Taking stock of the market: Bull run boosts finance literacy programmes
NEW DELHI: Kanika Bhaskar, a resident of Nirman Vihar in east Delhi, expounds stock market trading concepts such as risk management, position-sizing, and stop-loss, among others like a seasoned professional. It is quite a feat considering that until last year she was running her family’s office furniture business with her husband, and did not even know what BSE (Bombay Stock Exchange) or NSE ( National Stock Exchange) are.
“All I knew was that there are companies and there are stocks. But during the lockdown, our business came to a halt, and I was free. That is when a friend told me that she was earning ₹45,000 a day from the market; I was intrigued and wanted to know more about it. And so in December last year, I joined an in-class stock market course,” Bhaskar.
She has since attended three courses—one in-class and two online and has read several books on stock market trading. “I did a lot of paper practice before I made my first investment in July this year. “Today, I am totally occupied with the stock market and making decent money,” she says.
She is not the only one. Thousands of people from varied backgrounds are attending stock market courses—both offline and online.
Finance institutes across the city, which earlier catered to students of commerce and business, now have engineers, doctors, housewives, retired people attending their stock market courses that cost anything between ₹10,000 to ₹40,000. Stock market gurus offering private classes and workshops too are flourishing like never before.
The curriculum of these courses includes how to operate a demat account, place different kinds of orders, equity market analysis, and use various technical analysis tools to make trading decisions, among others.
Retail investor interest in stock trading up
The growing interest in the stock market is also reflected by the fact that the number of demat accounts in the country has almost doubled from 35 million in March 2020 to a record high at 62.2 million at the end of June 2021.
More than 5.8 million new demat accounts were created in the September quarter this year, according to data from CDSL and NSDL. Retail investors cumulatively owned a record 7.18% of all listed companies on the National Stock Exchange (NSE) in the June quarter this year—an increase from their 6.96% holding in the March quarter.
The new and aspiring retail investors are fuelling demand for stock market education, says the owners of these stock market institutes.
“Today, 80% of our students are people who have no background in finance. These include doctors and even DTC drivers,” says Aryan Sharma, who heads the Laxmi Nagar branch of the National Institute of Financial Markets (NIFM), a private financial market institute.
The institute’s walls are plastered with posters, including one featuring Microsoft founder Bill Gates with a quote: ‘If you are born poor, it is not your mistake, but if you die poor, it is your mistake.’
“This is to inspire people to believe that the stock market can help you become rich,” says Sharma. “But making money from the market is a science and art and one requires patience and perseverance to master it.”
It is 10am, the time for his first class of the day for the students pursuing a course called Certified Advanced Level Smart Investor.
And today’s lesson is about analysing candlestick charts to determine the possible price movement of stocks based on past patterns. The class, which has about 25 students, includes young businessmen, an aspiring restaurateur who wants to learn an extra skill; two mechanical engineers, who have given up their career in engineering to make a living as stock traders.
The compact air-conditioned classroom has an LED TV and whiteboard. Each student has a laptop and notebook and is listening intently as Sharma explains candlestick patterns – from bullish to bearish -- on the TV screen.
“Essentially I teach my students how to understand the behaviour and psychology of the market. And I tell them that when others are fearful of the market you should be greedy and when others are greedy, you should be fearful,” adds Sharma, a cost accountant by profession and a stock market teacher for a decade.
“Many of our students who knew nothing about the market when they joined today are confident traders.”
Saurabh Tiwari, a mechanical engineer in Sharma’s class, says that he wanted to do something of his own and recently gave up his job with a multinational company to try his luck as a trader.
“The pandemic made me realise that all jobs are dicey and it is better to be on your own,” says Tiwari, who has been attending the in-class trading lessons for the past two months. “I think I have made fairly good progress; my background in mechanical engineering will help me use various technical analysis tools to make trading decisions. I have no plans to return to engineering.”
Praveen Baghel is another mechanical engineer in the class. He says he was inspired by his cousin brothers to try his luck in the market.
“During the pandemic, stock market was open when all businesses were shut and I saw my brothers making a lot of money. I asked them to teach me the basics, but they said they did not have time and so I joined this course,” says Baghel.
“In life, one should acquire as many extra skills as possible and with India’s economic growth story continuing to be exciting, stock market trading is an important skill that will hold you in good stead when nothing else is working.”
Manish Taneja, the senior analyst at IFMC (Institute of Financial Market Courses) another Delhi institute in Lajpat Nagar offering in-class, live web classes and online recorded lessons in stock market trading, says a lot of his students are people from the travel and hospitality industry who lost their jobs, and also those who had huge salary cuts during the pandemic.
But then these institutes also have those looking to supplement their income. Manoj Tiwari, a Delhi-based software engineer is one such person. Last year in September, inspired by a friend, he made an investment in the stock market and suffered a loss.
He decided to join an in-class course in a Laxmi Nagar Institute before making another investment.
“Today, I know how the market will behave. I am mostly into option selling and earn decently in addition to my salary,” says Tiwari.
What sets each institute apart
Each of these stock market institutes claims to teach their own unique tricks of trading. Manish Taneja, for example, teaches what he calls Uni-Directional Trade Strategy (UDTS)-- a copyrighted course on stock trading strategies for both beginners and traders.
“We have developed this revolutionary tool to give traders and first-time investors freedom from cumbersome analysis and make stock trading simple,” says Taneja, who worked with a brokerage firm in Delhi before he co-founded IFMC.
Not just in-person classes, workshops, both online and offline, are flourishing too. Ravi Kumar, a stock market guru, who has been busy imparting lessons on the stock market through his two-day workshops and three months’ online ‘master classes’ since 2013 , says the number of people in his workshop and classes has doubled in the past one and a half years. This month he has already organised five workshops in Delhi, Gurugram and other cities in hotels, clubs, auditoriums. About 13,000 people, he says, have attended his workshops in the past one and a half year.
“Among them are 12-yearolds to 80-year olds. Parents are sending their young children as they believe stock trading is science and not gambling as it was considered earlier. Now stock trading is almost as popular with children as coding,” says Kumar, a PhD in Business Finance and Wealth Management from the University of Southern California.
“I have offered private stock market lessons to CEOs of top companies. Making money in the stock market is as easy as making a cup of coffee if you learn how to read the pulse of the market.”