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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » If you are given credit.. what are the stocks you buy

If you are given credit.. what are the stocks you buy

Go down  Message [Page 1 of 1]

TortoizePlus

TortoizePlus
Manager - Equity Analytics
Manager - Equity Analytics
Let's think brokers are granted to give 300%.

From the news market will start pickup..

What are the stocks you buy..

My picks - PCH (It has some funadametals and fairly value at the moment. On the other hand it is more volatile and response to the market quickly.)
ODEL (Except a seasonal run during this time.. and fundametals are not bad either)

mark

mark
Expert
Expert
so you gng to use ur all credit? So who may buy from you?
will retailers left any confidence to do so?

Aamiable


Vice President - Equity Analytics
Vice President - Equity Analytics
might have to wait till they start settling credit...... all the time they gave credit.... there were episodes of force selling.... if credit is taken that has to be settled with an interest one day...

Kumar

Kumar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
I won't buy anything, I'll sell all my PF and wait for the credit clearence day.
My dear the credit 300% will create a bubble for no reason - due to our so called intelligent investors- sorry no no traders.
Most of you won't agree.
Wish you all the best.
Waiting for the credit clearence day.

chamith

chamith
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
One thing for sure, that you are not inline with the Tortoise Plus strategy.

npc86

npc86
Manager - Equity Analytics
Manager - Equity Analytics
From this Monday morning 90% of my collection will over..! I like this endless opportunities in CSE..! Most of guys here will happy this time...!
All the best..!

Rajaraam


Vice President - Equity Analytics
Vice President - Equity Analytics
I think first we should understand what is this 300%. That is the maximum limit that broker can give credit to their clients. An amount equel to 300% of broker's liquid assets value(liquid assets as defined by SEC)could be granted as margin credit .But any individual client can get only a maximum of 50% of his/her PF value. However most brokers release less than 50%.My broker allows around 25-30%.That means to obtain a facility of Rs 1 mn my PF value should be a minimum of around Rs.3.5 mn- 4 mln. As far as I could continue paymetnt of interest they dont take action to force sell. However if you buy on credit you will have to do a good assesment about the stock that you are going to buy coz in a shortperiod you will have to sell them to setttle your credit. Coz otherwise you will have to pay interest continuesly and finally you will lose money from the business. So credit could be used only for trading and not for investing.

However, some ppl who has lot of illuquid assets like property may seek credit to buy shares as investment too. Coz he needs reasonable time period to sell such assets and find money to settle his/her dues. If he/she decides that it is more benefitial to have shares to enhance wealth than continue in the present form of asset he/she tends to buy shares on credit as investment as well.

Roboticfx

Roboticfx
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Well said Rajaram! That's the real truth between this credit rule.

Using credit to purchase stocks for very short term profit, that's good. It reasons for the upward of the share market.

But buying shares for long term reasons for a downward.

Trillionaire

Trillionaire
Manager - Equity Analytics
Manager - Equity Analytics
@Rajaraam wrote:I think first we should understand what is this 300%. That is the maximum limit that broker can give credit to their clients. An amount equel to 300% of broker's liquid assets value(liquid assets as defined by SEC)could be granted as margin credit .But any individual client can get only a maximum of 50% of his/her PF value. However most brokers release less than 50%.My broker allows around 25-30%.That means to obtain a facility of Rs 1 mn my PF value should be a minimum of around Rs.3.5 mn- 4 mln. As far as I could continue paymetnt of interest they dont take action to force sell. However if you buy on credit you will have to do a good assesment about the stock that you are going to buy coz in a shortperiod you will have to sell them to setttle your credit. Coz otherwise you will have to pay interest continuesly and finally you will lose money from the business. So credit could be used only for trading and not for investing.

However, some ppl who has lot of illuquid assets like property may seek credit to buy shares as investment too. Coz he needs reasonable time period to sell such assets and find money to settle his/her dues. If he/she decides that it is more benefitial to have shares to enhance wealth than continue in the present form of asset he/she tends to buy shares on credit as investment as well.




Thank you very much Rajaraam!
You have nicely explained! I had a very wrong and different idea about the maximum credit limit. Now the concept of maximum credit is crystal clear to me! Really appreciate!
Keep up the good work! Very Happy

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