| In the strict sense of the term, the prevailing share | | | | happening in this area after all! Even the Secretary, |
| price of a company quoted in the exchange and | | | | Treasury and the Governor of Central Bank of a |
| what is going on within the company in the | | | | country are often taken unawares by the stunning |
| production, distribution and sales units are closely | | | | developments in the Exchange. Why their expertise |
| linked. One impacts the other and the share price | | | | fails them to anticipate and control the situation? |
| needs to be the true index of the strength or | | | | Nevertheless, basics are basics. Every trade has |
| weakness of the company. This is the basic rule. But | | | | some special rules and formulas of play by which it is |
| this rule is rarely honored as several forces tell upon | | | | influenced and governed. Presently, investors are of |
| the market and they push and pull the price in | | | | two categories. The common share holders of the |
| different directions. Buying and selling activity is the | | | | company and the preferred shareholders! Technically, |
| outcome of it. Isn't it strange, on a given day, | | | | common share holders are part of the administration |
| several thousands buy the same share and an | | | | of the company, even though they do not participate |
| unspecified numbers sell it? Do both these categories, | | | | in the day to day affairs. They get dividends and |
| which are in disagreement as for their decisions on | | | | bonus shares as per the performance indicators of |
| the share, ignorant of Stock Market basics? The | | | | the company. Preferred share owners get the fixed |
| answer is both yes and no. One of the categories | | | | life long dividends but they do not have the voting |
| has made the wrong decision. Alternatively, one say | | | | rights. |
| that the decision that is right for one can as well be | | | | Next important aspect is the price of this share. As |
| wrong for the other. Variety is the spice of life. | | | | already stated, no one knows why the share price |
| Like the size of the waves in the ocean, share prices | | | | fluctuates, many times on day to day basis. |
| are unpredictable. With no cut and dry formula to the | | | | Technically one can say that the prices are the |
| governance of the prices, an investor has to continue | | | | responses to the demand and supply of shares. But |
| with one's guess work, on the basis of his past | | | | this is not the whole truth. Ground realities are |
| experience. If one is a new entrant to the field, he | | | | entirely different. |
| proceeds with his theory knowledge gained through | | | | With all the uncertainties, one has no other |
| literature, bulletins and journals published by the | | | | alternative but to learn some fundamental principles |
| brokers. He learns by mistakes. The continued | | | | of investment, to be on the safer side as much as |
| popularity of the share business since the last couple | | | | possible. Make use of all the tools available, like |
| of centuries indicates that this business has some | | | | journals, information on the internet, your broker's |
| substance. The investors see the latent possibility of | | | | advice, past history of the share, current market |
| profits by dealing in shares. An interesting game is | | | | mood of the share, future prospectus for the |
| invariably played in the exchange, every minute, hour | | | | products of the company, likely impact of the |
| and day. The mysterious happenings baffle all | | | | competition on the products from the foreign |
| concerned. Some one earns millions, and some one | | | | sources etc. The more methodical you are, the |
| struggles to make a few hundred dollars and some | | | | chances of the losses are minimal. Just as reckless |
| return home with a long face, suffering losses. | | | | driving is dangerous, to cultivate reckless investing |
| `Analysis, research, experience, academic | | | | tendency is also dangerous. The best basics of stock |
| qualifications-nothing comes to one's rescue. What is | | | | market are to avoid losses and to book profits. |