The year was 1973 and a 14-year-old middle-class boy lived with his family in Kolkata's Bada Bazar. His father and grandfather both earned their living by working as stock brokers, but suddenly his father left him forever. After his father died, he struggled academically and failed his 10th exam. Living with his grandfather, he gained some knowledge about the stock market and developed a passion for trading.

Time passed, and finally, at 19, he started trading. He made a lot of money for his age and started seeing good profits, feeling that he understood the game of trading and would soon be able to give a better life to his family. He traded daily, hoping that each trade would bring him closer to becoming a millionaire. He dreamed of saving and reinvesting his profits. As usual, one day he invested all his money with hopes of a big profit, but unfortunately, he faced a significant loss. He lost all his money and fell into debt, needing to repay it within 15 days. When he saw no way out, he decided to sell his mother's jewelry to pay the amount. His dream of becoming a trader shattered, and he decided to leave trading forever.

One day, he observed people selling packets for one rupee in grocery stores and expressed this desire to his mother, who scolded him, encouraging him to think big. After a few months, he started trading again and moved to Mumbai. Initially, he made profits, but due to one wrong trade, he suffered another significant loss. The cycle of ups and downs continued until he decided to shift his focus to long-term investments. By 2004, he invested his savings in three companies: Ageas Logistics, Cera Sanitary Ware, and Atul Auto.

Over about ten years, by 2014, the prices of these investments increased 100 times, fulfilling his dream of making profits in crores. This person is none other than Vijay Kishan Lal Kedia, who is now worth about 1723 crores. There are countless success stories tied to the stock market that we hear often, but we often forget how these stories relate to us and think about their impact on our lives. The stock market influences every decision, from buying toothpaste to purchasing your dream house.

Therefore, it’s crucial for us to understand what the stock market is, how it began, and how the system works. We should explore how some people become so rich through it. Let us examine the complete origins of this stock market in today’s documentary and try to understand it in simple language.

Disclamer

This documentary is created solely for educational and informational purposes. The content presented in this steemit post, including the companies, stocks, and other financial instruments mentioned, is not to be considered as investment advice or a recommendation to buy, sell, or hold any security. Readers are strongly advised to consult a certified financial advisor or expert before making any investment decisions. It is also essential to thoroughly read and understand all the relevant documents and disclosures related to any investment. The companies and stocks referenced in this documentary are used purely for illustrative and storytelling purposes. They are not intended to be endorsements or suggestions for investment.

Chapter 1

The Origin of Stock Market.

Starting from the past commercial revolution, French funds and debts started improving at a significant rate. As this happened, informal banks were set up to provide loans for agriculture. However, handling these loans proved to be an uphill task. In an effort to solve this problem, banks assigned persons to conduct the purchasing and selling of the loans. These were called courriers de change in French, which translates to foreign exchange brokers or money brokers. This is how the understanding of brokers’ roles commenced.

This changed in the sixteenth century when the Dutch became subjects of the Spanish Empire. But in 1581 they became free. After gaining independence, they depended on the economy, which was mainly based on selling spices sourced from the Portuguese in Asia and Africa. Step by step the Spanish Empire gained the ouster of key market areas and this forced the Dutch to depend on the Portuguese supplies of spice. To cut off from this dependence and economic suppression, Dutch traders sought a new alternative to sail directly to Asia and Africa.
That is a tall order. Multiple ships were lost over the course of the expeditions with only one in ten so, despite the odds, the Dutch finally managed to locate a new path. The discovery of this new route, however, was not inexpensive. At the same time, they were fighting a war against the Spanish. To fund their mission, traders worked together and were willing to split the profits. In the end, it worked out as they had planned, and they were able to gather approximately six million guilders or US$110 million in contemporary currency.

To conduct and coordinate these activities the Amsterdam Stock Exchange was created, which is thought to be the first stock exchange in the world. Subsequently, the Dutch East India Company became the first ever, publicly traded organization leading several other countries to follow suit with this practice as well and initiate their own stock exchanges to generate financial resources.
Bonds and shares were first introduced in India by the British East India Company in 1838, which marks the start of the Indian stock market. Since its inception, many stock exchanges have come up in Mumbai, and many stockbrokers settled in that region. Natives used to trade under a banyan tree before it eventually grew into the Bombay Stock Exchange which was established under a constitution known as “The Native Share and Stock Brokers Association” in the year 1875.

The presence of regional stock exchanges became common in other regions of India as the years went by, and over the years the Securities and Exchange Board of India, commonly known as SEBI was formed in 1988 to govern the changing stock market since India has gained its independence. Indian economy has prospered with the establishment of National Stock Exchange in 1993, however the Bombay Stock Exchange and National Stock Exchange remain two of the largest stock exchanges of India.

And today, the evolution of stock exchanges has become unrecognizable as over 5000 companies have gone public and millions of people around the globe have started trading shares on a daily basis. We can monitor the trends of the economy with several indexes that track the rise and fall of the stock exchanges, such as Nifty and Sensex.

Chapter 2

How the Stock Market Works

Suppose you have a fast-food joint by the name of XYZ Fast Food within your locality. It becomes a point of interest for many people even those from other locals. Naturally, you start thinking: Why not open branches in those areas too? This way, you are able to extend your services and save people the pain of coming all the way to only one locality.

Together with some money you make up with your friends and relatives, you set up a second outlet. This new shop is also a success and the number of people coming to your fast food stall keeps increasing. Observing this, you resolve to grow further by opening outlets in all the prime locations in your city. But for that, you require a huge lot of money, more than what your relatives and friends can easily find.

In the case of this situation, you look for wealthy individuals referred to as angel investors and seek their money for a part of your company. After taking out time to understand how your business operates, they make an investment in your venture. With their help, you open branches across the city and Each one of them turns out to be a successful one. The buzz about XYZ Fast Food is growing and the profits are simply great.
But now your aspirations skyrocket. You want to expand the reach of XYZ Fast Food all over the country. This unfortunately requires an even higher amount of funds- much more than angel investors are able to provide. It is time to go public and raise funds through IPO(Initial Public Offering). In this process, you also invite the public at large to invest into your business by offering a tiny portion of equity to them. By doing so, they become a small part of the shareholders in the company.

There are a number of activities to perform before you initiate the IPO. To begin with, you engage an investment banker who is going to carry out the document preparation and review the papers. After preparation, these papers will be submitted to SEBI which will ascertain whether your company is appropriate for being listed in the stock exchange. After your company gets the «green light» from SEBI you proceed to the stage of Draft Red Herring Prospectus where you describe in depth your company. It includes what you do, your past losses, and even your predicted profits.
The moment has arrived as you strategize the IPO of XYZ Fast food. However, there is a critical juncture you have to face: determining the share price. On one hand, setting the price too high may discourage purchase, whereas setting it low would potentially result in a loss. In order to tackle this issue, one employs a technique termed as book building. A set of price ranges are announced and the public is allowed to place bids for shares between those ranges. The final share price is then calculated based on how much the public bid for the shares.

The amnion of your IPO seems favourable as your investments in XYZ Fast Foood pays off. Using the funds you garnered, you commence nationwide operations. The demand for the share of the company increases and due to that share price beet increases as well – sending stock markets into a frenzy. If the amount of buy orders is greater than sell orders, share price increases, but if the opposite holds true, price decreases.

Numerous variables impact securities. Internally, brand imagery, customer reviews, and prices are few of them. Exogenously, technology many factors including new legislations, political campaigns, global economy and even hearsay. In the past, for example, traders used to propogate false news regarding companies that were about to be listed resulting in mayhem in the price generated in the patents. This was nicely illustrated in the Harshad Mehta scam where price manipulation through weaving rumors was practiced.

These days there are market indicators such as Nifty and Sensex, which are used to observe how the share market is performing. Nifty is a measure of the performance of the top 50 companies, which are members of NSE, while Sensex is a measure of the performance of the top 30 companies which are members of BSE. Good performance of these indicators is indicative of the strong health of the market economy.

Now the question that comes to mind is, What makes the stock market so enticing to a person? The answer boils down to the fact that as an investor, you get the opportunity of multiplying your chances of making good money by investing in conglomerates. It is important to do the right amount of research, be aware of what is happening and pick the right choices.

Chapter 3

How Stock Market make You Money

Let me take you back, hypothetically for a moment, to 2015, a year in which whatever you did, you somehow ended up earning a whopping sum of 20 lakhs. This is undoubtedly an achievement to be proud of and with that kind of money you decide to purchase gold ornaments. As per your calculations, 26000 was enough to buy ten grams of gold. But an unexpected shock hits as you find yourself in a jewelry store with around 26000, only to be thrown a curveball by the store owner as he states ten grams price to be 76,000!

Being in such a predicament would leave anyone in utter shock, as 26000/10 grams of gold seems like a distant memory looking at how gold prices have shot up, with this economic phenomenon commonly known as inflation directly being responsible You are selling the scene forward to the year 2019 , one can only imagine that gold prices would have gone up drastically. Thus, only allowing you to possibly buy 3.5 grams with your 20 lakh savings.

This glimpse of the future is sufficient to say that simply sitting and saving doesn’t help one bit. A foundation is needed, one that helps in putting inflation to a distance rather than allowing one to solely focus on growing their earnings. If the trend continues and the gold price for ten grams goes from 26000 in 2015 to 2024, it won’t be insane to think how bad the economy would be.

You can choose from a variety of investment possibilities in order to preserve your wealth from erosion by inflation:

1. Fixed Deposits (FDs):

Opening an FD with a bank earns, on average, a return of about 6% compounded annually. The Indian inflation rate, on the other hand, is also around the same percent. This means your money might barely maintain itself relative to inflation and may not increase significantly in real value.

1. Commodities:

Another investment avenue is in commodities such as gold or silver. A decade ago, in 2015, if you bought gold worth ₹26,000 for 10 grams, you would easily be worth ₹76,000 by now. Commodities are usually very good stores of value and invest for inflation.

1. Stock Market:

When you buy stocks, you are investing in these companies and thereby becoming a partial shareholder. In due time, your investment grows as these companies expand. The stock market, unlike saving or putting in commodities, provides opportunities for geometrical growth. An example would be how Vijay Kedia invested in three firms in 2004 which grew to 100 times his investment value in just 10 years. Stocks are able to create wealth more than the level of inflation in the economy.

Where to Begin in the Stock Market and How to Invest?

The stock market can be entered in two ways: indirect investment and direct investment.

1. Direct Investment:

This can be characterized as investing based on your own research only. In this case, you prepare financial documents detailing reports and trends regarding the market. You will have control over everything, but it is time-consuming and exhausting.

1. Indirect Investment:

If you do not want to buy shares instead want to invest in stocks maybe because it seems a bit too technical, then you can go for mutual funds. The money captured in these funds is from many investors and is controlled by professional managers of the fund. They help reduce the risk associated with directly buying shares of companies because they do not invest in a single company, instead, they invest in several companies. Overall it would allow you to invest your money in a passive manner in order to get reasonable profits in return.

Chapter 4

The Rise in popularity

In India, the National Stock Exchange witnessed its 1st crore investors after a span of 14 years. However, a leap so big, the number of investors Increased from 9 crore to 10 crore in a matter of 5 months in 2024, adds 1 crore investors in the span of 5 months.

Youth attracts stock market

In the most recent report by the NSE, it was observed there is a rise in the amount of investors below the age of 30. March 2018 noted that 22.9% of their Investors were below the age of 30, in 2024 this figure increased to 40%, alluding to the increasing number of young Indians Showing interest in engaging with the stock marketing.

A study published by PwC India with the Industry Group Association estimates predict a strong growth in the amount of investors at 15 crores by 2025. though the reason of this exponential growth still remains a mystery

Why Are More People Interested In Trading?

1. The Age of the Internet:

The movement of the stock market to the virtual space has made it more inclusive and approachable to many people. Internet-based trading systems have lessened the entry hurdles substantially.

1. Simply the Cost of Brokers:

Because of the availability of platforms such as TradeCore, the cost of brokerage has become lower and therefore not much money is needed to invest for the average investor.

1. Ease of Access:

Creating a Demat account has become as easy as accessing a mobile application. There is no need to visit a bank branch: within minutes, one can open an account, purchase shares, and commence trading.

1. General returns:

In the last 20 years Indian stock market generated 16% compound growth, beating most traditional sources of investment. Nifty 50 index has also registered more returns than global indices.

1. Role of Influencers:

Stocks are no longer a focus of discussion for old traders only. Influencers have been instrumental in promoting the stock market by teaching people with stock-related information. Millions have been brought to the market through easy and relatable content.

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The Other Side Of The Story

On the contrary, there’s an alarming trend which is visible amidst this wave of increasing popularity. A lot of people are starting to enter the stock market with a wrong mentality, that is to say, people are starting to treat the market as a money making machine.

• Gambling Mentality:

There are a considerable number of people that invest without doing their due diligence with the hope to one day find themselves able to turn their pennies into billions.

• The Losses Are Too Many:

As inter-jurisdictional business development groups report, 9 out of 10 investors are making losses. Between FY-2022 and FY-2024, an estimated ₹1.8 Lakh Crore was the amount lost by individual investors in the market.

• Out of 10 million investors, 93% recorded a loss amounting to an averages of ₹2 lacs.

  • A meager 1% could record profits north of ₹1 lakh.

The data is scary, as it shows how many people have lost their life savings due to excess confidence and failure to understand the importance of risk.

As much as Stock Exchange has great potential for return, it is important to note that knowledge, discipline and a long range plan is what leads to success. Otherwise the market turns from a medium of creation of wealth to a casino which squanders wealth.

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