Do it yourself

Ravi Bhatt, a brilliant student, completed his senior school education in 2018; went to a prestigious college in the US; completed his post-graduation in 2023. Worked some odd jobs in the interim and also interned with a top consulting firm. After finishing college, Ravi searched for a suitable job, but could not find any for more than six months. Finally, he returned to India in the autumn of 2023 and unsuccessfully tried for a decent job in India for a few months. Earlier this year he borrowed five million rupees from his father, a successful surgeon, and started trading in stocks and derivatives. Being a brilliant student, good in mathematics and data analytics, he soon developed a trading model of his own. He is now a full-time stock trader; making decent money; perhaps more than what he could have earned, working long hours for a consulting firm. Mitesh Gupta, an average student, passed senior school in 2021. He failed to pass the admission test for graduate school. He joined a ...

One of the most popular concept of invetsing is the "power of compounding". Almost every prominent investor and financial author has emphasized on this concept. The principal of compounding, insofar as financial investments are concerned, works on the basis of three key factors (a) regular investment; (b) staying invested for long period; and (c) rate of compunding. To take full advantage of the power of compounding, it is therefore essential to: (i)     Invest regularly; (ii)    Reinvest the return on investment; and (iii)   Try investing at the maximum possible rate of return, without of course compromising the safety requirements. Does this imply that the concept of compunding is relevant only for investors who could "buy and hold" an investment for sufficiently long period of time? This question is more pertinent to answer is whether the concept of compounding is relevant for stock traders also; especially when currently the markets are be...