A.1 THE FLAMBOYANT OBSESSION: Minimum risk policy for salaried/ pensioners (educated)

THE FLAMBOYANT OBSESSION 

I personally have served as a technical analyst for quite a long time.

My is a very basic, requires no technical knowledge, mid to high capital and less returns. But from a long time I wished to share my strategy with someone.

Step 1: Do your study. Invest in a company that you would like to own. Trust me if SEBI bars the company for trading for 10 years, you should have no regrets, because you own a piece of what you want.

Advice: Buy low, sell high. But the only problems is recognising the low. Read the history, report, technicals but be open to the future perspective.

Going against the tide makes a good swimmer. Not going with it.

I bought SpiceJet at 57, when every brokerage house had a sell rating on it. I trusted my research not theirs.

( Enough of philosophy, coming to the strategy. The stock I selected was Kolte-Patil. Started this strategy from jan-20. Bought after hearing Modijis scheme. I knew Kolte Patil was into affordable housing in tier 2 and tier 3 cities, people were scared to invest in Housing due to DeMo. I bought Kolte at Rs. 85. Reasons: Housing Finance reforms, tax slab increment expected, infra prospect of tier 2–3 cities.)

Step 2: Know your roof limit. (Mine was 2 lakhs.) Let it be X. Divide it by the no. of months you wish to take out the profit or see companies growth. (Mine was 10). Let it be T

ONE TIME INVESTMENT= X/T

So, my one time investment was 20000 Rs. Let's call it OTI.

Step 3: Buy stocks worth your OTI and keep on observing.

(I got around 235 stocks of Kolte-Patil.)

Step 4: *most imp. Buy whenever price goes high and propel it further, sell whenever it goes low. (Let me elaborate it once.)

So I made a perspective to Buy shares worth my OTI every time Kolte goes 10 Rs up and sell it every Sell shares worth my OTI every time it goes 3 Rs down.

Observation: By 25th Jan it touched. (I dint expect it happening) I was shocked bought other shares worth 20000 Rs, got indisciplined but followed the cycle later. This time I got around 225 stocks.

Bought at 100 (20000/100=200) (budget day). Again bought at 110 (20000/110 =180) (march 1). Sold at 107 (20000/107 =185) (march 3–4). Bought at 120 (20000/120= 165)

so,

total shares = 235 +225 + 200+180–185 +165= 820 shares

Money spent= 20000*5 - 20000 = 80000

Average Price= 80000/ 820 = 97.5 (today it closed at 121.5)

percent profit = (121.5–97.5)/ 97.5* 100=

approximately 25% in less than 1.5 months, banks pay 4–6% interests. Mutual funds give max 10–15% quarterly returns.

Faltu philosophy + show off:

This was just basic maths, good vision, planning and discipline. (Today I realised why my dad always advocated that I should be good in Maths, be disciplined, determined, and plan things up. Although he never was good in either of the above.)

I don't wish to impose my opinions but I am completely against Mutual funds and personalised SIPs. One of my salaried friend, used to boast about his HIGH RETURN SIPs. I knew he had Sun Pharma, Marico and a few others as well. He bought Sun Pharma at as low as 630s and as high as 1100, producing an average of 820s. He still buys to average it. Expects to sell them at 1000 within a year or 2 for his daughters wedding. I hope it crosses 1000. But you never know.

Market is governed by the law of demand and supply. Buy and sell based on demand and supply.

( This was the safest method limiting the loss to 4–5%. One can achieve greater returns by adopting high risk variations with OTIs in descending order. I took T as 1 month only to make sure that I either buy or sell once a month as most of the companies are bound to fluctuate-7-+7 % atleat once in a month.)

Stay tuned to Wolf of Dalaal Street .