"Will the interest we receive from the bank be sufficient for us to run our family? While the household expenses will keep going up month after month, due to inflation, the interest income will remain the same. It may even get reduced. Explore the possibilities for getting a higher rate of interest, if we invest the amount elsewhere."
"If we invest the money in some scheme, intending to earn higher rate of interest, we may end up losing the capital."
"Think what can be done. Or, you may have to take up a job."
"What job can I get, at this stage of my life? Who will give me a job?" said Prabhakaran, feeling desperate.
A few months after retirement, Prabhakaran met his old friend Gopi. During the course of their conversation, Gopi said that he had been going to a stockbroking firm every day and doing stock trading, using the broking firm's terminal. He said that he was doing trading on intraday business, the system of buying a stock and selling it on the same day.
"Are you able to make profits?" asked Prabhakaran.
"There will be profits and losses, as in any business. But, overall, it is profitable. If you are interested, I will introduce you to the broking firm and get an account opened in your name" replied Gopi.
"But, I don't know anything about the stock market" said Prabhakaran.
"That won't be a problem. The experts in the broking firm will study the market and give suggestions for trades. If you buy and sell the stocks recommended by them at the prices specified by them at the right time, you will be able to earn profit from your trades. You don't have to do anything. If you give your order to the computer operator, the operator will place the order in the system and it will be executed, at the price specified by you. For every trade executed, you will instantly get a message in your mobile phone. You can sit beside the computer operator, watch the price movements on the computer screen and place your order. It will be a thrilling experience. In striking contrast to the dull and tiring feeling we got while doing our job, here we will feel enthusiastic and excited" said Gopi.
Prabhakar decided to try the opportunity. He went to the office of the broker's firm, along with Gopi. He saw that five or six people in his age group were sitting in front of each of the several computer terminals, observing the price movements on the terminals and giving instructions for buying and selling of shares.
Gopi introduced Prabhakaran to Suresh, the Customer Service Manager of the broking firm.
"Welcome, sir. You can open a free account with us. There are no charges. If you deposit one lakh rupees, we can complete all the formalities today itself and you can start trading from tomorrow" Suresh told Prabhakaran.
"One lakh rupees? Can I start with ten thousand rupees?" asked Prabhakaran, reluctantly.
"No, sir. In our opinion, this business can't be run with an investment less than one lakh rupees. That is why we recently increased the minimum investment from fifty thousand rupees to one lakh rupees. This is only a deposit. You can withdraw the amount any time. If you trade regularly, you will be able to withdraw a couple of thousand rupees every week. In which other business can you get this kind of a return?" said Suresh.
Prabhakaran got a profit of five hundred rupees on the first day of his trading. He couldn't believe it. All the three trades he had executed, following the recommendations received by him through messages sent to his mobile phone by the broking firm, turned out to be profitable. A net amount of Rs. 432 was added to his account, after broker commission and taxes were deducted.
"Today being the first trading day for you, you exercised too much caution in taking up the trades. You did only three trades, that too, in small lots of 50 shares. If you could take more risk and trade in lots of 200 or 300 shares and do more trades, you could earn much more" said Suresh.
The next day, Prabhakaran ended up with a loss of two hundred rupees.
"Gains and losses will alternate in this business. You will earn profit tomorrow" said Suresh, encouragingly.
The day after that, Prabhakaran earned a profit of one hundred rupees.
"You are too scared to take up a trade. In this business, you can earn big, only if you are aggressive" advised Suresh
As a result of the "aggressive" approach followed by Prabhakaran, he incurred a loss of five thousand rupees, the next day.
Prabhakaran was rattled. The first though that came to his mind was that he should not trade any more, withdraw his investment and close his account with the broking firm. But, on reflection, he decided that he shouldn't panic and give up, after one adverse result.
He continued his activity.
The next day, Prabhakaran got a profit of fifty rupees. He could not decide whether this was an encouraging sign or a disappointment.
At the end of one month, Prabhakaran's capital had shrunk to thirty thousand rupees. He had incurred a loss of seventy thousand rupees, in one month. Prabhakaran tried to calculate for how many months he should have worked in his job, to earn this amount.
"Can I suggest you something? If you do commodity trading, you can earn a lot of money. You can carry forward the trade till the end of the month. Even if the price of a commodity falls after you have bought it, you can sell it after two or three days, when the price goes up. What more, you can also sell first at a higher price and buy later at a lower price. But, you will need a capital of five lakh rupees for trading in commodities" said Suresh.
Driven by an urge, Prabhakaran invested five lakh rupees and started trading in commodities. On his very first trade, the price fell on the day he bought the commodity. However, Prabhakaran was able to avoid the loss by waiting for three days and selling it on the fourth day, when the price reached near the value at which he had bought the commodity. Since he sold the commodity in a hurry, driven by a fear that the price might fall again, he was not able to make any profit on that trade. He was only able to avoid the loss.
The next trade was profitable. In the trade he took up next, the price fell on the first day. He waited for a few days for the price to move up again. But the price kept falling and he exited the trade with a loss of two lakh rupees. He consoled himself that if he could incur such a big loss, he could earn big profit too.
After three months, Prabhakaran quit stock trading, with a total loss of nine lakh rupees.
Section 2
Acting After Due Consideration
UkkAr aRivudaiyAr.
No comments:
Post a Comment