How to Avoid Loss and Earn Consistently in the Stock Market: An Easy-To-Understand and Practical Guide for Every Investor

by Prasenjit Paul

Hundreds of books are there about ""How to make money from stocks?"" Still 80% small investors suffer loss in the stock market. Why? Plenty of free trading tips are available across Television and Internet; still maximum small investors are unable to earn significant return consistently from trading. Why? Why maximum individuals still consider the stock market as a place for gambling? Investing in high-quality business (stock) at the right price and holding them for a reasonable period is the only way for wealth creation.Written in an easy-to-understand and simple language, this book will guide you on how to select fundamentally strong business, when to buy and sell stocks and above all how to minimize or avoid loss in the stock market. Chapters- 1. How to avoid loss in the stock market? 2. Stock Market is NOT risky at all 3. First step of picking winning stocks 4. How to evaluate management? 5. Valuation - It matters much 6. When to buy and when to sell 7. Do's and don'ts to avoid loss in the stock market 8. How to construct your portfolio? 9. Is it required to follow an equity advisor? 10. Quick formula for picking winning stocks 11. Little bit of myself - Important Lessons to be learnt The book ends with a small note on "Life is not all about the stock market and money"

Genres: Finance, Nonfiction, Business, Economics, Personal Finance, Money, Indian Literature

190 pages, Kindle Edition

First published July 14, 2015

About the author

Prasenjit Paul is an stock market investor and a best selling author in India.

Reviews

[Vikas Kukreja · Rating 3 out of 5]

It's too basic and good in parts. Sometimes I felt Einstein quote ringing in my head " Make things as simple as possible and no simpler." This book suffers from making things too simple some times. But it's a good first attempt and will help beginners in stock investing.

[Shine Sebastian · Rating 4 out of 5]

" Perhaps, the stock market is the only place in the world where buyers shop less during the discount session and prefer to buy more at higher rates! "

[Milan · Rating 2 out of 5]

Nothing new here, only recommended for beginners.

[Ranvir Desai · Rating 4 out of 5]

DNF at 66%.
Not that I did not like it. Yes, the book is very informative, beginner friendly and contains simple language. I read 2/3rds this and got the idea that this book is not for reading once and be done with it. The things I was expecting was "how to choose stocks", and this book has some really good insights on it. Now my word for this should not be taken unless I back my good criticism with some profits made with these techniques. It's about practicing the concepts.

One of my biggest take-away from this book is that Market always rises, and index funds or stocks are a good option if you don't want to invest much time. Second one was that options trading should be avoided at a beginner level, and not to take "tips" from predatory self-proclaimed "experts". Also not to be reliant on news or even financial websites for a "tip". Investing in the market is, just like any other, a hard work, and if done carefully, can give good returns.

I would consider this book to have shifted my investment understanding. Only thing is that I don't have that kind of time to be spent on fundamental analysis. I will certainly give this book a read again from time to time, when my big-money waits to make more money.

That loss of one star in review is because of the writing mistakes. Also there are things that are explained one-too-many times. But there were short notes given at each chapters, that's a win for this book. Believe me, it feels like the author is your friend and is explaining the investing with some stories, and precise concepts.

Recommended to people who want to be financially conscious; not stock traders, or those who're already deep into investing. This is a good place to start, and those with a learning mind will surely benefit.

[Gokulakrishnan Viswanathan · Rating 5 out of 5]

A best sensible book for indian investors

I am a beginner in investing in stock markets and I am a beginner to reading books as well. I chose this book due to most sensible book title and gave it a read. I loved Prasenjit Paul for narrating hard subject so easy to consume for a newbie. I liked the blend of principles, reasonings, practical examples and stories author has rendered in this book. I totally enjoyed reading the book and learnt many stock lessons and started applying in baby steps.
I recommend this book to beginners in investing in stock markets to avoid loss and good journey in it.
I love you, Paul and from this book, I have great respect to you. You are one of my inspirations. I will definitely look up to you.

[Gokula Krishnan · Rating 5 out of 5]

I am a beginner in investing in stock markets and I am a beginner to reading books as well. I chose this book due to most sensible book title and gave it a read. I loved Prasenjit Paul for narrating hard subject so easy to consume for a newbie. I liked the blend of principles, reasonings, practical examples and stories author has rendered in this book. I totally enjoyed reading the book and learnt many stock lessons and started applying in baby steps.
I recommend this book to beginners in investing in stock markets to avoid loss and good journey in it.
I love you, Paul and from this book, I have great respect to you. You are one of my inspirations. I will definitely look up to you.

[Rajasekharan N · Rating 4 out of 5]

1.) The author has presented the complex subject of direct investing in stocks as simple as possible.
2.) You won't be able to find any other book in the Indian context as easily understandable as this in relation to investing directly in Indian equities yourself. If you are a novice who would like to invest in Indian equities, this is a good book to begin with.
3.) However, grammar, sentence construction, punctuation, articles, number arrangement - all are pathetic. Despite all these shortcomings, you can still understand what the author is trying to convey.
4.) Many a time, the description of incidents may seem like hindsight bias.
5.) Although the author trumpets his successful stock picks, he doesn't acknowledge/reveal his failures. Because it will affect his reputation as an equity research analyst.
6.) The author has written this book at the age of 24, with supposedly 6 years of experience in the stock market, starting from teens, 18-24, and that too he remained an engineering student from the age of 18 to 22. However, the book doesn't seem to be authored by an inexperienced person.
7.) Moreover, the motive to write the book, to not profit from selling the book but to "bring positive impact towards the financial life of many individuals," has to be appreciated. Because a stock analyst could effectively use his time and earn more in his job compared to writing a book.

[Калоян Захариев · Rating 3 out of 5]

Става. Така мога да определя книгата. Има интересни моменти, но по-голяма част от съдържанието е общо и не-особено интересни. Все пак има 20-30 страници, които определено оправдават четенето на цялата книга. Стилът на автора е приятен, четивен и определено би постигнал много ако се захване с художествена литература.

[Raghav Dhamor · Rating 5 out of 5]

Mr. Prasenjit Paul has done a terrific job.Coming from an engineering background(not from commerce) and writing a book on investing at such a young age is awe inspiring.There are not a lot of books based on indian stock market for beginner investors out there.So,this book is one of its kind and a must read for every person who wants to start investing in stock market and don't know how to pick out good stocks.

[Nilesh Suthar · Rating 4 out of 5]

An investment guide written in Indian context. It is an insightful read if you are starting your investment journey. Author has mostly taken quantitative approach to analyse companies. People will find it easy to apply these techniques than detailed qualitative analysis. Although analysis should not be replaced in this fashion but can be considered.

[arpitha · Rating 4 out of 5]

Very good book for a complete newbie. If you have any knowledge about the market, then it is redundant.

[Roshani Munde · Rating 4 out of 5]

The author has tried to provide some quick steps in the simplest manner possible which will help the reader to shortlist stocks. Definitely a good book however strictly for beginners.

[Vaibhav Diwakar · Rating 5 out of 5]

I was actually looking for a book which taught me about retail investing clearly, in Indian context, and it satisfactorily delivers on that front. It taught me several important stuffs about how Indian stock market works while keeping me excited throughout the length of the book.
Great book. Liked it a lot.

[Pruthvi · Rating 5 out of 5]

One of few good books written with focus on Indian Markets. Simple yet powerful value/quality investing philosophy explained very well with examples from Indian stocks. Must read book for both beginners as well as professionals in in the industry.

[Saurabh Yadav · Rating 5 out of 5]

1. This is very good starter book for beginner small retail investors.
2. This book carries fundamentals of picking stocks from group of 5000+ stocks. I wish i had it before jumping into market.
3. Method is simple, Language is easy to grasp, peppered with examples and datas from real market.
4. My only criticism will be if author had provided with more examples of mistakes in one's portfolios and other examples of succes when followed the method.



PS:I will be applying the principals written in this book in coming days will update on the results.

[Shahnawaz Haque · Rating 4 out of 5]

This book is a must read for all retail investors venturing into stock market specifically India.The author has used simplified language to explain various terminology instead of impressing reader with fancy terms commonly popular among MBAs. Author has been instrumental in framing various thumb rules backed by logical explanations to safeguard your portfolio against losses no matter what happens with the stock market.Simplified tactics have been devised while choosing a stock, in author terms "Quality Stock" to ensure profitability over long term.There is hardly any area which have been forgotten to cover for a retail investor. Author has also considered the human behavior related to stock purchase and sell which in most cases is the underlying cause for growing losses holding a stock.
Although i am not sure how the strategies suggested will change 10-15 years from now considering the rapid technological change affecting business, but with firm understanding of basic fundamental and tweaking your tactics little bit you will continue safeguarding and expanding your investments for the years to come.
You will frequently encounter same sentences being used by author but i take that on a positive note as it works as a catalyst to change your thought process.Happy Investing :)
Quote i liked "Valuation is an art, not a science"

PS - For readers who usually take pride in going through sophisticated english words please stay away from this book and keep scratching your heads with hundreds of books available on investment strategies in stock market.

[Deevy Patel · Rating 4 out of 5]

This book is perfect for the beginners. I on the other hand had basics in place about investing so I naturally was of mind to read this fast and I did manage to complete it thanks to lots of free time at hand.
Quick words; pick this if you are someone who is starting at a very basic level or just a rookie. Having said that I shall also point out that this book had all the fundamentals in place. The author is a genuine person who grew up investing in Indian market and talks about many stories from his experience journey which is helpful.

However it's far too stretched out and many times throughout the book you find author repeating same ideas. I don't think that's all negative if you are beginners it can help you absorb it fully.

The checklist in the end is neat and simple which can be followed to strike out all junks but you need for data crunching to spot the gems. Misses on a whole lot of suggestions which are useful for beginners like reading annual reports and going around balance sheets.

So inshort the book just draws parallels with border outline of things you need to follow to avoid loss but can't say much about earning consistently.

[Praveena D.M. · Rating 5 out of 5]

If you are interested in investing in stock market, read this book. Author doesn't make any tall promises like how to make 1 crore in 1 year etc. This is the best book to start your investing. Author gave examples of lot of Indian companies so which makes you to understand the book in proper way. Author has a credible name in the private equity adviser circle and very much practical in terms of returns expectation.

If I had read this book before starting my investment, I wouldn't have lost more than 80% of my capital in less than three months. Sometimes, I had thoughts of leaving the markets forever.

I suggest you to read this book first then to read "Intelligent Investor" by Graham.

This is not the right book for an experienced investor.

[Sandesh Kamble · Rating 5 out of 5]

The book completely about Indian market and following the concepts of gurus like Warren Buffet, Graham. For me this book actually gave me proper direction for my own research and till date am successful. This book helped me to understand where I was failing and what mistakes I was doing while researching the stocks. This book can be considered as a combination of few best seller books but with Indian companies provided as an example which will help the reader to understand in better way.
I highly recommend this book especially for those who are new in market or have 3-4 years of experience and still not found the right direction in their research.

[Ankush · Rating 4 out of 5]

It's a must-read for beginners. The great thing about the book is that it's focused on the Indian market. It teaches the art of investing step by step. The book is written in a very simple language and can be easily understood by an amateur investor.

[Vishal Gupta · Rating 4 out of 5]

good basic book on investing coming from a person who himself runs a advisory firm. so useful book

[Kishor Patil · Rating 5 out of 5]

Must read book for every stock investor in indian market...

[Suproteek Chowdhury · Rating 5 out of 5]

This was the author's first book on investing, and it seemed as if Prasenjit was already some 5 books old when he wrote it, because of the powerful and eye opening insights it had and the easy and flowing way of explaining a complex subject like stock market investing, which made for a compelling read. But then, it was partly true, Prasenjit was already into investing for a long time and successfully so by the time he wrote it, and hence the book is so powerful on a debut. It's a very rare feat among authors of any subject, let alone the minutely scrutinized subject of stock investing!

It's a must in the bookshelves of anyone wanting to succeed in investing in the Indian markets and in general anywhere as it teaches universal investing basics and ethos. The principles and fundamentals discussed are on point for your financial education, one of the most important education everyone should get and which our academia will never teach. I can confidently say all this because I have benefitted in direct monetary terms by the book.

This book goes deep into the rationale behind how we choose stocks, when to enter and exit, all based on simple basic fundamentals which most investors are ignorant about or neglect, making stock investing a dangerous gamble, the book shows the scientific and correct way to achieve manifold growth in your wealth, it is not a get rich quick scheme and needs diligence like all correct money making efforts need, but with the correct smart work to not work harder than needed and achieve financial freedom. It is proven by the fact that the book has been a bestseller since it came out, the genuine reviews prove it too.

His second book, "Multibagger Stocks" is as much a success and goes deeper into the intricacies of finding Multibaggers in small cap stocks, which is seemingly a tougher art than finding needles in haystacks as most small cap stocks are trash, it should be read as well for a comprehensive view on stock investing by the author and to graduate slowly from healthy returns to multifold returns.
These books are the real investments for potential multifold returns. Go for them, you'd thank yourself for it.

[Srinath · Rating 3 out of 5]

Beginner level book for stock market. Covers a lots of basic concepts and as the title suggests, it's really a practical guide to small investors. Content wise it's 4/5. I found some redundant/basic material as I read few books in this genre.

While reading, I understood that the author is in favor of "Growth Stocks" and the recommendations he made are inline with that philosophy. However, there are few issues if we closely observe:

1. He makes a claim that if you chose a quality stock, then any price is a good price to buy. Inherently, it's known as "Quality premium" i.e you are paying something more to get higher returns
2. But again, he mentions about the 2000-2006 slowdown and fall of Infosys despite great balance sheets. By looking at balance sheets, it qualifies to be a great/quality stock, yet didn't produce high returns

Well, he may argue that we have to look at PE and Average PE of the company to make the purchases, and again says "Buying stocks in the name that they are cheap isn't called value investing".

Though I learned few points from the book, I couldn't agree to every point that he had made. Maybe I'm more interested into value investing or my understanding is mistaken (I'm in learning stage :p). I personally believe that sometimes we do get quality stocks at bargain prices, so it's not always a good time to purchase a stock.

Detailed Notes: https://www.notion.so/How-to-avoid-loss-and-earn-consistently-in-stock-market-23842d55e68f4b23b9d28683c2f6e0e4

[Books_and_Chaii · Rating 4 out of 5]

From our school days we learned many subjects which are useful in one or another way in life but forgot one major skill which makes a huge difference in one’s life which is as essential as air. Our education system taught us how to earn money through our skills, but did not teach us how to generate wealth from existing money. Unfortunately, more than 90% of Canadians do not know how to manage their money or have no financial freedom.

This book is about the stock market presented in a simple way even a layman can comprehend the concepts and begins his/her journey into the stock market. The author covered all the items that a long-term investor should keep in mind before purchasing any stock. Things to be checked when selling the stocks. The best part of the book is all that is presented in the book is indicated with examples which made the reader more understandable.

He always says to stay away from Intraday and the future and options with his experience and a wonderful logic that makes readers not to go that way. As a newcomer to the stock market we fall into the traps such as rich schemes and many others. The author beautifully laid out all these pitfalls and how to stay away from these kinds of misconceptions.

I highly recommend this book to people who don't know abc’s of stock market, this book is definitely a starting point for journey in stock market you will become aware of many things that an investor should be aware of. If you are in the stock market for many years this would not fascinate you much but you will learn something new from author experiences and observation.
I personally loved reading this book and this is purely based on Indian Stock market.

[Aravind Balaji · Rating 5 out of 5]

This is the "Indian stock market for dummies" version of book written by a practical investor Prasenjith who gives a great walk through on different factors that you can consider to identify a good stock and how to avoid the bad ones.

While other financial books get into the history and detail of the stocks which after a times hits a wall, Prasenjith takes a practical teach with example approach to explain the concepts. He talks about PE ratio, Debt to equity ratio, Share holding pattern and Balance sheets in a very easy to understand manner.

For anyone starting out in the indian stock market, i would highly highly recommend this to be your first book to read. The English is simple, concepts are crisp and you will finish the book with confidence having learnt a lot of things from your existing mistakes you made. Fantastic book.

[L XAVIER · Rating 5 out of 5]

Really an amazing book for people who do not know how to start or where to start in stock market. This is about Indian Stock Market and hence I found it really interesting. The author gives a very practical, clear logic on selecting stocks, do's and don't's in stock market for a beginner. He insists that one has to spend 4 to 5 years to master the art of stock trading and he touches upon almost all of the mistakes retail investors do and how to avoid them.
This attempt by the author to write this book is really commendable and it definitely gives the initial guidance for anyone who would like to passionately explore and invest in stock market. We need more and more of such books exclusively on Indian market from expert investors.

[Abhra Ghosh · Rating 3 out of 5]

A good book for absolute beginners, which could serve as a starting point in your investment journey. However, it suffers from over simplification, and reiterating on already simply explained theories just to drive it in. I personally feel that the space saved there, could have been better utilized in going over a few slightly advanced concepts.

In the era of YouTube where all this can be condensed into a 20-minute video, this book falls a little short in terms of content. It's a quick read though, which is a major pulling point, and will set you up with the basics, and on your way to exploring more advanced concepts before actually applying them into investing.

I would recommend this book to anyone, who is looking for a starting point in the Indian stock markets.

[Sahil Gupta · Rating 4 out of 5]

Few observations:

1. Author has done detailed research on the book and it reflects
2. The fact that the author is emphasizing that do not trade rather invest, I don't completely agree with it - I feel it should be earn from trading and invest that amount
3. The author is totally focusing on investing rather than trading however being a passionate trader, I beg to differ
4. Overall, a very good read and very easy to understand book on picking stocks and understanding fundamental analysis
5. DO READ "The 2 minute Quick Formula" in the last chapter. It's worth it.

I like the quote:
" Do no trade like an investor and do not invest like a trader"

[Vishal · Rating 4 out of 5]

It's a good read for those who are interested in investing directly in equity. It provides some interesting insights into stock selection, evaluating management, valuating the company, when to buy and when to sell, do's and dont's of the stock market and constructing your portfolio. However, having said that it doesn't provide in-depth insight into proper steps for selecting the right stocks. There are few ratios that have been highlighted but equity investing (from personal experience) is not that straight forward. But it's still a good attempt by the author and can help refresh your memory with key aspects.