Disk Quota and Encryotion

http://uploadingit.com/file/view/4u2v9ppr7thyt000/Disk%20Quota%20%26%20Encryption.docx


Disk Quota & Encryption 

Arrested "Happy Hacker" is the ZeuS Botnet Mastermind.

Last week, Happy Hacker arrested in Thailand on charges of stealing millions from online bank accounts. According to new reports same hacker alleged as ZeuS Mastermind and used to have the profile of a miscreant nicknamed “bx1,” a hacker fingered by Microsoft before as a major operator of botnets powered by the ZeuS banking trojan.

He remained smiling throughout a press conference in which Thai police explained that Thailand will seek to extradite Mr Bendelladj to the US state of Georgia, where a court has issued a warrant for his arrest.

24-year-old Algerian Hacker , Hamza Bendelladj arrested at a Bangkok airport enroute from Malaysia to Egypt. The ZeuS botnet is one of the most notorious in existence, and it’s also one that has earned its masters some pretty massive payouts.

The Email ID's daniel.h.b@universityofsutton.com, and danieldelcore@hotmail.com mentioned by Microsoft in a complaint submitted to the U.S. District Court for the Eastern District of Virginia, appear to be linked to the man.

Mr Bendelladj, who graduated in computer sciences in Algeria in 2008, has allegedly hacked private accounts in 217 banks and financial companies worldwide

Anonymous hacks 2 MIT websites in the memory of web activist Aaron Swartz

In the memory of Aaron Swartz, The Hacktivist group Anonymous hacks (defaced) in to two MIT websites and leaves a Message for Aaron Swartz.

The 26-year-old Aaron Swartz, who committed suicide just 2 days back was arrested in July 2011 and accused of stealing 4 million documents from MIT and JSTOR, an archive of scientific journals and academic papers.

JSTOR had dropped the charges after the digital copies of the articles were returned. However the MIT (Massachusetts Institute of Technology) did not do the same and decided to continue with charges against him. If convicted He would have faced $4 million in fines and more than 50 years in prison. His trial was set to begin this April. Unfortunately On Friday evening, Swartz was found dead in his apartment.

Anonymous decided to attack only hours after MIT released a statement on Swartz’s death, announcing it would launch an internal investigation on the events that led up to Swartz’ passing.

The group wrote in the message:

“Whether or not the government contributed to his suicide, the government’s 
prosecution of Swartz was a grotesque miscarriage of justice, a distorted 
and perverse shadow of the justice Aaron died fighting for” 

Anonymous also called for a reform of computer crime laws, copyright and intellectual property laws, and a renewal of a commitment to a “free and unfettered internet.

The 2 hacked Websites are:
1) http://cogen.mit.edu/ (Now restored)
2) http://rledev.mit.edu/aaron.html

Aaron Swartz:
 

(November 8, 1986 – January 11, 2013)
Aaron Swartz was computer programmer, writer, archivist, political organizer, and Internet activist. He was a co-founder of Reddit.com, helped create RSS and was know as Internet freedom activist. He was also one ff The Earliest Google Bloggers. Swartz also focused on sociology, civic awareness and activism

Create Rage Faces in Facebook Chat

Send some awesome Rage Faces to your friends in Facebook chat, if you do not know what I taking about you can check below image what type of images you can send to all your friends.


So now to send any image like above in Facebook chat you simply have to enter the codes below and than hit enter to send it to your friend.

* Troll face: [[171108522930776]]
* ARE YOU FUCKING KIDDING ME: [[143220739082110]]
* Not bad Obama: [[169919399735055]]
* Me Gusta: [[211782832186415]]
* Mother of God: [[142670085793927]]
* Cereal Guy: [[170815706323196]]
* LOL Face: [[168456309878025]]
* NO Guy: [[167359756658519]]
* Yao Ming: [[218595638164996]]
* Derp: [[224812970902314]]
* Derpina: [[192644604154319]]
* Forever Alone: [[177903015598419]]
* Not Bad: [[NotBaad]]
* Fuck yeah: [[105387672833401]]
* Challenge accepted: [[100002727365206]]
* Okay face: [[100002752520227]]
* Dumb bitch: [[218595638164996]]
* Poker face: [[129627277060203]]
* Okay face: [[224812970902314]]
* Socially awkward penguin: [[98438140742]]
* Rage face: [[FUUUOFFICIAL]]
* Lamp: [[100001256102462]]
* No: [[167359756658519]]
* MOG: [[142670085793927]]
* Feel like a sir: [[168040846586189]]
* Forever alone Christmas: [[125038607580286]]

So now have a good Raging experience. [Source – GeekoSystem]

Awesome Tool to Create Collages from Facebook Photos

www.getloupe.com/create

Loupe is an online tool which is launched by very popular collage creating team known as Shape Collage, with this tool you can create amazing collages from your Facebook Photos. This tool simply connects with your Facebook Acc. as you need to grant it access than it crawls your all albums and gives you option to choose images from.

Using Loupe is really simply as it has a very nice interface so it will not be a tough job for you for creating a nice collage for all your friends. The best thing I liked about Loupe is that it has nice options to tweak, you can change shapes and re-assemble your images as you want.

So overall its really fun to use this service, so now just enjoy creating some cool awesome collage layouts and do share this post with all your friends.

How to Send Unlimited Free Anonymous SMS in India

Anonymous simply means masking your real identity behind anyone else so that you can do some serious mischiefs well if you love being anonymous and sending fake messages to your friends than we have found an awesome website fro all of you that is able to send unlimited message to India and that too with fake numbers so number are like with prefix of +1 so maybe they are using some USA Proxy or kind of stuff.

Also check out : How to Send Fake SMS www.axisflash.info

AxisFlash does your job in an awesome and realistic way, well its fast and sends your messages with anonymous numbers so you can make out some serious shit.

Key Features of AxisFlash :

1. Totally Anonymous.
2. Fast Delivery.
3. Only for Indian Mobile Numbers.
4. Full 160 character support.
5. Captcha Enabled.
How to Send Anonymous SMS Messages :

Well if you are interested in sending these kind of messages than you can visit this website and than you will page like above just fill out all the fields like entering Indian Mobile Number, now enter your message and than enter the Captcha, now check out if everything is done correctly and click on send and within seconds your message will be delivered.

That’s it how to send free unlimited Anonymous Messages to India, if you liked this article than do share it below with all your friends have fun :)

Computer facts....

1. The first computer mouse was invented by Doug Engelbart in around 1964 and was made of wood.

2. 80% of all pictures on the internet are of naked women.

3. Bill Gates' house was designed using a Macintosh computer.

4. For every 'normal' webpage, there are five porn pages.

5. "Stewardesses" is the longest word that is typed with only the left hand.

...............................................................................

1. On eBay, there are an average of $680 worth of transactions each second.

2. "Stewardesses" is the longest word that is typed with only the left hand.

3. 80% of all pictures on the internet are of naked women

4. In the 1980s, an IBM computer wasn't considered 100 percent compatible unless it could run Microsoft Flight Simulator*.

5. The world's first computer, called the Z1, was invented by Konrad Zuse in 1936. His next invention, the Z2 was finished in 1939 and was the first fully functioning electro-mechanical computer.

21 6. The first computer mouse was invented by Doug Engelbart in around 1964 and was made of wood.

7. Domain names are being registered at a rate of more than one million names every month.

8. There are approximately 1.06 billion instant messaging accounts worldwide.

9. The first banner advertising was used in 1994.

10. E-mail has been around longer than the World Wide Web.

List of World Best Top Hackers of All Time

Hackers, a group that consists of skilled computer enthusiasts. A black hat is a person who compromises the security of a computer system without permission from an authorized party, typically with malicious intent. The term white hat is used for a person who is ethically opposed to the abuse of computer systems, but is frequently no less skilled. The term cracker was coined by Richard Stallman to provide an alternative to using the existing word hacker for this meaning.The somewhat similar activity of defeating copy prevention devices in software which may or may not be legal in a country's laws is actually software cracking........

There are numbers of Hackers in the world till date, Few has become famous by their Black hat work and few of them are famous by their Ethical Hacking. Below is separate list of World's All Time Best Hackers and Crackers. Although I represent them by Hackers only because what every they did, was wrong but one thing is sure they were Brilliant. Hacking is not a work of simple mind, only Intelligent Mind can do that.

Gary McKinnon
Gary McKinnon, 40, accused of mounting the largest ever hack of United States government computer networks -- including Army, Air Force, Navy and NASA systems The court has recommended that McKinnon be extradited to the United States to face charges of illegally accessing 97 computers, causing US$700,000 (400,000 pounds; euro 588,000) in damage.


Jonathan James
The youth, known as "cOmrade" on the Internet, pleaded guilty to intercepting 3,300 email messages at one of the Defense Department's most sensitive operations and stealing data from 13 NASA computers, including some devoted to the new International Space Station. James gained notoriety when he became the first juvenile to be sent to prison for hacking. He was sentenced at 16 years old. He installed a backdoor into a Defense Threat Reduction Agency server. The DTRA is an agency of the Department of Defense charged with reducing the threat to the U.S. and its allies from nuclear, biological, chemical, conventional and special weapons. The backdoor he created enabled him to view sensitive e-mails and capture employee usernames and passwords.James also cracked into NASA computers, stealing software worth approximately $1.7 million. According to the Department of Justice, “The software supported the International Space Station’s physical environment, including control of the temperature and humidity within the living space.” NASA was forced to shut down its computer systems, ultimately racking up a $41,000 cost

Adrian Lamo
Dubbed the “homeless hacker,” he used Internet connections at Kinko’s, coffee shops and libraries to do his intrusions. In a profile article, “He Hacks by Day, Squats by Night,” Lamo reflects, “I have a laptop in Pittsburgh, a change of clothes in D.C. It kind of redefines the term multi-jurisdictional.”Dubbed the “homeless hacker,” he used Internet connections at Kinko’s, coffee shops and libraries to do his intrusions. For his intrusion at The New York Times, Lamo was ordered to pay approximately $65,000 in restitution. He was also sentenced to six months of home confinement and two years of probation, which expired January 16, 2007. Lamo is currently working as an award-winning journalist and public speaker.

FACEBOOK PASSWORD CRACKING

The firts time you should do is to know the email address used for facebook account that you want to crack.

You can get email addresses from newsgroups on google or yahoo and some chatting of the internet. When you are communicating, you can ask them their facebook account. If you already have an email account that in use on facebook, you can proceed to the following steps:

1. Download Facebook cracker at here. 5 MB of File Capacity
2.Install Java Runtime Environment (JRE). This software is available in many site on the web.
3. Open the tool and add the email you want to crack.
4. You must have a list of passwords on the notepad and add it to the password box. (FB cracker uses brute force technique to the attack .)
5. The last, cracking start ...
download from under url

http://rapidshare.com/#!download|433l34|261012027|IndoGear.Com.FB.Cracker.zip|5611

BASIC KNOWLEDGE OF PASSWORD CRACKING

Passwords are typically encrypted when they’re stored on a computer, using an encryption or one-way hash algorithm such as DES or MD5. Hashed passwords are then represented as fixed-length encrypted strings that always represent the same passwords with exactly the same strings. These hashes are irreversible for all practical purposes, so, in theory, passwords can never be decrypted. Furthermore, certain passwords such as those in Linux have a “salt” value added to them to create a degree of randomness. This prevents the same password used by two different people from having the same hash value.

Windows usually stores passwords in these locations:
• Security Accounts Manager (SAM) database
(c:\winnt\system32\config)
• Active Directory database file that’s stored locally or spread across domain controllers (ntds.dit) Windows sometimes stores passwords in either a backup of the SAM file in the c:\winnt\repair directory or on an emergency repair disk. Some Windows applications store passwords in the Registry or as plaintext files on the hard drive!
_ Linux and other UNIX variants typically store passwords in these files:
• /etc/passwd (readable by everyone)
• /etc/shadow (accessible by the system and the root account only)
• /etc/security/passwd (accessible by the system and the root account only)
• /secure/etc/passwd (accessible by the system and the root account only)

Password-Cracking Software

You can try to crack your organization’s operating system and application passwords with various password-cracking tools:

- pwdump3 extracts Windows password hashes from the SAM database.

- John the Ripper cracks hashed UNIX and Windows passwords.

- Proactive Password Auditor runs brute-force, dictionary, and rainbow cracks against extracted LM and NTLM password hashes.

- Cain and Abel cracks LM and NTLanManager (NTLM) hashes, Windows PWL passwords, Cisco IOS and PIX hashes, VNC passwords, ADIUS hashes, and more.

- RainbowCrack cracks LanManager LM) and MD5 hashes very quickly by using rainbow tables.

- Elcomsoft Distributed Password Recovery cracks Microsoft Office, PGP, and PKCS passwords in a distributed fashion using up to 2,500 networked computers at once.

- Proactive System Password Recovery recovers practically any locally stored Windows password, such as logon passwords, WEP/WPA passphrases, SYSKEY passwords, RAS/dialup/VPN passwords, and more.

- chknull checks for Novell NetWare accounts with no password.

- Pandora cracks Novell NetWare passwords online and offline

TRAINING TO BE HACKER FOR BEGINNERS

To become a competent hacker, need for training and testing, before an attack. The goal is clear, so that the victim site was not damaged. Moreover, the definition of hacker is one who can penetrate the computer system without damaging the system.

For beginner of hackers, should learn the web programming such as PHP and Javascript. On the internet, many web that offer learning web as http://www.w3schools.com/js/default.asp.

If you already understand some of the syntax, commands or code you visit on http://www.hackthissite.org to test your understanding of hacking websites. After registration you will be confronted with several missions from the basic hacking untill the most difficult. These missions are a challenge to hack with a search for security holes so we can penetrate. These missions include:


- Basic mission
- Realistic missions
- Application missions
- Programming missions
- Logic missions
- Extbasic missions
- Javascript missions
- Stego missions

7 WAYS TO HACK FACEBOOK ACCOUNT

Method of data theft on facebook is a lot of interesting things in the discuss and the search. The following ways are usually used by hackers to obtain personal information of facebook account:

1. Social engineering tools: how to trick the victim to deceptive telephone and internet media,

2. Phishing tools: deceptive actions by falsifying the original site.

3. Sniffing tools: tricks to tap information on wireless computer networks or cable, using software like Able Cain - aircrack - snort - nmap.

4. Keylogger tools. almost the same as sniffing action but straight from the source intercepts every keyboard keystrokes the victim, usually a keylogger installed on computers that have public access

5. Brute force tools. This action is a direct attack by hackers to a Web site offering profile,

6. Facebook Application tools. tricks hackers can access the necessary data to your computer when you install the application on the profile. currently there are several types on facebook apikasi dangerous values are 'the Facebook users', 'the Secret Crush Check System Error', 'My Account' and 'Rule-Breaking For reported'.

7. Exploits a vulnerability tools. This is a hacking technique which is always updated, ie by finding the weakness of the system facebook site.

9 WRONG COMMON MYTHS ABOUT COMPUTER

Wrong myths around the computer is one of miss understanding in society. Along the development of computers, not all myths are true. Here is a nine wrong myths about the computer:

1) To improve the computer speed and it’s performance, we have to upgrade his hardware. Speed computer performance, depending on several factors like software as well.

2) Good computer performance will make the faster to your Internet connection. In fact, the internet connection not only need good computer performance.

3) virus is the main thing cause disturbance on the computer. In fact, that interfere with the computer very much, including electric power and human error.

4) The more expensive computer is the better the quality. The most important thing here is the selection of types and brands of compatible hardware. So, expensive hardware if not support to other, it would trigger new problems.

6) The company should replace to new computer for two years. The most important thing is to see its usefulness. If only in use for typing course, it does not need to replace the computer.

7) Computers will last longer if the let burn.
First necessary to turn the computer on which a large electric power and to maintain the stability of the temperature inside the computer is advisable not too often turned on and off the computer. But it was no longer applicable to today's computers.

8) Hackers can cause a world war. In lot of movies or stories are often portrayed that a hacker can break through the military facilities of a country that has nuclear weapons and create interference with nuclear directs owned to another country.

9) The greater the power the CPU, the faster the computer
Many people assume greater clock speed MHZ processor is marked with the faster a computer. What exactly is the speed of a processor has very little effect on the overall performance of computers, there are still other factors are more dominant for example: cache size, graphics capabilities and hard disk access time.

9) Apple / Linux is more secure than Windows
Windows operating system is often referred to as the most vulnerable because they are making Windows as a target so 'excited' for Windows users in the world. For Mac OS X would often get security patches, though often late and for Linux was not much different.

7 CARELESSNESS OF FACEBOOK USERS

The emergence of Facebook as a leading social networking today, was not in balanced with strong security systems to personal data held by a facebook user.

According to Consumer Reports Magazine, more than half of social networking users inadvertently disclose their personal data, which can be used for evil motives. Consumer Reports Magazine revealed that seven Blunder by Facebook users:

1. Using a weak password
It should use the 8 character password that contains a combination of uppercase, lowercase, numbers and symbols.

2. Bring birth date
Date of birth should not be in the show to just anyone, because people can use to break through a credit card or bank account.

3. Ignores Privacy Control
Facebook Privacy Control serves to maximize access restrictions beyond those of personal data. because people who are not in the know will not be free to access all data on the profile and photo gallery.

4. Posting Child Name in Photo Caption
Child's name often used by a parent to make email password or his facebook account. By placing the child's name, there is an opportunity to guess passwords.

5. Citing information while traveling Far
By claiming the status of being away from home so that no one was at home today. this can be utilized person who intends evil.

6. Leaks of Personal Data on Search Engine
Your personal data may not be until the leak to the search engines like google, to do re-adjustment section 'Search' on facebook's privacy controls. Select the option 'Only Friends' and make sure that the box 'Public Search' is not checked.

7. Allowing a child to use Facebook without supervision.
Now many of the children and teenagers who use Facebook so make sure parents are always watching.

Overview of Hacker..?

The hackers used his expertise in computers to view, find and fix vulnerabilities security system in a computer system or in a software. Therefore, thanks to the hackers, the Internet is there and can we enjoy today, and even continued to be improved to become an even better system. So hackers can be referred to a hero's network is a cracker can be called a criminal network because doing do infiltration with the intent to benefit himself personality mean harming others. Hackers often called white hackers (which is the real hackers who are building) and black hackers (crackers who are dismantling and destroying).

There are 2 types of hacking:

1. Social Hacking, hacking activities will be undertaken to obtain information about what system is used by the server, who the owner of the server, who the administrator who manages the server, what type of connection used and how the server is connected to the internet, use one connection and any information provided by the server, if the server is also connected to the LAN in an organization and other information.

2. Technical Hacking, is a technical action to the infiltration into the system, either with the tool (tool) or using the facilities the system itself that is used to attack the weakness (security holes) contained in the system or service. The core of this activity is to gain full access into the system in any way and how even.

STEALING FACEBOOK ACCOUNT BY FAKE LOGIN PAGE

Currently, Facebook is the most popular of social networking site on cyber world then other.. Based on latest data of Check Facebook, the Facebook users all over the world are reach 230,379,660 users with the biggest users are from the United States of America reached 70,340,120 users. While the country with the largest growth of facebook users are Taiwan reached 15.79% of the total 102,140 users.

A large number of facebook user is one of the cyber crime target both interact through fraud in the facebook and steal the account in the experiment. For with spring a trap, then the username and password opted more and more.

Setting Up The Attack.
This tutorial will use phishing techniques that trepan facebook users included in a facebook copycat form of a trap similar to the original view facebook. If the careless, the user is stuck and Hi will enter a username and password on the login box. Tyhen the account that entered will be saved in a online file and we can check at any time and anywhere.

Here are the stepping of attacks:
1. Make a script file of fake login page. On the internet, this script is already in wide circulation. The script is divided into 2 files which contain the file in PHP called index.php and a executor file that called write.php which can be downloaded here.

2. Both files are uploaded to our web hosting that supports php language. You can search the web hosting in google. In this tutorial we use www.ripway.com. To register, click at here.

3. In the ripway, go to the My Files tab, so, the two files that we upload will appear. Well, the address of the Direct Link in the index.php file is a link that we need to steal facebook account.

Launch The Attacks.

We need to use the Address link of index.php with a little clumsy. For example if the victim was getting emails from facebook to confirm or invitation tobe friend. To further refine, can use a fake email with the sender name is admin.facebook or the other. So, the victim is not suspicious at all. To fill email content, copy and paste the confirmation email from facebook.

Or we can directly access the victim computer with changing the default address bar of the computer browser to fake facebook.

All the stolen account will be stored automatically in a file called password.txt that automatically appear in Ripway. Refresh or press F5 to see the latest account stored.

To Prevent Fake Facebook.
To prevent facebook phishing techniques is improving vigilance. The step details are as follows:

1. Answer confirmation to the people who already know us only
2. Make sure, the only original facebook address is http://www.facebook.com
3. Bookmark the original Address of facebook
4. See confirmation link. If the link is not listed in the facebook address genuine, please ignore it.the original CONFIRMATION includes the original address as : http://www.facebook.com/n/?reqs.php&mid=b676a5G6a24e19G74e2aG2
5. Always follow the improvement of cyber crime news.

Top 3 methods to hack facebook password

In this post I will tell you the Top 3 Methods Which hackers use to Hack Facebook passwords and some counter measures also to help you protect your Facebook account from Hackers. In my previous posts I have mentioned lots of techniques to Hack a Facebook Password but In this article I will highlight the most effective ones.e

A lot of people contact me about suspecting their boyfriend/girlfriend of cheating, but they are on Facebook and ask why I haven’t written a guide for hacking Facebook passwords.

The following are the methods used by most Hackers to Hack a Facebook Password
--> Keyloggers
--> Mobile Phone Spying
--> Phishing

Keyloggers(Spying Softwares)
Well keylogging is the widest and most commonly used Technique to Hack a Facebook Password. A keylogger is a piece of software used to record keystrokes( Keys that were typed) on a computer.Keyloggers support two types of monitoring depending upon their efficiency and quality


Phishing or Fake Login Pages
Studies show that over 70% of the internet accounts get hacked with this method how ever Making a Fake login pages demands the skill of PHP Coding and HTML too. In Phishing a hacker creates a Fake login page which exactly resembles to the Facebook Page and then makes the victim login through that page and thus the victim gets his/her Facebook account Hacked. To Learn more about Facebook Phishing refer my post How to hack Facebook Password



If you have any questions regarding this article feel free to comment!

,

My lines....?

If you give a hacker a new toy, the first thing he'll do is take it apart to figure out how it works.


Then again, my case was all about the misappropriation of source code because I wanted to become the best hacker in the world and I enjoyed beating the security mechanisms.


The hacker mindset doesn't actually see what happens on the other side, to the victim.

HIDE ur FILES IN A JPG FILE...>>>>

How to hide a file in image

1. Gather the file you wish to bind, and the image file, and place
them in a folder.
For the sake of this demonstration, I will be using C:\New Folder
-The image will hereby be referred to in all examples as fluffy.jpg
-The file will hereby be referred to in all examples as New Text
Document.txt

2. Add the file/files you will be injecting into the image into a
WinRar .rar or .zip.
From here on this will be referred to as (secret.rar)

3. Open command prompt by going to Start > Run > cmd

4. In Command Prompt, navigate to the folder where your two files
are by typing
cd location [ex: cd C:\New Folder]

5. Type [copy /b fluffy.jpg + secret.rar fluffy.jpg] (remove the brackets)

Congrats, as far as anyone viewing is concerned, this file looks like a JPEG,
acts like a JPEG, and is a JPEG, yet it now contains your file.

In order to view/extract your file, there are two options that you can take

a) Change the file extension from fluffy.jpg to fluffy.rar, then open and your file is there
b) Leave the file extension as is, right click, open with WinRar and your file is there

How to make money in the stock market?

Inroduction

This article is a COMPLETE guide to the basics of making money in the stock market! If you are considering investing in the stock market, you MUST read this article! We have explained all the concepts and talked about all the "myths" that people have about the stock market!

What are stocks? Definition:

Plain and simple, a “stock” is a share in the ownership of a company.

A stock represents a claim on the company's assets and earnings. As you acquire more stocks, your ownership stake in the company becomes greater.

Note: Some times different words like shares, equity, stocks etc. are used. All these words mean the same thing.


So what does ownership of a company give you?

Holding a company's stock means that you are one of the many owners (shareholders) of a company and, as such, you have a claim to everything the company owns.

This means that technically you own a tiny little piece of all the furniture, every trademark, and every contract of the company. As an owner, you are entitled to your share of the company's earnings as well.

These earnings will be given to you. These earnings are called “dividends” and are given to the shareholders from time to time.

A stock is represented by a "stock certificate". This is a piece of paper that is proof of your ownership. However, now-a-days you could also have a “demat” account. This means that there will be no “stock certificates”. Everything will be done though the computer electronically. Selling and buying stocks can be done just by a few clicks.

Being a shareholder of a public company does not mean you have a say in the day-to-day running of the business. Instead, “one vote per share” to elect the board of directors of the company at annual meetings is all you can do. For instance, being a Microsoft shareholder doesn't mean you can call up Bill Gates and tell him how you think the company should be run.

The management of the company is supposed to increase the value of the firm for shareholders. If this doesn't happen, the shareholders can vote to have the management removed. In reality, individual investors like you and I don't own enough shares to have a material influence on the company. It's really the big boys like large institutional investors and billionaire entrepreneurs who make the decisions.

For ordinary shareholders, not being able to manage the company isn't such a big deal. After all, the idea is that you don't want to have to work to make money, right? The importance of being a shareholder is that you are entitled to a portion of the company’s profits and have a claim on assets.

Profits are sometimes paid out in the form of dividends as mentioned earlier. The more shares you own, the larger the portion of the profits you get. Your claim on assets is only relevant if a company goes bankrupt. In case of liquidation, you'll receive what's left after all the creditors have been paid.

Another extremely important feature of stock is "limited liability", which means that, as an owner of a stock, you are "not personally liable" if the company is not able to pay its debts.

In other legal structures such as partnerships, if the partnership firm goes bankrupt the creditors can come after the partners “personally” and sell off their house, car, furniture, etc. To understand all this in more detail you could read our “How to incorporate?” article.

Owning stock means that, no matter what happens to the company, the maximum value you can lose is the value of your stocks. Even if a company of which you are a shareholder goes bankrupt, you can never lose your personal assets.

Why would the founders share the profits with thousands of people when they could keep profits to themselves? This is the obvious question that comes up next. This what the next section is all about!




Why does a company issue stocks?

Why would the founders share the profits with thousands of people when they could keep profits to themselves? The reason is that at some point every company needs to "raise money". To do this, companies can either borrow it from somebody or raise it by selling part of the company, which is known as issuing stock.

A company can borrow by taking a loan from a bank or by issuing bonds. Both methods come under "debt financing". On the other hand, issuing stock is called “equity financing”. Issuing stock is advantageous for the company because it does not require the company to pay back the money or make interest payments along the way.

All that the shareholders get in return for their money is the hope that the shares will someday be worth more than what they paid for them. The first sale of a stock, which is issued by the private company itself, is called the initial public offering (IPO).

It is important that you understand the distinction between a company financing through debt and financing through equity. When you buy a debt investment such as a bond, you are guaranteed the return of your money (the principal) along with promised interest payments.

This isn't the case with an equity investment. By becoming an owner, you assume the risk of the company not being successful - just as a small business owner isn't guaranteed a return, neither is a shareholder. Shareholders earn a lot if a company is successful, but they also stand to lose their entire investment if the company isn't successful.


It’s a tricky game!

Note that: There are no guarantees when it comes to individual stocks. Some companies pay out dividends, but many others do not. And there is no obligation to pay out dividends. Without dividends, an investor can make money on a stock only through its appreciation of the stock price in the open market.

On the downside, any stock may go bankrupt, in which case your investment is worth nothing.

Having understood this, we now want to know what makes stock prices rise and fall? If we know this, we will know which stocks to buy. In the next section we will try to understand what makes stock prices go up and down.

What makes stock prices go "up" and "down"?

Stock prices change every day because of market forces. By this we mean that stock prices change because of “supply and demand”. If more people want to buy a stock (demand) than sell it (supply), then the price moves up!

Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall. (Basics of economics!)

Understanding supply and demand is easy. What is difficult to understand is what makes people like a particular stock and dislike another stock. If you understand this, you will know what people are buying and what people are selling. If you know this you will know what prices go up and what prices go down!

To figure out the likes and dislikes of people, you have to figure out what news is positive for a company and what news is negative and how any news about a company will be interpreted by the people.

The most important factor that affects the value of a company is its earnings. Earnings are the profit a company makes, and in the long run no company can survive without them. It makes sense when you think about it. If a company never makes money, it isn't going to stay in business. Public companies are required to report their earnings four times a year (once each quarter).

Dalal Street watches with great attention at these times, which are referred to as earnings seasons. The reason behind this is that analysts base their future value of a company on their earnings projection.

If a company's results are better than expected, the price jumps up. If a company's results disappoint and are worse than expected, then the price will fall.

Of course, it's not just earnings that can change the feeling people have about a stock. It would be a rather simple world if this were the case! During the “dotcom bubble”, for example, the stock price of dozens of internet companies rose without ever making even the smallest profit. As we all know, these high stock prices did not hold, and most internet companies saw their values shrink to a fraction of their highs. Still, this fact demonstrates that there are factors other than current earnings that influence stocks.

So, what are "all the factors" that affect the stocks price? The best answer is that nobody really knows for sure. Some believe that it isn't possible to predict how stock prices will change, while others think that by drawing charts and looking at past price movements, you can determine when to buy and sell. The only thing we do know is that stocks are volatile and can change in price very very rapidly.

Just remember this: At the most fundamental level, supply and demand in the market determines stock price.

There are many types of techniques and methods that investors use to figure out whether a stock price will go up or down! We will try to give you an introduction to these techniques in this article.

But before we go into the concepts of stocks picking, and the techiques of analysis, let us understand one last basic thing....


What are the Sensex & the Nifty?

The Sensex is an "index". What is an index? An index is basically an indicator. It gives you a general idea about whether most of the stocks have gone up or most of the stocks have gone down.

The Sensex is an indicator of all the major companies of the BSE.

The Nifty is an indicator of all the major companies of the NSE.

If the Sensex goes up, it means that the prices of the stocks of most of the major companies on the BSE have gone up. If the Sensex goes down, this tells you that the stock price of most of the major stocks on the BSE have gone down.

Just like the Sensex represents the top stocks of the BSE, the Nifty represents the top stocks of the NSE.

Just in case you are confused, the BSE, is the Bombay Stock Exchange and the NSE is the National Stock Exchange. The BSE is situated at Bombay and the NSE is situated at Delhi. These are the major stock exchanges in the country. There are other stock exchanges like the Calcutta Stock Exchange etc. but they are not as popular as the BSE and the NSE.Most of the stock trading in the country is done though the BSE & the NSE.

Besides Sensex and the Nifty there are many other indexes. There is an index that gives you an idea about whether the mid-cap stocks go up and down. This is called the “BSE Mid-cap Index”. There are many other types of indexes.

There is an index for the metal stocks. There is an index for the FMCG stocks. There is an index for the automobile stocks etc. If you are interested in knowing how the SENSEX is actually calculated...you must check-out our "How to calculate BSE SENSEX?" article!

But, before we go ahead and try to understand "How to make money in the stock market?" you MUST read the next page....


3 important things you must know and follow as an new investor!

You need to KNOW some “unforgettable basics” before you enter the world of investing in stocks. The stock market is a field dominated by savvy investors who know the ins-and-outs of the market. For people who are not “on the inside”, the stock market can be a VERY dangerous place. :

Don't even consider "tips" that tell you about "hot stocks". Consider the source: There are many people in the market who put in all their time and effort in promoting certain stocks. They do this because they have their money invested in those stocks. If they can get enough people to buy the stock and they can get the stock price to rise, they will sell the stock for a huge price, the stock price will crash and they will walk off to promote another stock.

Always use your own brain: It's extremely important. You must always use your own brain. Relying on the advice of others, no matter how well intentioned it may be, is almost always a complete disaster. Make sure you dig in and really examine the "facts about the companies" before you invest. Ignore press releases which have very little substance, and rely on "hype" to tell the company's story.

And finally the most important tip!!!
Only invest money you can afford to lose!! Sure this is a basic point, but many many people miss it. You should only invest money that you can honestly afford to lose!! Everyone enters into investments with the idea of earning big profits, but in many cases, this never works. (Especially if you are new to investing in the stock market!)

Please understand that the above tips are tips for beginners. Once you really get into the stock market you do not need to follow these rules anymore. But if you are a new investor, you MUST follow these rules. They are for your own safety.

But then again, nothing comes free. Everything has a price. You will have to loose some money, make some bad decisions and then only will you really understand the market. You cannot understand the market by just looking at it from far. By following these rules, you will basically not loose too much!


Stock Picking - Which stocks to buy?

Having understood all the basics of the stock market and the risk involved, now we will go into stock picking and how to pick the right stock. Before picking the right stock you need to do some analysis.

There are two major types of analysis:
1. Fundamental Analysis
2. Technical Analysis

Fundamental analysis is the analysis of a stock on the basis of core financial and economic analysis to predict the movement of stocks price.

On the other hand, technical analysis is the study of prices and volume, for forecasting of future stock price or financial price movements.

Simply put, fundamental analysis looks at the actual company and tries to figure out what the company price is going to be like in the future. On the other hand technical analysis look at the stocks chart, peoples buying behavior etc. to try and figure out what the stock price is going to be like in the future.

In this article we will go into the basics of “fundamental analysis”. Technical analysis is a little more complicated. It is much more of an "art" than a science. It depends more on experience and involves some statistics and mathematics, so explaining technical analysis is out of the scope of this article.

The Basics of Fundamental Analysis
Fundamental Analysis Definition

Fundamental analysis is a stock valuation method that uses financial and economic analysis to predict the movement of stock prices.

The fundamental information that is analyzed can include a company's financial reports, and non-financial information such as estimates of the growth of demand for products sold by the company, industry comparisons, and economy-wide changes, changes in government policies etc..

General Strategy

To a fundamentalist, the market price of a stock tends to move towards it's “real value” or “intrinsic value”. If the “intrinsic/real value” of a stock is above the current market price, the investor would purchase the stock because he knows that the stock price would rise and move towards its “intrinsic or real value”

If the intrinsic value of a stock was below the market price, the investor would sell the stock because he knows that the stock price is going to fall and come closer to its intrinsic value.

All this seems simple. Now the next obvious question is how do you find out what the intrinsic value of a company is? Once you know this, you will be able to compare this price to the market price of the company and decide whether you want to buy it (or sell it if you already own that stock).

To start finding out the intrinsic value, the fundamentalist analyzer makes an examination of the current and future overall health of the economy as a whole.

After you analyzed the overall economy, you have to analyze firm you are interested in. You should analyze factors that give the firm a competitive advantage in it’s sector such as management experience, history of performance, growth potential, low cost producer, brand name etc. Find out as much as possible about the company and their products.

Do they have any “core competency” or “fundamental strength” that puts them ahead of all the other competing firms?

What advantage do they have over their competing firms?

Do they have a strong market presence and market share?

Or do they constantly have to employ a large part of their profits and resources in marketing and finding new customers and fighting for market share?

After you understand the company & what they do, how they relate to the market and their customers, you will be in a much better position to decide whether the price of the companies stock is going to go up or down.

Having understood the basics of fundamental analysis, let us go into some more details.

When investing in the stocks, we want the price of our stock to rise. Not only do we want our stock price to rise, we want it to rise FAST! So the challenge is to figure out: which stock prices are going to rise fast?

Some stocks are cheap and some are costly. Some are worth Rs.500 and some are even worth 50paise. But the price of the stock is not important. The price of the stock does not make a stock good to buy. What is important is how much the price of the stock is likely to rise.

If you invest Rs.500 in one stock of Rs.500 and the price goes up to Rs.540 you will make Rs.40. However, if you invest Rs.500 in a 50paise stock, you will have 1000 stocks. If the price of the stock goes up from 50paise to Rs.1, then the Rs.500 you invested is now Rs.1000. You made a profit of Rs.500.

If you understand this, you can see that the price of the stock is not important. What is important is the rise in the stock’s price. More specifically the “percentage” rise in the stock price is important.

If the Rs.500 stock becomes worth Rs.540, then that is a 8% rise. This 8% rise only makes us Rs.40. On the other hand when we invest the same Rs.500 in the 50paise stock and the stock price goes up to Rs.1, it is a 100% rise as the stock price has doubled. This 100% rise makes us Rs.500.

The point is that when picking a company, we are interested in a company whose stock price will rise by a large percentage.

Please note: Looking at the above paragraphs, it may seem like a good idea to buy all the really cheap 50paise and Rs.1 stocks hoping that their price will rise by 100% or more. This sounds good, but it can also be really really bad some times! These really small stocks are very volatile and unless you know what you are doing, do NOT get into them.

However, the point to be noted is that we are interested in stocks that will have the highest % rise in the stock price. Now the question is, how do you compare stocks. How do you compare a stock worth Rs.500 to a stock worth 50paise and figure out which one will have a higher percentage rise.

How do you compare two companies that are in different fields and different industries? How do you know which one is fundamentally strong and which one is week?

If you try to compare two companies in different industries and different customers it is like comparing apples and elephants. There is no way to compare them!

So fundamental analysts use different tools and ratios to compare all sorts of companies no matter what business they are in or what they do!

Next let us get into the tools and ratios that tell us about the companies and their comparison....


Earnings per share (EPS) ratio & what it means!

Even comparing the earnings of one company to another really doesn’t make any sense, if you think about it. Earnings will tell you nothing about how many shares the company has. Because you do not know how many shares a company has, you do not know how many parts that companies earnings have to be divided into. If the company has more shares, the earnings will be divided into more parts.

For example, companies A and B both earn Rs.100, but company A has 10 shares outstanding, so each share holder has in effect earned Rs.10.

On the other hand, if company B has 50 shares outstanding and they too have earned Rs.100 then each shareholder has earned Rs.2. So you see it is important to know what is the total number of outstanding shares are as well as the earnings.

Thus it makes more sense to look at earnings per share (EPS), as a comparison tool. You calculate earnings per share by taking the net earnings and divide by the outstanding shares.

EPS = Net Earnings / Outstanding Shares

So looking at the EPS ratio, you should go buy Company A with an EPS of 10, right? EPS is not the only basis of comparing two companies, but it is one of the methods used.

Note that there are three types of EPS numbers:

* Trailing EPS – last year’s numbers and the only actual EPS
* Current EPS – this year’s numbers, which are still projections
* Forward EPS – future numbers, which are obviously projections

EPS doesn’t tell you whether it’s a good stock to buy or what the market thinks of it. For that information, we need to look at some other ratios next....


Price to earning (P/E) ratio & what it means?

If there is one number that people look at than more any other number, it is the “Price to Earning Ratio (P/E)”. The P/E is a ratio that investors throw around with confidence as if it told the complete story. Of course, it doesn’t tell the whole story (if it did, we wouldn’t need all the other numbers.)

The P/E looks at the relationship between the stock price and the company’s earnings. The P/E is the most popular stock analysis ratio, although it is not the only one you should consider.

You calculate the P/E by taking the share price and dividing it by the company’s EPS (Earnings Per Share that we saw above)

P/E = Stock Price / EPS

For example: A company with a share price of Rs.40 and an EPS of 8 would have a P/E of: (40 / 8) = 5

What does P/E tell you?

Some investors read a high P/E as an “overpriced stock”.

However, it can also indicate the market has high hopes for this stock’s future and has bid up the price.

Conversely, a low P/E may indicate a “vote of no confidence” by the market or it could mean that the market has just overlooked the stock. Many investors made their fortunes spotting these overlooked but fundamentally strong stocks before the rest of the market discovered their true worth.

In conclusion, the P/E tells you what the market thinks of a stock. It tells you whether the market likes or dislikes the stock. If things are vague and unclear to you, do not worry. The next ratio will make everything you read till now make sense..


PEG (Price to future growth ratio!) and what it tells you!

The market is usually more concerned about the future than the present, it is always looking for some way to figure out what is going to happen in the companies future.

A ratio that will help you look at future earnings growth is called the PEG ratio.

You calculate the PEG by taking the P/E and dividing it by the projected growth in earnings.

PEG = (P/E) / (projected growth in earnings)

For example, a stock with a P/E of 30 and projected earning growth next year of 15% would have a PEG of 30 / 15 = 2.


What does the “2” mean?

Technically speaking: The lower the PEG number, the less you pay for each unit of future earnings growth. So even a stock with a high P/E, but high projected earning growth may be a good value.

So, to put it very simply, we are interested in stocks with a low PEG value.

Just for the sake of understanding, consider this situation, you have a stock with a low P/E. Since the stock is has a low P/E, you start do wonder why the stock has a low P/E. Is it that the stock market does not like the stock? Or is it that the stock market has overlooked a stock that is actually fundamentally very strong and of good value?

To figure this out, you look at the PEG ratio. Now, if the PEG ratio is big (or close to the P/E ratio), you can understand that this is probably because the “projected growth earnings” are low. This is the kind of stock that the stock market thinks is of not much value.

On the other hand, if the PEG ratio is small (or very small as compared to the P/E ratio, then you know that it is a valuable stock) you know that the projected earnings must be high. You know that this is the kind of fundamentally strong stock that the market has overlooked for some reason.

Important note: You must understand that the PEG ratio relies on the projected % earnings. These earnings are not always accurate and so the PEG ratio is not always accurate.

Having understood these basic three ratios, you probably have started to understand how these ratios help you understand a stock and what is valuable and what is not.

In the next section we shall look at some of the things that every investor must know about. Something that SILENTLY eats into the profits of each and every investor and how to beat it...


"Inflation" & how it eats your money silently & affects your investments!

Inflation, is an economic concept. What the cause of inflation is, is not important to us from the point of view of this article. What is important to us is the effect of inflation! The effect of inflation is the prices of everything going up over the years.

A movie ticket was for a few paise in my dad’s time. Now it is worth Rs.50. My dads first salary for the month was Rs.400 and over he years it has now become Rs.75,000. This is what inflation is, the price of everything goes up. Because the price goes up, the salaries go up.

If you really thing about it, inflation makes the worth of money reduce. What you could buy in my dad’s time for Rs.10, now a days you will not be able to buy for Rs.400 also. The worth of money has reduced! If this is still not clear consider this, when my father was a kid, he used to get 50paise pocket money. He used to use this money to go and watch a movie (At that time you could watch a movie for 50paise!)

Now, just for the sake of understanding assume that my dad decided in his childhood to save 50paise thinking, that one day when he becomes big, he will go for a movie. Many years pass. The year now is 2006. My dad goes to the theater and asks for a ticket. He offers the ticket-booth-guy at the theater 50paise and asks for a ticket. The ticket booth guy says, “I am sorry sir, the ticket is worth Rs.50. You will not be able to even buy a “paan” with the 50paise!!”

The moral of the story is that, the worth of the 50paise reduced dramatically. 50paise could buy a whole lot when my dad was a kid. Now, 50paise can buy nothing. This is inflation. This tells us two important things.

Firstly: Do not keep your money stagnant. If you just save money by putting it your safe it will loose value over time. If you have Rs.1000 in your safe today and you keep it there for 10years or so, it will be worth a lot less after 10 years. If you can buy something for Rs.1000 today, you will probably require Rs.1500 to buy it 10 years from now. So do not keep money locked up in your safe.

Always invest money.

If you can’t think where to invest your money, then put it in a bank. Let it grow by gaining interest. But whatever you do, do not just lock your money up in your safe and keep it stagnant. If you do this, you will be loosing money without even knowing it. The more money you keep stagnant the more money you will be loosing.

Secondly: When investing, you have to make sure that the rate of return on your investment is higher than the rate of inflation.


What is the rate of inflation?

As we said earlier, the prices of everything goes up over time and this phenomenon is called inflation. The question is: By how much do the prices go up? At what rate do the prices do up?

The rate at which the prices of everything go up is called the "rate of inflation". For example, if the price of something is Rs.100 this year and next year the price becomes approximately Rs.104 then the rate of inflation is 4%. If the price of something is Rs.80 then after a year with a rate of inflation of 4% the price go up to (80 x 1.04) = 83.2

So, when you make an investment, make sure that your rate of return on the investment is higher than the rate of inflation in your country. In our county India, for the year 2005-2006 the rate of inflation was 4% (Which is really low and amazing!). This rate keeps changing every year. The finance minister generally gives the official statement on the inflation rate of the country for a particular year.


What is the rate of return?

The rate of return is how much you make on an investment. Suppose you invest Rs.100 in the market and over a year, you make Rs.120, then you rate of return is 20%.

If you invest Rs.100 in the market today and you make money at a 3% "rate of return" in one year you will have Rs.103. But now, since the rate of inflation is at 4%, an item costing Rs.100 today will cost Rs.104 a year from now. So what you can buy with today’s Rs.100, you will only be able to buy with Rs.104 a year from now.

But the Rs.100 that you invested has grown only at a 3% rate of return and so it is worth Rs.103. In effect, you are loosing money!

So in conclusion, the rate of return on your investments, have to be higher than the rate of inflation.

From the above paragraphs you can note how silently, inflation eats into your money. You would not even know about it an your money would sit loosing value for no fault of yours. But inflation is not the only thing you should be considering, there are other things too that eat into you money. The first thing is “brokerage” and the second thing is “taxation”.


Investors beware of: Brokerage and taxation!

You probably know the concept that all your transactions in the stock market are done though a "stockbroker". A stockbroker earns a commission on whatever transaction you make. Suppose you make a transaction of Rs.2000, and the stockbroker charges you a 3% commission, then you have to pay the stockbroker Rs.60 (3% of Rs.2000) for the transaction. So your total investment in the transaction in “not Rs.2000”. The total investment in the transaction is Rs.2060/-

So after sometime, if the price of the stocks you invested in goes up to Rs.2060 then you have not made any money because the total amount you invested was Rs.2060/-

What is more, even when you sell the stocks, you have to pay the broker brokerage of 3%. This means that, when you sell the stocks for Rs.2060, you have to pay the broker Rs.61.6 so the profit of Rs.60 you made on the transaction is gone, in fact you actually make a loss of Rs.1.6!!

So in effect even though you made a profit of Rs.60 because your stock price went up, you have actually made a loss.

If combine this with the fact that inflation reduces the value of money over time, you are just loosing money if you do not invest wisely without understanding brokerage and inflation.

Important note about brokerage: Brokers make money on whatever transaction you make. Whether you buy or sell, brokers will make money. Because brokers basically make money on transactions. Because of this, brokers tend to encourage you to trade. They don’t really care about whether you make a profit or loss. They just care about whether you are trading. The more money you are using for trading, the more they will make. Because of this, it would be wise to not blindly follow your brokers advise. The broker will give you “hot tips” etc. not because they are looking out for you and your profit, but because they are thinking about their own personal profit!

There is even one more factor that eats into your money. Tax!!!

Please note: We are not in any way encouraging you to not pay tax! We are just educating you about it.

There is a “short term capital gain tax” in our country. For a short term (less than one year) you have to pay tax on any capital gain you make though the stock market trading. How much % tax you have to pay, depends on which "tax bracket" you fall in.

Just to give you an idea. If I make Rs.100 though a transaction in the stock market, since I fall in the 33% tax bracket. It have to pay Rs.33 of that to the government!!

Please note: The government encourages you to be a long term-investor by having no long term capital gain tax. If you make a capital gain by investing for a period greater than one year, the you do not have to pay any tax on the money you make.

Now combine this short term capital gain tax with brokerage and inflation! Think about it for some time. You will almost make nothing on a small profit gains! If you want to make money out of the stock market, you must make large profit gains.

Conclusion: As a general rule, just for the sake of simplicity, your investments must grow at a minimum rate of 15% per year to stay ahead of inflation, tax and brokerage!! Remember this when making all your investments.

This concludes our basics of the stock market guide. There is lot more to learn! And the best way to do it is to start investing! (Don’t invest too much in the beginning but do start!) Once you have your money in the market, you will start to understand things a whole lot better!

Best of luck!