch every market trend and emphasizes the importance of patience and long-term investing.
He expects the market to be bullish until 2028-2029.
He runs a masterclass with 1% Club, teaching fundamental analysis and how to find multibagger companies.
He emphasizes the importance of reading and staying informed about market trends and company performance.

Conclusion

The video provides a detailed overview of Shashank's journey and strategies in the stock market. It emphasizes the importance of fundamental research, risk management, and understanding macroeconomic trends. It also offers practical advice for beginners, including resources for learning and a step-by-step methodology for stock selection. The key takeaway is that successful investing requires dedication, continuous learning, and a long-term perspective.

Learn How To Invest In Stock Market For Beginners | Ep 34