Experiment 1:
My
first stock purchase (not investment) was 20 shares of Chennai Petroleum
Corporation Limited at Rs. 245.00/-.
Reason
for Purchase:
Since
Nafiz had bought this one, he used Alt+Tab to watch the price of this stock
regularly. He told us that it was oscillating in the range of 230 to 270.
What
I did:
I
bought it at 245 in December 2005, the very next day it rose to 249 to blossom
my face through happiness, but only to fell down to 220 levels. Thereafter, it
was oscillating in the range of 220 to my break-even (instead of 270) for a month’s
period. Finally, I sold it in February 2006 at the same 249.
Experience
learned:
Nothing
Experience
we can learn from this experiment:
Never
buy or sell a stock, just because other person (including Warren Buffet) is
doing it.
Do
your own research.
Experiment
2:
Scrip:
Ashok Leyland
Reason
for Purchase:
Since
I have learned nothing from my earlier experiment, I was tracking the same
stocks which the other three musketeers (Nafiz, Barath & Mahesh) were
tracking.
What
I did:
I
bought it at 31 levels in January 2006. It went down to 28 levels and was
trading in the range of 28-30. Some time in the next month, it reached my
break-even (Purchase Price +Brokerage +Taxes). As I was very much influenced by Break-Even
Theory*, I have sold it immediately at my break-even, just to watch it rose
from 70% from those levels in next 3 months.
*
Break-Even Theory is not an accredited one, but it’s the top most influential
theory in Stock Markets because most of the active participants are traders
subject to high emotions by psychology.
Experience
learned:
Since,
In this case I have not done any research and just made the transactions by
looking at the ticker price, I have learned NOTHING in losing an opportunity of
70% profit.
Experience
we can learn from this experiment:
If
YOU have well researched a stock and YOU are pretty much aware that it is
grossly undervalued, the only thing you require is PATIENCE to reap the
fruitful rewards.
Patience
is the Key for Stocks Treasure.
“Blessed
are the meek, for they shall inherit earth”
Experiment
3:
Scrips:
Williamson Magor & KCP Sugar
Reason
for day-trading:
Since,
Nafiz is an active day-trader who stares at the best 5 quotes of nseindia’s
website (those days, we have not opened an account in ICICI Direct) every
second, we disciples just followed his foot-steps.
Further,
the real motivation for day-trading came from the superstar status that comes
along with the successful day-trader in predicting stock movements rather than
the process of making very quick bucks.
What
I did:
If
I remember the date correctly, it is 29th December 2005, I sold 50
shares of Williamson Magor @ 42 and bought it back @ 41. HURRAY!!... My first
intra-day is a success…
Once
you tasted day-trading, whether u succeeded or failed, it is an ADDICTION like
cigar butts… U can’t come out of it easily…
Since
1st January 2006 is Sunday, the next day-trading was on 02nd
January, I sold 50 shares of KCPSUGIND (the stock code which I can never forget
in my life) @ 522 and successfully bought it back @ 520…
WHAT TO SAY ABOUT MY
FEELINGS… I AM THE NEW WARREN BUFFET… I AM THE GOD… But my mind voice said…
“THAMBI, TEA INNUM VARALA…” (Even Telugu Pokkiri was not released by that
time)…
Mahesh
created a PPT “INTRA DAY SUPER STAR” “ELAMVAZHUDHI” like the “SUPER STAR “
“RAJNI” comes in RAJNI films…
The
very next day i.e. 3rd January 2006, I came to office, after others
had come. Everyone was busy looking the Best 5 Quotes of KCPSUGIND. I wondered
why these guys are checking out this scrip so impatiently. While, I enquired
they told Barath has sold 50 shares @ 535. My tempted young blood forced me to
put a sell order for 50 shares @ 532. Barath to prove that he is also a youth
put another sell order for 50 shares @ 532. We were pressing F5 key every 5
seconds and the price was around 540 levels. My heart beats @ 200 bps continuously
ever since Sachin & Jadeja batting days. Suddenly, partner of our audit
firm came there. That’s the time, we realized we are working in Audit firm, not
in Stock Broking firm. The partner told us that our prestigious client is
proposing for an IPO, so we have to sit late nights and stay in the client’s
office to finish the work at the earliest.
The
meeting went on till afternoon with our hands tied of not pressing F5 key. By
the time, my watch shows it is already 02:30 p.m. When we checked out the
price, I was totally devastated. It was quoting at 560.When we called our
broker to place a buy order, he said the price was 572. My heart busted.
I
have lost half of my monthly stipend in just few hours. I would have felt better, that
Barath lost all his stipend.
Within
24 hours, “Super Star to Comedian”, “Warren Buffet to Beggar”… Guess, what my
inner voice would have told… U may Guess “Arasiyalla idhellam
satharanamappa….”, but it told “Andavan vechan paaruda aapu”…
The
day was the only day in my life I went to temple for the sake of peace of mind.
This day-trading disturbed my sleep for the next one week.
After
this, you may think that I have quitted day-trading, but after a week, my mind
voice told me “Ha.. Ha... Arasiyalla idhellam satharanamappa….”. The
day-trading and I were closely associated till 2008. After that, we parted
ways.
Experience
learned:
Never
indulge in day-trading, when a partner visit is due.
Never
quit day-trading.
Experience
we can learn from this experiment:
Warren
Buffet once said, “Derivatives are financial weapons of mass destructions”.
I
would say “Day-trading is a cube of derivatives”, but we never learn from other
mistakes.
We will accept it, only if we have done a mistake. That too, we won’t
say it in public, because we never give up our ego.
Still,
if you want to day-trade in stocks, my suggestion is never day-trade in stock
with 100% of your money, just allocate less than 10%.
If
you think, who is this kid to suggest us, I would humbly request you to never
day-trade in stock with 100%, please borrow 100% more from others, put all 200%
in day-trading. In the next three months (maximum), if you have put all your
money in the first two weeks of that three months, you will become deaf automatically when you hear the word
“Day-trading”.
Finally,
the Great Research Tip:
During
my first week, the only best thing I have done is subscribed to The Economic
Times Newspaper. While running through the numbers in the Stock Quotes page, I
stopped at the quote of then market-darling “Infosys”. It had Day-High (High
traded price of the day) @ 3000 and Day-Low(Low traded price of the day) @
2880.
The
difference is 120/-. I thought, if I sell 100000 shares @ 3020 and buy-back @
2880 or the opposite, I will become a crorepathi in a day.
Experience
learned:
I
can’t do that.
Experience
we can learn from this Great tip:
You
can’t. Reasons you find it yourself.
You are sharing Good experiance with comedy sence. I liked very much your post...
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