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EXECUTIVE SUMMARY

This project is carried out to study the investment pattern of the clients of Equity
master as well as other investors in stock market.
The other objectives are studying the investor’s psyche and segmenting the market.
This is a descriptive type of research and Survey Research method is the basic
research design. The questionnaire was prepared and the 100 clients of Equitymaster
in Mumbai and other 100 investors, who were not subscribers were interviewed for
the purpose of collecting relevant data.
The sample size is based on judgement. We use non-probability convenience
sampling.

Data collection is in two parts. Primary data is collected through questionnaire by


conducting interview. Before commencing with the actual interviews we studied the
Warren Buffet’s investment style and his strategy and Equitymaster’s approach
towards long term investment. This helped us in knowing the investment pattern of
long term investors and to gain knowledge to carry out our research.
Also this helped us in achieving our sales target.
Secondary data is collected through various sites, books and newspapers.
Findings from the research are that
Investors prefer companies with good management and don’t pay much attention to
the stock price. Clients generally invest for long term. Segment for Equitymaster to
concentrate is investors of the age more than 25 years and has monthly income of
Rs.25000 to Rs.50000.

On the basis of these findings, suggestions have been made to improve the services
and increase the client base of Equitymaster.

1
QUANTUM INFORMATION SERVICES
TOWARDS A MORE INFORMED FINANCIAL FUTURE

Quantum, with a history of compiling and disseminating financial information in


select Indian circles, recognised the power of the Internet early on. A company
promoted by financial experts, Quantum saw the opportunities the medium of the
internet offered to bring the Indian stock markets to ones fingertips.

For the last decade and more, the company has been contributing towards the growth
of the Indian markets by providing reliable financial analysis in addition to a
comprehensive database. This information was available to domestic and international
investors through The Quantum Stock Market Yearbook.

The company's annual publication, The Quantum Stock Market Yearbook, provided a
detailed research database of the country's economic and financial outlook. The
Yearbook reviewed the performances upto 200 Indian companies, the trends in major
industries, and provided details on the foreign markets.

With the arrival of the Internet and its worldwide access, Quantum decided to put its
bank of financial information online in 1996. Today, with www.equitymaster.com,
the average Indian investor could base his investment decision on a comprehensive
and relevant database. Widely trusted and vouched for as one of the most reliable
databases on the subject, this information is backed by 10 rich years of experience and
expertise. This site was developed and has evolved as the definitive site on Indian
equities and investments with quality information available in easy to read and easy to
access format.

The company also has a personal finance site for individuals- www.personalfn.com.
Individuals can freely access comprehensive and dependable financial information on
personal financial matters. The site's highly interactive format makes it extremely
user-friendly and appealing.

2
With these two sites, Quantum Information Services has become a leading provider of
Indian corporate information, online. A detailed review of the two sites tells you just
what it is that keeps the investors coming back to Quantum's sites time and time
again.

3
www.equitymaster.com
The investor's best friend
Launched in 1998, this website is a one-stop-source for most extensive research and
information on Indian stocks, foreign exchange markets, India-specific and global
indices, the commodity markets, foreign fund flow, etc. It has grown in recognition
as one of the most reputable and reliable websites on Indian finance and is continually
developing new interactive tools to give visitors more power on the market.
THE LINKS BEHIND THE SUCCESS
The people behind the most reliable and dependable financial sites on India, today are
a team of leading financial and IT professionals, highly respected in their respective
industries for their high levels of commitment and competence. To list, they are:
Ajit Dayal, Co-Founder & Chairman: His reputation as the founder of India's first
equity research company as early as 1990 precedes him everywhere he goes. Ajit has
been a broker, a research analyst (top ranked by Asia Money, Institutional Investor)
and a fund manager during his career. He has also been regularly writing articles on
the stock market, for a long time now.
Riyaz Ladiwala, Co-Founder & Chief Executive Officer: The company's two
products are under his able care. As the product builder, the look, the feel, the
services, the tools, the working and everything else that the sites denote and present is
the result of uncompromising hard work of this net whiz. As the net heats up, Riyaz
looks forward to giving the users more reasons to keep coming back to the Quantum
sites.
Management Committee:
Ajit Dayal Chairman
Riyaz Ladiwala Chief Executive Officer and Director
Murali Krishnan Vice President (Legal & Compliance)
Natraj S Analyst
Payal Tahiliani Vice President (Finance & Administration)
Rahul Goel Vice President (Content) & CEO (Personalfn)
Rakesh Bhuvad Asst. Vice President (Software)

Services Rendered By Equitymaster

4
Portfolio tracker
This is a program where an investor can keep a track of his stocks. The service also
allows the subscriber to create his mutual fund portfolio and manage it.

The product has many other functional options like: -


Create multiple portfolios with residential status (for tax calculations)
Get daily High / Low email alerts in your mailbox
Activity Report –This feature gives you a detailed information of any kind of event in
the company whose stocks are in your portfolio.
Updated every 15 minutes during market hours
The company also provides its users over 10 reports to analyze portfolio composition
and performance.

StockSelect
Earlier it was know as ‘Quantum View’. This product was introduced by the company
in the year 2002. Subscribers to StockSelect get weekly recommendation on the basis
of research done by team of research analysts. In stockselect one gets the
recommended buy price and sell price of the stock. The investment time frame is long
term. Each report provides investment rationale, the investment concerns and
financial analysis with projections. The recommendations given are of fundamentally
strong company. Subscriber can avail either for a softcopy that he/she can receive in
his/her mailbox or can get a hard copy through courier.

Research Reports
Research on India's top 100 companies.
Analysis and Buy/Sell price limits.
The Research Report service from Equitymaster is a great way to start investing in the
stock market. The comprehensive reports on India's leading companies offer not just
valuable analysis, but also provide with buy/sell limits for each stock which updated
regularly to help you identify the right stock for your portfolios.

Equitymaster's Research Reports are conclusive. Using their intelligent query module,
one can screen the universe of companies based on growth and price parameters.

5
Equitymaster has been promoted by the people behind Quantum - India's first equity
research house who have over the years provided advice to retail and institutional
investors.

General Features
EPS updated on quarterly basis, P/E ratios updated in real time Fundamental
analysis.
Each report provides an Investment Summary, Background, 'Reasons to Buy' and
'Reasons not to Buy'. Our views are independent, unbiased and balanced.
Query the Universe. Screen the universe of companies on multiple parameters. Know
the most underpriced stock in the sector and also the most underpriced stock from the
basket of 100 stocks.

New features
Buy/sell price limits for 1-year, 2-year and 3-year time horizons, depending on the
investment time frame.

Generally, Equitymaster does its business online. Equitymaster regularly keeps


seminars and keeps stalls at “stock market fair” to create awareness. When customer
visits site, he comes to know about different services provided by the company. If he
is interested in the services, he either makes online payment or couriers the cheque.

The company wanted to increase its consumer base by way of personal sales. This
method direct selling could also help the company in certain areas like increasing
communications with the prospective customers and enhancing confidence of the
existing customers.

We had a very good opportunity to work with Equitymaster. It was a very valuable
and helpful experience for us to work as sales representatives. There are many
competitors of Equitymaster in the market. To differentiate Equitymaster provides
unique attributes in their services mentioned above. We had to make people
understand the service’s attribute and their relative importance. We conveyed the
benefits of services to the customers. We made them believe in our services and

6
created a positive attitude towards company. Also we had to solve their queries. At
the end we had to convince them to subscribe to the service and then get the cheque.
We were given target to get subscription worth Rs 60,000 in 45 days and we
outperformed and did business worth Rs 1,00,000.
In this two months, we met around 150 customers. We got a vast experience to read
mind of various people of different cast, religion and culture.
This experience helped us in carrying the following research.

7
TITLE
“Profiling investors in stock market”

OBJECTIVES

 To study the investment pattern of the investors in stock market

 To study investor psyche

 Segmentation of customers demographically

LITERATURE REVIEW

Aggressive Investment Strategy


A method of portfolio management that attempts to achieve maximum return
Aggressive investors place a higher percentage of their assets in equities than in safer
debt securities. This type of investor typically has quite a few years before retirement
and takes risks that most of us wouldn't

Balanced Investment Strategy


A portfolio allocation and management method aimed at balancing risk and return.
A balanced portfolio may combine stocks, bonds, packaged products, and cash
equivalents

Defensive Investment Strategy


A method of portfolio allocation and management aimed at minimizing the risk of
losing principal. Defensive investors place a high percentage of their investable assets
in bonds, cash equivalents, and stocks that are less volatile than average
A defensive strategy typically means a low risk/low return investment portfolio

8
Investment Philosophy of Warren Buffett
Warren Edward Buffett. Born August 30, 1930, Omaha. Son of Howard and Leila
Buffett.
Warren Buffet, a multi-billionaire and the second richest man in the world, is the most
successful investor in history. Known as the "Oracle of Omaha," he runs Berkshire
Hathaway Inc., the company through which he has made most of his investments.

How Warren Buffett Did It --


In the world of investing, the name Warren Buffett is synonymous with success and
prosperity. Building from the ground up, Buffett chose wisely and picked his stocks
with care, in turn amassing the huge fortune for which he is now famous. Mary
Buffett, former daughter-in-law of this legendary financial genius and a successful
businesswoman in her own right, has teamed up with noted Buffettologist David
Clark to create Buffettolog

The conservative investment philosophy of Warren Buffett


Warren Buffett is the wealthiest investor of the world and his investment philosophy
is adapted from his masters: Benjamin Graham and Philip Fisher.
About his masters Buffett said:" I am 15% Fisher and 85% Graham’’.
He defined investment conservative philosophy in a different way by its political
meaning: the resistance in front of change.
For Buffett, conservative action came from "facts and reasoning’’, and it is different
by conventionality that means human action supported by others opinion. There are
many aspects that have created the conservative investment philosophy and must be
reminded.

1. Creation of a methodology of analysis and selection of companies and its


application day by day.
2. The most important three mistakes - the price we pay the management we join and
the economic future of business.

Another aspect is fundamental analysis of a company, neither of its market price, nor
the attention given to the growing of return on equity.

9
But the most important factor that defines the conservative investment philosophy is
the attitude in front of the investment environment that will be designed by the
following examples.
In the late 1960s stock market has grown too much and PER was over 50. Buffett
analyzed stock-market situation and wrote to his shareholders the following words:
"On one point, however, I am clear, I will not abandon a previous approach whose
logic I understand, although I find it difficult to apply. Even though it may means
foregoing large and apparently easy profits, to embrace an approach which I don’t
fully understand, have not practiced successfully possibly could lead to substantial
permanent loss of capital.’’
When somebody asked him why didn’t buy MICROSOFT, he said that doesn’t
understand business very well and can’t predict the future cash - flows on a long -term
basis. He said about knowing the business where you invest and the circle of
competence that: "doesn’t matter how big is circle, count how well defined its limits
are!’’
Another popular attitude of Buffett is about Macroeconomy: ’’we don’t spend time
analyzing figures about employment rate, interest rate or exchange rate.’’
These examples and Buffett’s attitude conduct us to three elements that define
investment conservative philosophy:
• Understanding of business; Don’t enter in a business that you don’t
understand, even seems to be simple or complicated for others.
• Control: Don’t be preoccupied about things that you can’t control like interest
rate or exchange rate, and try to buy only those companies that are not hurt by
inflation, try to control the business (control position in shareholders meeting)
and capital allocation because you’ll influence company’s future.
• Prediction and Counting: This condition is the result of business
understanding that allows prediction and counting of the future cash-flows and
calculation of fundamental value;

Personalized Investment Style

The investment style must represent you as a personality and competence level. The
example with MICROSOFT is essential for this case. The fact that Buffett

10
did not understand the Microsoft business and couldn’t predict its cash-flows don’t
mean that nobody else can’t understand and predict it.
Finally, the conservative philosophy is an attitude and philosophy about investment
action based on facts and reasoning and can be defined by four elements:
understanding, control, prediction -counting and subjectivity.
No one has had Warren Buffet's level of success when it comes to investing in the
stock market. For over 30 years, Warren Buffet has obtained unparalleled results
while sticking to his time-tested approach of investing in solid stocks at attractive
prices.

WARREN BUFFETT HAS PROVEN THAT THE ONLY WAY TO ACHIEVE


LONG-TERM SUCCESS IN THE MARKET IS BY INVESTING AND NOT BY
GAMBLING. NO ONE COULD REALLY ARGUE WITH THAT .

Buffett’s Investment Style and Equitymaster’s approach

_ Strong business fundamentals


_ Buy low, sell high
_ Traits of a good investor
_ Intrinsic value Vs stock price
_ Invest for the long term
_ Circle of Competence
_ Minimize risks

Strong Business Fundamentals: -stable company having strong management team


with certainty of future cash flows

Buy Low, Sell High


Usually Investors get cold feet (i.e.) sell or Herd instinct (i.e.) buy
_ The result is buying high, selling low!

However, Buffett says


_ BUYS LOW, SELLS HIGH

11
_ SHORT-TERM MARKET VOLATILITY DOES NOT CONCERN HIM
_ DAY-TO-DAY STOCK QUOTES ARE MEANINGLESS

Traits of a Good Investor


According to Buffet the difference between investors and speculators is attitudes
toward stock pricing. Investors master their emotions, not get caught up in the market
momentum, discipline, patience, flexibility, courage, confidence, decisiveness

Intrinsic Value Vs Stock Price


Some of the Critical Investment Factors are determining the intrinsic value of a
business and paying a fair or bargain price for it
Intrinsic Value is discounted value of cash that can be taken out of a business during
its remaining life

Buffett values a company on the basis of return on beginning shareholders equity,


Change in operating margins, debt levels & capital expenditure needs of the company.
He also considers the Company's cash generating ability

Invest for the Long Term


Buffet says Market is for buying & selling. Short term fluctuations do not bother him.
But in general Investors overreact when the Stock prices are too high or low, which in
no respect reflect true value of company
How ever in long run, price = true value

Circle of Competence
_ Draw a circle only around businesses that one understands, do not bother about
those outside this circle
_ Never invests in businesses which cannot be understood.

Minimize Risks
_ Searches for investments in which risk is eliminated or minimized. Only take risks
where the chances of total loss are low and gains are substantial
_ Minimize risks greatly by concentrating on only a few holdings (opp. of
diversification) invest over long term & in stable companies

12
Rule-of-Thumb
_ Think of owning stock as being an owner of the company. Study that
company and its competition thoroughly, when invest in the same for the long haul
(> 5 years),
_ Do not use leverage, and do not be led by the market's moves or by what other
investors do.

Buffett’s Success
Buffett’s success is not a matter of luck. But for a success like this, one should have a
clear perception, discipline about his stocks. He should treat his stock as a business
and not a mere stock. Same as one invests in a business for long term he should also
hold the stock for long term & must a complete knowledge of management of
company, the stocks hold should not be diversified much (Circle of Competence).

General Soundness of Strategy


a) Looking for bargain companies, with good management
b) Invest for the long term
c) Ignore stock market
d) Holding on to a falling company
e) Buying businesses with .strong histories of profitability and with a dominant
business franchise.
f) Focusing on only a few holdings

13
17th may 2004 -The BLACK DAY in Stock Market

Yeh kya Hua

Kab Hua

14
Kyun Hua

Lessons from the crash


It is very hard to learn and to change; history should keep on repeating itself as far
as investing behavior of masses is concerned. The nature of equities Equities are
slaves of earnings over long periods and
Equity returns = profit growth + dividends

Over short periods they are “ fluctuating”


“In the short term market is like a voting machine but in the long term it is
like a weighing machine”

Warren Buffett

The voting machine & the weighing scales(short term volatility & long term returns)

Common investing behavior


Equities are unique assets that investors feel more comfortable buying at higher prices
and selling at lower prices

15
Investor psyche - wrong emotion dominates at the wrong time

Thecy
cleo
ffe
ar, g
ree
dandh
ope

Fear Greed Hope

Zuric
hIn
diaMu
tua
lFu
nd

Investor’s Psyche - At Work


Till December 1999, all private sector equity funds put together collected roughly
1500 crores
During the quarter Jan-March, 2000, technology / tech heavy funds mobilised around
5000 crores
This was nothing but a repetition of history. In 1992 UTI Mastergain mopped up 4000
crores and In 1994 Morgan Stanley mobilised 980 crores
More investments at 6000 than at 3000 !

THE NATURE OF EVENTS

Two types of events:


1. That impact sentiment and not profits of companies, e.g. elections, wars,
floods, terrorist attacks, etc (“news value”)

2. That impact profits are demographics, purchasing power, interest rates,


commodity prices, leverage etc ( “profit value”)

Impact of events “News value” events have temporary impact on stock prices –
provide opportunity to buy or to sell.

16
Large fall in the BSE Sensex in recent memory

Date Sensex % Fall Reasons Date Sensex1 yr change


4/4/00 5052.94 7.15 Technology crash 4/4/01 3605 -29%
4/11/01 3458.39 4.26 Tehelka Scandal 4/11/02 3479.6 1%
9/12/01 3150.40 3.73 9/11 WTC attacks 9/12/02 3125.7 -1%
9/14/01 2987.50 5.27 9/11 WTC attacks 9/14/02 3098.9 4%
9/17/01 2830.12 5.27 9/11 WTC attacks 9/17/02 3076 9%
3/31/97 3666.34 8.26 Sitaram Kesri withdraws support to3/31/98
the Govt.3896.9 6%
6/10/98 3469.17 4.52 Pokhran nuclear tests 6/10/99 4041.9 17%
6/15/98 3349.85 5.81 Pokhran nuclear tests 6/15/99 3951 18%
4/26/99 3406.59 4.74 Jayalaitha withdraws support to the4/26/00
Govt. 4534 33%

News events are forgotten very fast – Kargil war, Iraq war, Sept 11, fall in
governments ; have temporary impact on prices


Profit events – have lasting impact on share prices; though often have less news value.

For those who are still not convinced

In the last 20 years,

we’ve seen ….
Two/ three wars
•At least three major financial scandals
•Assassination of 2 prime ministers
•At least 3 recessionary periods
•11 different governments and
•An unfair share of natural disasters,
Yet GDP has grown by 15.6% p.a. and the Sensex by 19% p.a.

–Elections are a routine; some changes are inevitable but no material impact on
growth prospects of economy or corporates

–The fall has reduced the actual risk, though perceived risk is high at such times

17

–There are other risks that are more important e,g., global sentiment towards equities
etc

18
RESEARCH METHODOLOGY

SAMPLE DESIGN:

 Sample Population
Clients of Equitymaster and investors in stock market

 Sample Unit
Mumbai

 Sampling Method
We used Non-probability Convenience sampling.

SAMPLE SIZE ESTIMATION:


Sample size estimation was based on judgement. Sample size of 200 including 100
clients and 100 investors in stockmarket (non subscribers) was chosen.

RESEARCH DESIGN:
A research design is the specification of the methods and procedures for acquiring the
information needed. It is the over all operational pattern or framework of the project
that stipulates what information is to be collected from which sources, by what
procedures.

The type of research design to be used here is:


Descriptive research.
Once the purpose of the research is defined, the research would begin with a
literature review. With the help of literature review, we found different variables that
will help in framing the questionnaire.

19
DATA ANALYSIS AND INTERPRETATIONS
The Data collected was then analyzed on the basis of Age & Income as for the
purpose of finding the most attractive segment.

AGE wise Analysis


(1) Companies preferred for investment
30

25
Index stock
20
LargeCaps

15 Midcaps

10 F&O
Any
5

0
<25 25-40 40+ <25 25-40 40+

Subscribers Non Subscribers

(2) Market price of stock


40

35

30

25

20

1
5

1
0

0
<
25 25-40 40+ <
25 25-40 40+
LessthanRs20 20-1
00 1
00-500 morethan500 Any

Subscribers Non Subscribers


(3) Preferred investment time
20
1
8
1
6
1
4
1
2
1
0

8
6
4
2
0
<
25 25-40 40+ <
25 25-40 40+
<3Months 3-1
2Months 1
-3Years >3Years Daytrading Any

Subscribers Non Subscribers

20
(4)Value of your investment in shares
30

25

20

1
5

1
0

0
<
25 25
-40 40+ <
25 25
-40 40+
<1lacs 1
-5lacs 5-1
0lacs >
10lacs donotdisclose

Subscribers Non Subscribers


(5) Expected returns
35

30

25

20

1
5

1
0

0
<
25 25-40 40+ <
25 25-40 40+
<
10% 1
0-25% 25-50% >
50% Donot consider

Subscribers Non Subscribers


(6) Basis of investment
5
0
45

40

35

30

25
20

1
5

1
0

0
<25 25
-40 40+ <
25 25
-40 40+
Fu
ndamen
tal Tech
nicals Tips Oth
ers

Subscribers Non Subscribers

21
(7) Reasons for Investment

45

40

35

30

25

20

1
5

1
0

0
<25 25-40 40+ <25 25
-40 40+
Investm
entavenue Passion highreturns Friends Others

Subscribers Non Subscribers

(8)Allocation of funds
3500

3000

2500

2000

1
500

1
000

500

0
<
25 25-40 40+ <
25 25-40 40+
Equity Mutual Fund fixeddeposit Cash Others

Subscribers Non Subscribers


(9)Reading pattern
60

50

40

30

20

1
0

0
< 25 25-40 40+ <
25 25-40 40+
dalal Street Capital Market BusinessIndia Eco times Business Std
OutlookMoney Businessline Oth None

Subscribers Non Subscribers

22
(10) Financial web sites visited
50
45

40

35

30
25

20

1
5
1
0

5
0
<
25 25-40 40+ <25 25-40 40+
eqtm moneycontrol myiris indiainfoline capitolmktg yahoo Oth None

Subscribers Non Subscribers

23
Income Wise Analysis
(1) Companies preferred for investment
25

20

1
5

1
0

0
<
20 20-50 50+ donot <
20 20-50 50+ donot

Indexstock LargeCaps Midcaps F &O Any

Subscribers Non Subscribers

(2) Market price of stock


30

25

20

1
5

1
0

0
<
20 20-50 50+ donot <
20 20-50 50+ donot

LessthanRs20 20-1
00 1
00-500 morethan500 Any

Subscribers Non Subscribers


(3) Preferred investment time

24
30

25

20

1
5

1
0

0
<
20 20-50 50+ donot <
20 20-50 50+ donot
<3Months 3-1
2Months 1
-3Years >3Years Daytrading Any

Subscribers Non Subscribers

(4)Value of your investment in shares


30

25

20

1
5

1
0

0
<
20 20-50 50+ donot <
20 20-50 50+ donot
<1lacs 1
-5lacs 5-10lacs >
10lacs donot disclose

Subscribers Non Subscribers

(5) Expected returns


45

40
35
30

25

20
1
5

1
0
5

0
<
20 20-50 50+ donot <
20 20-50 50+ donot

<
10% 1
0-25% 25-50% >
50% Donot consider

Subscribers Non Subscribers

25
(6) Basis of investment
45

40

35

30

25

20

15

10

0
<
20 20-50 50+ donot <
20 20-50 50+ donot

Fundamental Technicals Tips Others

Subscribers Non Subscribers

(7) Reasons for investment


40

35

30

25

20

1
5

1
0

0
<
20 20-50 50+ donot <20 20-50 50+ donot
Investment avenue Passion highreturns Friends Others

Subscribers Non Subscribers

(8)Allocation of funds
3000

2500

2000

1
500

1
000

500

0
<
20 20-50 50+ donot <
20 20-50 50+ donot
Equity Mutual Fund fixeddeposit Cash Others

Subscribers Non Subscribers

26
(9)Reading pattern
40

35

30

25

20

1
5

1
0

0
<20 20-50 50+ donot <
20 20-50 50+ donot
dalal Street Capital Market BusinessIndia Ecotimes BusinessStd
OutlookMoney Businessline Oth None

Subscribers Non Subscribers

(10) Financial web sites visited


40

35

30

25

20

1
5

1
0

0
<
20 20-50 50+ donot <
20 20-50 50+ donot
eqtm moneycontrol myiris indiainfoline capitolmktg yahoo Oth None

Subscribers Non Subscribers

Now the investment philosophy of


Equitymaster:
Long term investment
Fundamentally strong company
A group
10-15% return on investment annually
when we consider the following parmeters we can see that investors with a age more
than 25 years and having income of Rs25000-50000 per month also mostly follow
these pattern.

27
So the segment for Equitymaster to concentrate is investors of the age more than 25
years and having income of Rs25000-50000 per month .

Having defined the group the data was further scrutinized to learn more about
the investing habits of the target group.

ANALYSIS OF THE DATA AFTER DEFINING THE TARGET GROUP


ALONG WITH THE NON SUBCRIBERS

Companies you prefer to invest in?

Subscribers Non Subscribers


Index stock 43.2 40
Large Caps 40.5 35
Mid caps 43.2 40
F&O 8.1 5
Any 27 25

While referring to the response received form the sample for the 1st question it can be
stated that majority of the people are more interested in investing in
Index stock
Large Caps
Mid caps
A very small percentage of the sample is interested in investing in f&o the main
reason being lack of knowledge with regards to the trading process.

You prefer to buy stocks having Market price of

Subscribers Non Subscribers


Less than Rs 20 0 0
20-100 16.2 45
100-500 10.8 30
more than 500 2.7 5
Any 72.9 35
When it came to the market value of shares in which the sample would invest it was
clear that stocks having a market value of less than Rs. 20 did not attracted them at
all, they also were not much interested in investing in stocks having a market price of
more than Rs 500.

For how long do you stay invested in a stock?

28
Subscribers Non Subscribers
< 3 Months 8.1 15
3-12 Months 35.1 15
1-3 Years 27 65
> 3 Years 8.1 5
Day trading 16.2 10
Any 13.5 5
In reference to the timeframe of there investment it can be seen that not much of the
investors prefer to stay invested in a stock for not more than 3 years. Also it reveals
that a good number of people prefer day trading in comparison to the other options
available. This phenomenon is mainly due to lack of knowledge in respect to the
benefits one can derive by staying invest for a long time rather than day trading.

(4)What is the value of your investment in shares? (Size of your Portfolio)


Subscribers Non Subscribers
< 1 lacs 5.4 30
1-5 lacs 24.3 45
5-10 lacs 21.6 20
>10 lacs 45.9 5
donot disclose 5.4 0

What returns do you expect from your investments in shares, annually?


Subscribers Non Subscribers
<10% 5.4 5
10-25% 59.4 80
25-50% 27 15
>50% 8.1 0
Donot consider 0 0
It can be seen that a very minute number of investor invest in stock for a return of less
than 10% this can be justified by saying no one would like to take risk for such a
small reward. As when we can see that majority of the sample expect return in
between 10-25% from investment in equityshares.

On what basis do you invest


Subscribers Non Subscribers
Fundamental 81 85
Technicals 18.9 0
Tips 21.6 60
Others 10.8 15
Considering the basis of investment it is crystal clear that fundamentals of a company
play a major role for decision making to an investor . it can be also seen that the
general public also take in to consideration the tips received from their brokers. This
is mainly because of the trust in the brokers/friends which has been developed due to
past experience.

Why do you invest in Shares?


Subscribers Non Subscribers
Investment 32.4 45

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avenue
Passion 27 15
high returns 64.8 80
Friends 2.7 15
Others 0 0
Higher returns are on the top of the ladder when it comes to reasons for investment in
the markets. We can also look at the trend in the interest rate (Continuously falling)
because of which the people are forced to take the risk. A noticeable percentage of the
sample also consider the same investment option as a good investment avenue
through which they can diversify there risk. Where as a very miniscule percentage of
the subscriber sample invest because of social need in the market but the same is high
in case of the non subscribers.

If Given a sum of Rs.100/- how would you invest it in all of the following
Subscribers Non Subscribers
Equity 1965 920
Mutual Fund 410 225
fixed deposit 385 405
Cash 690 325
Others 260 125
For an investor it is very crucial how he bifurcates his funds so as to maximizes
returns but at the same time try and keep the risk factor as low as possible. Thus from
the above distribution it can be seen that the sample uses a 50-50 method of
investment in general.
They are ready to invest 50% of the amount in the stocks so as to maximize profit but
at the same time also investin other options where there is low returns but more of
gurantee.

Which financial magazine/newspaper do you read ?

Subscribers Non Subscribers


dalal Street 10.8 20
Capital Market 18.9 15
Business India 13.5 20
Eco times 86.4 85
Business Std 35.1 40
Outlook Money 16.2 10
Business line 10.8 10
Oth 35.1 20
None 5.4 0
In terms of readership Economics Times is the undisputed leader both with the
subscribers & general sample. But we can see that Capital Market, Business India,
Business Standard, Business line can also not be neglected while making decisions in
terms of selecting tools for advertisement as a good amount of the people also read
this papers and magazines.

Which financial websites do you visit? Ranking


Subscribers Non Subscribers

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eqtm 75.6 30
moneycontrol 51.3 80
myiris 5.4 5
indiainfoline 16.2 15
capitolmktg 27 5
yahoo 0 10
Oth 37.8 25
None 16.2 0
In terms of financial web sites visited there is a disparity mainly because subscribers
have paid to equitymaster and will prefer to visit the site more than any other site of
the same nature.

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Observations

• People invest in the companies with good management and don’t pay much
attention to the stock price.

• There is a good enough segment of long term investors. Also day traders and short
term investors play safe game by investing some capital in long term and
minimizing risk.

Short term market volatility does not concern them. Day to day sock quotes
are meaningless for them.

• Difference between investors and speculators is attitudes toward stock pricing.


Investors master their emotions and don’t get caught up in the market momentum.

• A long term investor posses traits like discipline, patience, flexibility, courage,
confidence

• Segment for Equitymaster to concentrate is investors of the age more than 25


years and having income of Rs25000-50000 per month.

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RECOMMENDATIONS

Increase Visibility
when the non subscribers were asked about www.equitymaster.com
it can be clearly seen that the visibility was low as compared to
www.moneycontrol.com thus the company should take dinosaur steps to increase it
by advertising in magazines & news papers. The location of the office can also be
used by putting sign boards on the walls of the office facing the road.

BSE and NSE live quotes on the web page of www.equitymaster.com


While operating his/her portfolio on www.equitymaster.com a client has to open
other sites like www.yahoo.com to see live quotes. This feature can add lot of value to
the site as the client does not have to log on to any other site for viewing the live
quotes.

Sponsored links
Equitymaster can pay search engines like google to put sponsored link of
Equitymaster for the publicity purpose and to increase the number of hits.

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APPENDIX
Questionnaire
(1) Companies you prefer to invest in?
 Index Stocks
 Large Caps
 Mid Caps
 Futures & Options
 Any

(2) You prefer to buy stocks having Market price of


 < Rs 20  Rs 20 -100  Rs 100 - 500  >Rs 500 
Any

(3) For how long do you stay invested in a stock?


 < 3 months  3-12 months  1-3 Years  > 3 Years
 Day Trading

(4) What is the value of your investment in shares? (Size of your Portfolio)
 < 1 lacs
 1 lacs to 5 lacs
 5 lacs to 10 lacs
 > 10 lacs

(5) What returns do you expect from your investments in shares, annually?
 <10%  10%-25%  25%-50%  >50%

(6) On what basis do you invest


 Fundamentals
 Technicals
 Tips
 Others

(7) Why do you invest in Shares?


 A good investment avenue
 Passion
 High Returns
 Because my friends/ other people invest
 Other

(8) If Given a sum of Rs.100/- how would you invest it in all of the following
Equity Shares
Mutual Funds
Fixed Deposits
Cash
Others

(9) Which financial magazine/newspaper do you read ?


 Dalal Street Journal / Flash News

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 Capital Markets
 Business India
 Economic Times
 Business Standard
 Outlook Money
 Business Line
Others Please Specify______________________________

(10) Which financial websites do you visit? Ranking


 Equitymaster.com
 Moneycontrol.com
 Myiris.com
 Indiainfoline.com
 Capitalmarkets.com
 Yahoo.com
Others Please Specify______________________________

(11) How Often do you visit Equitymaster?


 Daily
 Once a Week
 Rarely

(12) Which Section do you visit on Equitymaster?


 Stock Quotes/Mystocks
 Views on News
 Todays Market
 Stock Market Specials
 Bulletin Board
 Gainers/losers
 Outlook Arena
 Other

(13) Age:

(14) Occupation: ___________________

(15) Organisation ___________________

(16) Designation ___________________

(17) Income
 < 20,000
 20,000-50,000
 50,000+

BIBLIOGRAPHY

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 Books and journals

Buffettology – Warren Buffett


Business Standard

 Websites
www.equitymaster.com
www.bseindia.com

 Events
Equitymaster’s seminar “What next?”

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