Is investing in blue chips (Stocks) wise?

The term "blue-blooded" is often used to describe a person of royal descent. Blue chips - a term given to certain stocks - denotes the identical connotation in the stock family. Blue chips are supposed to be the best stocks you can possibly own.

They are supposed to be solid, dependable stocks that will deliver good returns year after year to investors. A few obvious ones that come to mind are Infosys, Wipro, Tata Steel and ITC.

What's great about them?

Blue chips are the darling of investors for a number of reasons. They have a large market capitalisation. If the number of shares in a company is multiplied by its current price, the result is market capitalisation. A large market cap indicates a highly liquid stock. Liquidity refers to the ease with which an instrument can be converted into cash at a reasonable price. A stock with high liquidity means that individuals can easily buy and sell it as there are always sellers and buyers for these stocks. And, it also indicates that large amount of shares can be bought and sold without significantly impacting its price. So even mutual funds and institutional investors can hold huge chunks of these shares and it will not have an adverse affect on the liquidity. Blue chips are generally the most liquid stocks. Size does matter They are among the largest companies in their respective sectors. By virtue of their size, they are more stable than the smaller players. Hence, they are not very volatile. So, if you do not want a company showing a great performance in one year and plummeting the next, this one is your cup of tea. This makes them a favourite with conservative investors.

Forever safe?

Not really. A blue chip today could become a dud tomorrow. Remember, there is always a risk associated with stocks.

Though the risk with a blue chip will be much less than the risk of a mid-cap or small cap. In fact, the term blue-chip is derived from poker where the highest and most valuable chip is blue. Got it? Stocks are a gamble. It is just that blue-chips are a safer bet. How many of us remember that Bombay Dyeing once used to be a blue chip? Or Century Textiles? On the other hand, some of the insignificant ones of yesterday are today's blue chips. Where was Infosys a decade ago? The only constant in the market is change, and change has led, in recent times, to stalwarts like Hindustan Lever biting the dust. Conservative investors who believed that this multinational stock was one of the bluest of blue chips would have lost quite a lot of money.

How do you spot a blue chip?

As a practical definition, being included in the Sensex can be taken as a big step towards acquiring blue chip status. Generally, a blue chip has a history of solid earnings, regular and increasing dividends, and an impeccable balance sheet. One way of considering whether a stock is a blue chip or not---a method often adopted by long-term investors such as pension funds---is to decide whether a company is still likely to be at the top of its sector 10 years down the line. If you're more or less certain of that, then day-to-day or even month-to-month fluctuations in the market won't bother you.

Should you invest in a blue chip?

In the current craze of everyone running to invest in a mid-cap or small-cap, this question does come to mind. The answer is clear: of course you should. Though chances are that you may make much more money investing in a mid-cap. That is because these are stocks that are usually low-priced because investors haven't yet discovered their potential. To understand more on mid-caps, read Why mid-caps are hot. Mid-caps have the potential to be tomorrow's blue chips. But, then again, they may not. Hence, mid-caps and small caps carry a higher risk than blue chips. Also, their earnings are much more volatile and neither are they as liquid. If you want to invest in shares but are not too savvy with the market, then blue chips are your best bet. Even if you want to invest in mid-caps and small caps, ensure that you have a few blue chips too to balance your risk. But it's absolutely essential to monitor your investments and get out of those stocks that aren't doing well, regardless of whether they once had a reputation as blue chips. And remember, it's not enough to be a good company---it must also be available at a decent price. During a market boom, prices are often ramped up so high that it isn't worthwhile to buy stocks for the long-term at those levels. Don't be under the mistaken notion that whatever be the price of a blue chip, it is worth buying.

INCREDIBLE INDIA

We live in a nation where pizza reaches home faster than ambulance & police. Where you can get car loan @ 8% but education loan at 12%. 76 police men were killed mercilessly but media is busy showing the news of marriage of failed sports persons. Where pulses are 70 Rs/kg but Sim cards are free. Where a millionaire can buy a cricket team instead of donating money in charity. Where everybody wants to be famous but nobody wants to follow the path to be famous. Where people sitting at tea stall reading an article about child labour say ”yaar bacho se kam karwane walo ko fansi par latka dena chaiye” & then they shout “CHHOTU do chai la”.

It is the country where the politicians are given right to stand in the elections depending on their capability to suck poor people’s blood. Where news channels have now hired fiction writers instead of reporters. Where people watch “Balika Vadhu” more than their own children. Where many people are spending and many people are robbing on the name of god. Some people are living in heaven of earth, whereas some are deprived of hell even. Where the people are less disturbed due to their own problems and more disturbed due to some other’s joy.

Har pet me hoga ann,
Khaadi dhaap legi har tann,
Na hoga mann me kisi ke bair,
Na karega fir raz ham par koi gair,
Ye tha ek sapna Gandhi ka,
Ya rab karna ham pe khair.

The country is at that stage where people don’t hesitate to abuse for a single time while reading about this great man in the history books. But they can spend hours reading the magazines. It is the country where you can ensure your safety more and more as you flip to big and bigger crimes. Where Supreme Courts could save the fundamental rights of super criminals by prohibiting Narco test, but they are blind to see the rights of the persons who suffer a lot due to them. If you could give some bucks to a policeman, then you are the honorable person, otherwise you are the most dangerous criminal on the entire earth.

People are busier in criticizing the male Indian cricket team due to their performance in T20 world cup, rather than appreciating the performance of female Indian cricket team in the female T20 world cup. Where people can complaint on the cleaning of roads, but nobody bothers to throw the waste in the dustbin. Where the persons driving slower than 80 km/hr aren’t considered good drivers. Where nobody could give a single pie to a needy person, people spend a lot of money in the clubs and bars. And the last, but not leastà India’s EDUCATION system, where all students except 90% scorer are dumb and rest you know…

But it’s not that we must leave India and live somewhere else. The conditions in other countries are no better than here. So, guys, please try to understand the problems of your own country and try to find a solution to them. And also please, when you’ll be some big man like mentioned above, remember the things they do today and try not to repeat them and make your own way to help the humankind in this still beautiful world.

Kyon marte ho bewafa sanam k liye.???
Marna hai to maro hamare watan k liye,
Aise to do gajj zameen bhi nahi milegi dafan ke liye
Desh k liye maroge to hasinaye bhi
Dupatta utar degi kafan k liye…

Where is the Leader?

The worst of times brings out the best from a true leader, someone who, with political skill and a higher sense of national interest, turns adversity into advantage. India, a nation bruised and gasping for some fresh air, should be a challenge as well as an opportunity for such a leader.

We miss him so badly, and what we have instead are seasoned ventriloquists and masters of triangulation. Their art only makes the life of the Republic, emerging from a merciless summer with bloodlust as its abiding motif, more miserable. We still don't have a clear, no nonsense, counter strategy to end the sub-rural savagery of the Maoists who have declared war on India.

We are caught between sentimentalism and tentative nationalism as the valley of Kashmir becomes the stage for a local variation of intifada. We have no forward-looking economic agenda, and, in the name of social justice, we continue to be subjected to the worst forms of political dishonesties. We have a government with a blurred vision, with a cluttered mind. It is a government suffering from conviction deficiency.

It is presided over by a man feted elsewhere at the global high tables as the wise man from the East. And Prime Minister Manmohan Singh with his cultivated professorial gravitas plays the role to perfection. In a world where some of the most powerful leaders are in their 40s, he is perhaps worthy of being indulged as an elder statesman.

We need one at home too, for Manmohan looks invariably out of place whenever he is faced with national emergencies that demand the best from the prime minister of a country whose international aspirations are not matched by its domestic performance. The reality is: he is the hapless master of an unwieldy, Babelic house.

That is why, on an issue like the Maoist attacks that would have put any other civilised nation on war alert, the home minister is a lonely warrior. It should not be the concern of just one department or the affected state; it should be an occasion for showing the necessary political will to face up to the enemy. The Manmohan regime doesn't know whether it is an ngo with a mushy humanitarian agenda or a government whose allegiance is to an India under attack.

This confusion only brings out an absence of conviction-and a singular political authority. It shows in a series of policy mishaps, ranging from the Maoists to Kashmir to Telangana, and none of which can be wished away as mere local disturbances. Most tellingly, in this season of inflation and bad economic management, the original reformer seems to have run out of ideas.

Even on the social agenda, the pet project of the prime minister's political boss, apart from providing employment opportunities to left-liberal freelancers, there is more verbiage than action. And Manmohan the global wise counsellor has not come out with a policy on our near abroad that strikes a balance between national interest and international responsibility either. He has lost the momentum.

It is, in the end, all about leadership. The UPA has the mandate and the doctor has the stature; what is not there is political conviction. The prime minister, though a fast learner in politics, cannot cope with the politicking within his own Cabinet, which at times resembles a group of incompatibles undermining each other.

The prime minister may be a sobering, reassuring presence, but why he is still not rising from being the leader of the Government to become the leader of the nation is partly explained by the power matrix within the UPA and his own back story as a dutiful, apolitical manager who is at his best when supervised.

It is his sixth year as the prime minister of the world's most volatile-and unforgiving-democracy, and Manmohan has got the political context to make a deal with history. What he needs is a text that can redeem India-and himself.

PLEA

I feel at times that you hardly exist

Or u are there but taking a long to mix

I wonder do I have anybody around my stiff

I get the answer to remain calm & in bliss

But I don’t understand why me & only me in every mess fix

What ills have I done behind all these kills?

To retain up I must say I am child yours still

Folding my hands rueful I feel

To whom should I go & ask for the heel

Then I myself get the answer that You are there to peel

Waiting for the unexpected to happen with zeal

To make me relieve a bit happens for a veer

This leaves me on my cheek with a leer

Again I start living in a reel

Oh lord! How long will it take to stop this meal?

Soon I start shedding all this creep

And I try hard to walk in this sea

Again the vicious circle starts with the speed

And again I wonder why me & me in every awful deed

Well I know it will happen till the end of my breathe

It’s regrettable that at times I forget about that HOLY BEING

But like every Lilliput thing is destined, by the DIVINE BEING

I must say my happening also have some cause good n green

I’ll wait till I realize myself that everything will soothe me & freeze…