This is a review article of the book “How to Avoid Loss and Earn Consistently in the Stock Market”, written by Prasenjit Paul.
Just like any other field, stock market involves a learning curve. But most market participants start trading or investing in the stock market without any knowledge. This leads to huge financial losses. Then, its the stock market which gets demonized. However, most trades in stock market are closed at loss purely due to lack of any personal research and education. Books in the stock market niche are the best way to understand the stock market and minimize your losses.
The stock market is both lucrative and dangerous!
On the outer periphery of stock market you hear all those overnight quick-get-rich stories from stock market but as you get your own hands dirty and dig deeper, you face the real-side of stock market. You close your trades at loss every day. All your stock market research fails every time. Even the tips from so-called stock market experts can’t help you book profits. You feel like an alien for the stock market world. From here onwards a market participant has two choices, either quit the stock market and let that alien feeling seeded inside him or start introspection and get educated with the stock market theories.
Just make sure that you have not planted any stock market myth inside yourself. And remember, that for any stock market scam SEBI, which is one of the Indian financial regulators has a investor grievance platform called SCORES.
Book Review: How to Avoid Loss and Earn Consistently in the Stock Market
How to Avoid Loss and Earn Consistently in the Stock Market is written by Prasenjit Paul.
As a preliminary step, Prasenjit has described all the most important criteria to select stocks. Later, he has also given the strategy on the duration, a stock should be held. Personally, I have not read such easy-to-understand language in any of the stock market books. This book will appeal to every common man in India who keeps himself away from the stock market just because of stock market fears and jargons.
The author, Prasenjit initializes his thoughts by making you aware of the fact that your primary consideration should be to protect your invested capital in the stock market. He has focused so much on capital protection that he has dedicated the first two chapters to prepare the reader for this concept alone.
He has given a piece of wisdom to all the retail investors that they should stay away from the intra-day, futures and options trading. Prasenjit has logically explained how intra-day and derivatives are profitable only to institutional investors. A retail investor may book small profits a couple of times but a single instance loss may cost him a fortune. This book further advises that a retail investor should focus only on “Great Business” and hold them for the appropriate duration.
The book unfolds the reality that Learning stock market is easy but not simple
It’s easy because you don’t need to be brilliant or possess any degree from a prestigious university. All you need to do is understand the concepts of selecting a Great Business. Stock market is not simple because whatever you learn has to be applied with patience. It can take years to develop this level of patience and generating the required amount of strength to not get disturbed by that disastrous news about your most favourite stock. It takes years of practice to still-stand with the criteria you selected the stock with, even if the market sentiments go against your decision.
The successive chapters disclose the awesomeness of some ratios which can be used for the initial selection of Great Business stocks. These ratios are also explained in a straightforward manner. The author has even declared explicitly that the reader is not going to pass any MBA so there is no need to memorize the formula, just understand the concept. That’s how this book gives the insight to evaluate the management of a company without meeting them personally.
Finally, this book has given well-drafted points which if followed properly the reader will get a clear idea of the correct time to buy and sell a particular stock.⇯
Entrance to stock market without any theoretical knowledge about it leads to financial suicide only. The book How to Avoid Loss and Earn Consistently in the Stock Market is perfect for entry-level market participants.
Below are the key points which are detailed in easy to understand language in the book.
1) Select Profitable Stocks & hold for Appropriate duration
2) Always protect your invested money in the stock market
3) Stay away from intra-day & Derivatives
4) Stock Market is EASY but NOT SIMPLE
5) Ratios, to select stocks