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The Way Ahead

I have recently suffered heavy loss, around three lakh rupees, in my stock investment due to some extraordinary extraneous reasons which are not at all related to my methodology of investment. The reasons can be attributed to the government's delay in payment of my salary and some familial financial compulsions. But, I don't want to blame anyone for my loss.
After meeting my financial obligations by selling stocks, I am now left with only three companies in my portfolio. Those are 
1. TATA Motors 2. IRB Infra 3. TATA Global
And my total investment in these three stocks is around four lakh rupees. But these stocks fell heavily after my buying. Of course, some form of cynicism is prevalent in the market at present. Such a situation is quite common during an election year. Someway, I am at present experiencing some disdain towards the stock investment. Though the stock valuations are attractive, I don't want to go for stocks. I don't want to touch any stocks in the fores…

How to make money in stocks

Many new entrants frequently ask me this question. I think that I have now accumulated enough knowledge to answer the question.

You will be surprised to know that it is enough to follow just 5 to 10 stocks all your life in order to make crores of rupees in the stock market. Yes! What you are reading is an absolute truth I learned from reading and experiencing the market. So, always opt for focus investing. Neither new entrant nor an accomplished investor should hold more than ten stocks in his portfolio.

The newbies must know that investing is not a betting. You have wait years after investing in a company. Further, you must know how to analyze the fundamentals of a stock i.e. PE, BV, ROI etc. One must analyze the company both at the micro level and the macro level. You must closely see how it performed since its inception. Then only, you will realize the real worth of the company, its management and ownership. A realistic assessment of the quality of management and ownership is a crucial thing in buying a stock.

If you follow the company regularly on micro and macro parameters, you will definitely predict when it is going to rise and fall. Follow the news of the company on a daily basis. But, you may ask me when to buy a stock or sell it. You can buy a stock if it falls drastically due to the reasons that are not at all related to fundamentals of the company. You can buy a considerable amount of stock at that time. Then, when to sell it. The right time to sell it is 'NEVER' if the fundamentals are right. So, buying a stock at a low price and keeping it long-term is the thing that ultimately makes a difference in your life. The experience of top investors always supports my long-term theory. I always advise you to invest only the idle money that you hold in your savings accounts so that you may not be compelled to withdraw early. Taking trading as your profession is not a good idea if you want to earn a lot from the market.

Another most important point to remember is diversification. You can't keep your portfolio too narrow with just two or three companies. Only psychologically strong people can do it. So, I always advise you to buy at least ten companies from five different sectors. If stocks from some sectors fall this week, another sector stocks may rise at the same time, so that you won't suffer any mental disturbance due to market fluctuations.

The gist of my suggestions is :

1. Buy only a few companies not more than ten

2. These stocks should at-least be from five different sectors

3. Take the stocks from large cap, mid cap and small cap

4. Remember a company is behind every stock. Analyze the fundamentals of the company before buying its stock

5. Buy the stock when it falls due to extraneous reasons

6. Follow the fundamentals and the news of the stock regularly

7. Never sell the stock if the fundamentals are good

Venugopal Bandlamudi

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My portfolio

1. IRB Infra

2. Sanwaria

3. TATA Motors

4. TATA Global

5. Ashok Leyland

6. Gammon infra

7. 3i Infotech

8. Karuturi Global

9. Visagar Polytex

10.Welspun india

Venugopal Bandlamudi
                         M.A., B.Ed.

Successfully crossed 100,000 mark

I have successfully accumulated more than 100,000 shares of ten different companies until now. I will add more shares to my kitty in the future if I have any money available with me. Further, I don't want to have more than ten companies at a time in my portfolio. I believe persistence and patience are keys to success in investing

Market strategy until the next General Elections

There is some weakness apparently visible in the markets now. But, don't fear! It's quite common to find the volatility as this is an election year. And nobody knows when Modi announces the elections. 
Let's assume next General Elections are ten months away. How can we formulate our market strategy these ten months? I hope you are following at least ten stocks at a time. Always buy any of these stocks if they dive more than expected. If you are a salaried person, you can buy small amounts of stocks on every dip depending upon the availability of cash. This is the main point of our strategy. Don't sell any stock these ten months. 
You may ask me when to sell a stock. The best time to sell is after the new government takes over the reins. The market will be buoyant then. It will certainly make the northward movement. So, remember the right time to buy is during the election year. And the right time to sell is during the first two years of the new government.