The Basis of Muhurat Trading & Top Picks.

In very ancient times the economy of India was primarily centred in village, each village being more or less a self sufficient unit as far as the needs and requirements of the days and times were concerned. There used to be a money lender at the centre of all human activities, both as a monitor and investor, with pawning and morality being the basis of security.

All the human activities from agriculture to trading goods and services thrived well and the system was more or less as perfect as modern Capitalism except for the problem of redistribution of Capital that still persists in the modern global world.

Money used to get accumulated at one place like Euro got accumulated in Germany during the Euro crisis and USD got accumulated in China in the severe financial crisis in USA. But the money lender, not being as big as the Wall Street Banks, which are believed to be too big to fail, had this tradition of reviewing his books as did all the other business men. For this purpose, the Books of Account were closed every year which mostly meant scanning the accounts and pruning the bad investments and also deciding which loans were to be carried over to next year’s books and which were to be written off. All the bad loans and bad investments were written off and booked as losses. Either the items pawned were sold or else the loans were simply forgiven if they happened to be due to nature’s fury. Only the knowledge of how and why the loans or investments went bad was carried over to ensure non-repetition of mistakes.

The day of closing of accounts and beginning of new year was and is celebrated as Diwali which marks the beginning of New Year for Gujarati, Marwari and other business communities in India. Since very ancient times, this day involves the closing of annual account books and opening of books for the next financial year. It has been considered as an auspicious day to start something new, mostly for fresh new investments.

The Indian year 2071 begins on October 24 2014 and in line with the age old tradition, the stock market will open today on October 23 2014 for 75 minutes from 6.15 pm to 7.30 pm for what is called Muhurat trading, where people make new small token investments for the auspicious value of the time.

We advise the followers of this blog to rid their portfolios of all the non-performing stocks in Muhurat trading and forget them as unfortunate losses by celebrating Diwali, the festival of lights, with their family, friends and relatives.

In addition to getting rid of the non-performers and loss makers, we recommend that they may initiate purchase of Marico Industries by placing bids at 292.45, 258.75 and 244.90 in small quantities.

The short-term traders may go long in Tata Motors with strict stop loss at 512.

Disclaimer: The writers of this column do not personally hold any stock or position in the F&O market and do not intend to benefit in any way by publishing this column. The final discretion is that of the reader and we disown any responsibility for any loss incurred by the reader.