My nephew, a 20-something professional in interior decoration, is lately enamored with stock investing. Not that he has studied much as to why stocks move either way because he doesn’t need to, for stock investing is not his game as he’s pretty much immersed in his trade in which he has earned good name.
But then stocks are booming, some riding so high that they keep you gasping. In times such as this one would hear many success stories that usually go along the line as to how so-and-so has made lakhs in just 3 months by cleverly playing the stocks.
Well, success stories, as much as dismal ones when their time comes, are fairly contagious, and therefore it was no surprise that my nephew somehow managed time to come to me for some hot tips.
Why me? For he knows I’ve been neck-deep in stocks long before one Harshad Mehta changed the stock market scene forever. But I like studying more than being able to afford enough money to bet on stocks. I of course dabbled in stocks to the best of my purse’s ability and have burnt my fingers. But that was way back in early 90s.
Now I’m a long-term investor, preferring only large-caps for my fare. I told my nephew as much, but unfortunately he is not impressed. No fault of his because his heart and ears are tuned to endless hot tips floating around about sure gains in the offing.
And with hot blood running in his veins and arteries, he is blind to the virtues of selecting stocks for the long term, of seeking stocks that have it in them to automatically ride the crest of Indian growth story.
Not surprisingly, his investment has been dwindling of late what with constantly switching from one stock to another trying to time the market for that ever-elusive super gain.
While this I know for a fact, there is no doubt that similar is the fate of countless short-term stock players who harbor no affinity for any particular scrip for apparently no particular reason other than the urge to mint money.
Taking a bird’s eye view, Indian stock market is in strange doldrums. It’s a bull run no doubt. But not each and every company is a participant in it. Gone are days when all the stocks move up en masse in a bull run. Today it is sector specific, or rather company specific in selected sectors.
Thus while telecom, banking and infrastructure sectors are recording highs, the IT, FMCG and pharmaceutical sectors are hardly the current favorites. Which is why one has to be diligent while selecting stocks, and once done stay with them for longish term to reap true benefits.
In a recent cover story, ET (July 13) spells out as much. In a survey it has found that only long-term investors are able to make good money though the market is so volatile that it’s well nigh impossible to predict the future.
Doesn’t seem surprising, or does it?
Parthada, what you’ve written is what I can truely call hot tip. Thanks for the post. It should benefit many who are willing to learn from the experience of a seasoned investor like you.
Anirban, you’re always generous with your comments. Thanks.