L’Affaire Infosys captivates Intelligentsia but spares novices
The sordid duel between Billionaire Narayana Murthy and his illustrious protégé Vishal Sikka over control over Infosys, the blue-chip Tech behemoth, has captivated the attention of the intelligentsia.
All and sundry have an opinion on the subject and are sparing no effort to air their views to whoever appears to be listening.
However, novice investors have kept a safe distance and not participated in the hullabaloo.
The reason for our disinterest in Infosys is because Porinju Veliyath had warned us as far back as in October 2015 that there are no bucks to be made from the stock.
It's really funny, 1000s analysts tracking and making 100s of reports, notes & comments on INFY & TCS, which may go up or down by 5-10% 🙂
— Porinju Veliyath (@porinju) October 13, 2015
Porinju has been periodically reminding us that it is futile to waste time on the stock.
they are down by 10% in 17 months – will repeat it next 17 months! https://t.co/3DlmFE57LQ
— Porinju Veliyath (@porinju) February 17, 2017
He mocked all blue-chip tech stocks in a stern tone by emphasizing that the maximum gain that these overvalued worthies are capable of churning out in the next five years is a petty 2% CAGR.
5 top IT Cos: TCS, INFY, Wipro, HCL & Tech-Mah MktCap at 10,00,000 Cr. Zero return in 3 yrs; expect 2% CAGR for next 5 years if managed well
— Porinju Veliyath (@porinju) August 25, 2017
Astute traders make big bucks from the Infosys fiasco
While novice investors have rightly stayed aloof, some astute traders like Ashwani Gujral used the volatility in the stock and in the Nifty to rake in big bucks.
Sikka and Murthy fight, we eat malai!!!
Ashwani Gujral revealed that the battle of the two tech titans led him to make a handsome gain of Rs. 6.20 lakhs.
Sikka and Murthy fight, we eat malai!!! pic.twitter.com/LpdinSx0eB
— Ashwani gujral (@GujralAshwani) August 18, 2017
Apparently, Ashwani bought 13,000 Bank Nifty for Rs. 24,044.08 and sold them for Rs. 24,091.80.
The petty difference of Rs. 47.72 between the buying and selling price led to the massive gain of Rs. 6.20 lakh.
However, one of his astute followers pointed out that the transaction value of the said 13,000 Bank Nifty is an eye-popping Rs. 31.25 crore.
This implies that Ashwani Gujral has nerves of steel because even a slight misjudgement as to the direction of the Nifty can lead to catastrophic consequences given the size of the bet.
Ashwani was not alone in taking advantage of the volatility. Other astute traders also pocketed bucks albeit at a smaller scale.
This is awesome sir…learning from you, me too ate some chunk of the malai. ;););) Keep inspiring ! pic.twitter.com/5pe9V88GSV
— Rohan Kapoor (@RohuKap) August 18, 2017
I did the same.. Only difference was mine was only one bank nifty.. Bought at 24050 exited at 24089
— optimist_pessimist (@malavsutaria) August 18, 2017
Bet on the jockey, not on the horse
Ashwani made the cryptic comment that “Main paisa ghode par nahi … jockey par lagata hoon,” implying that he had foreseen that Nandan Nilekani would come in to save Infosys from sinking and that this will cause the stock to surge.
Main paisa ghode par nahi … jockey par lagata hoon
— Ashwani gujral (@GujralAshwani) August 23, 2017
He further baffled his followers by commenting that “Race hamesha meri thi aur meri hi rahegi … kyun ki main is race ka sabse purana khiladi hoon”.
Prima facie, there appears to be a philosophical angle to the comment.
Race hamesha meri thi aur meri hi rahegi … kyun ki main is race ka sabse purana khiladi hoon pic.twitter.com/x7YO60ndww
— Ashwani gujral (@GujralAshwani) August 23, 2017
Rs. 42 lakh gain in July-August 2017
Now, in a laudable move towards transparency and fairness, Ashwani Gujral has made public his trading account with Zerodha for the period from 23rd July to 26th August 2017.
Ran up 70lks to 1.12 cr, take into account the 18 lk payout on aug 4, 2017!!! pic.twitter.com/472HveycYI
— Ashwani gujral (@GujralAshwani) August 26, 2017
As expected, the disclosure was much appreciated by his army of followers because it inspired them:
hatsoff sir, You inspire a million of us making a billion urself. keep rolling like a king like a winner sir.
— urbanlegend (@deepanshuarya) August 27, 2017
That is why I like your method sir. You are transparent with all your trades. Congratz.
— Mayank Singh Solanki (@mayanksingh20) August 26, 2017
it shows your courage conviction judgement,no one can beat u sir
— jitendra mishra (@jitendra1312) August 26, 2017
A careful study of the ledger account reveals that 24 trades were placed in the period.
Of these, 16 have resulted in a gain while 8 have resulted in a loss.
The maximum gain of Rs. 9.73 lakh was made on 16th August while the maximum loss of Rs. 8.51 lakh was suffered on 9th August.
The overall result of the trades is that Ashwani Gujral pocketed a handsome gain of Rs. 41.67 lakh in the period (Cl. bal Rs. 94.35 lakh + payout Rs. 18 lakh – Op. bal Rs. 70.68 lakh).
Assuming, Ashwani is able to maintain the success ratio, we can expect his annual income to be close to Rs. 4 or 5 crore, which is quite awesome.
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