Dating with X

Most of us like heroism i.e. rising like a phoenix, when others gave up. I am not an exception. May be that is the reason, I like Ajay Jadeja, Sachin Tendulkar, Rajnikanth & Ajithkumar.

In spring 2006, Stock Markets were corrected (down) by 31% from its all-time high achieved in the winter. On those days, I was an avid trader tracking “Top Gainers” “Top Losers” lists. I found one stock in the Nifty Basket, which most often found a lonely place in the “Top Gainers” List, while the overall Index (Nifty) is down for the day. Some days, it had company of other defensive stocks (FMCG* & Pharma) also.

*FMCG: Fast Moving Consumer Goods (Soap, Tooth Paste, 

Shampoo, Biscuits, Snacks & Savories, etc; which forms part of our daily routine life and they have to purchased & consumed repeatedly.)

*Defensive Stocks: The expenditure on medical & FMCG are the last one to find a cut in our budget. So, the amket assumes that the companies engaged in these businesses are defensive bets. i.e. they will continue to do good business, regardless of boom or gloom.

It is an unwritten theorem, “In tough times, defensive stocks are the best bet”. 

 

Lets come to my favourite "X". If you look at the recent history, from January 2008 to November 2012, the Sensex is down by nearly 10%. i.e. If you have invested Rs. 10,000/- in the Sensex, it is worth Rs. 9,000/- now. If you consider Inflation, it may be worth less than Rs. 7,000/-. In contrary, “X's” price has more than tripled in this period. No stomach burning, I haven’t invested in X.

By having a steal look at (not reaping/profiting) this kind of return, by now, many more could have joined the bandwagon as one-side lovers of “X”.

In my romantic days, like Rajnikanth’s popular dialogue in Velaikaran “I can talk X, I can walk X, I can sleep X, I can drink X, I can dream X”. 

As I said in my first blog post, those days we used to sleep in our client’s office, because of their proposed IPO. In toiling(?!) midnights, I used to stare at the price of X & read the news column, the so-called experts views & targets, comments by fellow one –siders.

Since , I will wake up very late in the morning, I mostly skipped breakfast those days (paying the price now). My friends used to tease me, I am dating (sorry, investing) X with my breakfast money. Ouch.. I said investing. Please forgive me, those days I don’t know the meaning of investing.

Really, I should be proud of X, because it is my only love, which reciprocated. LOL… It never let me down, not even a single time. Always, I made profits in it. At one time, it gave me an unrealized profit of 25%, but soon it fell down and when my profits became 5%, I sold it. Then, it started to move up, just like my other trades.

Whenever I am investing in X, I felt guilty because I am making money at the cost of others lives… What a socially responsible person?... Santhanam’s Wow…

So, finally with bitterness (like Kalaignar said that DMK will support FDI, with bitterness), I let my "X" go out of my life.

However, I am not sure that I will never invest in X. Now, I am not thinking of it (just keeping it in my Watch list), because it is quoting at very high price.

 

If it trades at sub-100 levels(greed?!?!, may be...), am 99% sure that I will invest in X by giving an explanation like politicians that “Whether the smokers will quit smoking, if I am not investing in this Company?”.

Yes, that X is “ITC”… Brand Owner of the seductive temporary sixth finger.

Year 2006 Experiments Continued...

Experiment 4:

Scrip: Williamson Magor

Reason for Purchase:

Adrenaline Rush

 

What I did:

It was a day, in which most experts will be debating about What Finance Minister should do. Yeah, it is a Budget day- 28^th February 2006.  Then Finance Minister P. Chidambaram was delivering his Budget Speech in the Parliament.

Barath told us (Nafiz was on leave/came late) that there will be good news for fertilizer stocks and Williamson Magor will freeze in upper circuit* today. Suddenly my adrenaline rushed & I put a buy order of 100 shares @ Rs. 85.50/- to make a gain like "meter vatti". 

After that both my mood & stock price were spiraling downwards. Then, I started to search my mobile (like a BP patient searching for tablets) to call the broker. Sold @ Rs. 82. The 15 minutes adrenaline rush costs my 4 days stipend. "Adrenaline Rushed... Im Crashed... Broker Cashed..."

After my sale, the stock was spiraling upwards & finally froze @ upper circuit –Rs. 87.60/-. I was in situation like the dialogue in 3 idiots movie "It feels bad when a friend fails, but it feels even worse when he comes first”. Likewise, "It feels bad when u sold at a loss, but it feels even worse when the sold stock rises after that."

*Freeze in Upper Circuit: For the stocks which are trading only in Cash Segment (not in both Cash & Derivative Segments), the Stock Exchanges will fix circuit filters of 5%, 10%,20%. The circuit filters will vary based on the stocks. i.e. If previous day closing price of a stock (in 5% Circuit Filter) is Rs.100/-, the next trading day the stock may trade at a high of Rs. 105 (or) at low of Rs. 95 & not beyond that. If it closes @ Rs. 105, the stock is frozen @upper circuit (or) if it closes @ Rs. 95, the stock is frozen @lower circuit.

Experience learned:

Nothing

Experience we can learn from this experiment:

Learn the art of practicing Self Control.( I am practicing, but yet to improved a lot)

Experiment 5:

Scrip: Reliance Natural Resources Limited (RNRL)

Reason for Purchase:

To make a Quick Buck

What I did:

I went to my heaven Jayankonda Cholapuram for collecting my Voter’s ID card, when the demerged Companies of Reliance Industries (bcoz of the dispute between Ambani Brothers) i.e. ADAG Companies were listed on the stock exchanges in March 2006. 

When I came back to office, the three musketeers told me that Barath & Nafiz made a killing (quick buck i.e. profits) in one of the Demerged Company, RNRL(which has no assets/business with it). They bought the shares around 16 levels and sold it around of 30 levels within a week’s time. 100% profit in a week (5200% annualized return). 

Then also, it was continuously frozen @ upper circuit in the following days to reach a high of Rs. 40. Next day, it was down to Rs. 39/-. 

By hearing and seeing this, what I would have done?... Yes, u guys are absolutely right. Yeah, I bought that stock @ Rs. 39/-. From then, it was continuously frozen @ lower circuit in the following days. Finally, I sold that @ around 24 levels. 

Even after my selling, the stock was falling like a knife to find its anchor in the ground. It did found its anchor @ its listing price Rs. 16/-.

Experience learned:

Since, whenever I sell a stock, it will move upwards like a rocket waiting for my sell trigger. Even after my sale, it was falling. It was new to me & I was literally shocked. LOL….

Experience we can learn from this experiment:

There is no free lunch in Stock Market.

I did speculated my stipend in so many other trades in 2006, some yielded miniscule profits which is not even comparable to the losses I have incurred.

But, one stock which I found in 2006 is worth of writing a separate blog post. Hope that is my next post.