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How to make money in 'Bear Market'

A unique way to make money in BEAR Market.

Step 1: Suppose you have 1L Rs. to invest in bear market.(Always have some spare money for crises like situation in market.)

Step 2: A day before market opening bell, list down some of the stocks which are facing probe for any reasons:

Ex: As on 10/03/2018 some of the ongoing probes are as follows:

  1. SEBI directs Tata Motors to probe leak of quarterly earnings data on WhatsApp

  2. Sun Pharma gets 3 observations from USFDA for Halol plant

  3. PNB is still into probe for 13.5k Cr. Scam.

  4. Aurobindo Pharma unit gets 9 observations from USFDA

  5. RBI slaps Rs 3 cr penalty on Axis Bank

  6. Gitanjali Gems (No need to explain about its probe).

Note down these stock name and monitor what is happening. No matter whether the market is in uptrend or downtrend, these stocks will play their roles separately.

Step 3: On the day of opening bell ( next day) SHORT the stock.

Short Selling : ‘Short-selling is the practice where an investor sells shares that he does not own at the time of selling them. He sells them in the hope that the price of those shares will decline, and he will profit by buying back those shares at a lower price.’

Example : You believe that stock A, which is trading at Rs. 50, will decline in price. You sold 2000 stocks ( without even owning it). As expected if price comes to 45 Rs. now you immediately buy 2000 stocks to neutralize the trade with profit of (50–45)*2000 => 10,000 Rs.

To become a successful trader, you have to put so many things in your mind, simultaneously.

Major events like BREXIT, REXIT, Trump’s victory, Demonetization broadly affected the market that traders made a lot of money by ‘Short Selling’.

Ray Dalio, the founder of investment firm Bridgewater Associates, one of the world's largest hedge funds made 10% profit on his multi billion dollar investment at the time of major crises of 2008. His assets under management grew from US$5 billion in the mid-1990s to US$38 billion by the year 2003. Although he didn’t disclose his strategy but we can deny the fact that he might had used ‘Short Selling’ too.

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