Chapter 1

1. Clearly explained how paid-subscription and free trade tips fail. Free one's are used to improve one's own stocks. Paid subscription is tempted with free trails and that includes random guessing of a stock
2. Don't invest because your friend gained something or he/she advised you to do so or any broker tipped. Invest only when you know why you are doing
3. Future and Option, intraday, short term ones are not good for retail investors
4. It is the bear market that separates intelligent investors from others
5. Warren Buffet —> 22% CAGR for past 50yrs..means money doubling every 3yrs...1L 50yrs before is now 1L(2^(50/3)) —> 4100L ~ 41cr*
6. Your broker, stock exchange, and government can only become rich from short-term trading. Also, don't leverage at any cost (investing with borrowed amount)

Chapter 2

1. Ten lakhs investment in bank’s fixed deposit will become 7.48 lakhs only (after one year) considering 8.5% interest, 9%inflation and 30.9% tax (highest bracket)
2. ROE, Debt to Equity ratio (<1), Optional ones, for detailed analysis (Current ratio, Quick ratio, Interest coverage ratio)

Chapter 4 — Evaluating Management

1. Shareholding pattern analysis —> When promoters are increasing their stake, no need to feel afraid, just go ahead and purchase. But when they are reducing heavily, it doesn't mean that we have to sell. They might sell because of personal reasons. But be careful and analyze more

2. FIIs higher implies the stock is good. But we need to buy a stock where we can know that FIIs will increase their holdings in future thus generating huge returns

3. If individuals/public shareholding increases, it's not a good sign. So, if you have a stock, sell it before the emotions cloud.

   

4. Promoters pledging of shares is not a good sign —> Keeping their shares as collateral, so if they can't clear loan, the bank will liquidate the shares thus reducing stock price

5. Avoid companies where promoters pledged more than 30% and the pledged amount is increasing in every quarter

6. Higher dividend payout ratio with increasing dividend rate confirms shareholder’s friendliness of management.

Chapter 5 — Valuation

1. Infosys in 2000-2007 gave -ve returns but had a +ve balance sheet. PE was around 100. Though it's a quality product, we purchased at higher price (PE very high) so no one buys from us. Buying best company (ROCE, ROE, management analysis) with best price (PE and all) is the best choice