Investors & traders suffer huge losses in market meltdown
It is no secret that all the locals of Dalal Street, which includes investors and punters like Mukeshbhai, Jigneshbhai and me, are in a bad shape owing to the sudden and dramatic change in the trend of the markets.
We have suffered colossal losses and there has been a severe dent in our confidence levels.
“Hum jeeke kya karenge, jab dil hi toot gaya,” Mukeshbhai sobbed, shedding copious tears, while Mandakini consoled him.
Even expert traders were bamboozled by the sudden change and suffered mega losses.
Mitesh Patel, the trader who became famous for revealing the secret mantra of Nita Ambani (see Trader Discovers Nita Ambani’s Secret Mantra, Rakes In Fortune From Stocks), fairly disclosed that he had suffered a crippling loss of 1.9 crore.
This happened because he was over-confident and did not place a stop loss.
Didn’t kept SL on call side that costed me 1.9 cr.
+1.4 cr to -48L.
Ended March series overall with net 2% capital loss.
March 20 and March 21 contra. pic.twitter.com/vonyeyknVm
— Mitesh Patel (@Mitesh_Engr) March 25, 2021
Yet another expert trader named Manu Bhatia, who had once earned a record profit of Rs. 1.23 crore and created a sensation on Dalal Street (see Trader Makes Rs. 1.23 Crore (In 10 Days) & Explains How We Can Also Make Such Gains), reported a loss of Rs. 84 lakh.
“Took some High Risk bets this expiry which clearly backfired,” he revealed in a somber tone.
-84L for the day
Took some High Risk bets this expiry which clearly backfired
A very tough day to trade indeed & same can be said about this month as well
Overall it's been a fantastic FY, So can't complain ?? pic.twitter.com/HB7jK9vOT5
— Manu Bhatia (@bhatiamanu) March 25, 2021
Other expert and novice traders also had similar tales of woe to report.
Lost 2.69 lacs.. psychologically very difficult to handle such days. Was in profit of 2 lacs to end with 2.7 lacs loss… MTM was like 2 lacs profit to 4 lacs loss to end with 2.7 lacs loss..
Tough day to manage..??? pic.twitter.com/ah983PQj5B
— Ronak (@Ronak_Unadkat) March 25, 2021
In the wake of the numerous fiascos across Dalal Street, some experts reminded that we should never omit to place a stop loss if we want to save our accounts from blowing up.
Perfectly put. My 20+ years have taught me two iron rules
1. Maintain SL
2. Never average a losing position
Break either of the two, and one day you will blow up for sure https://t.co/5OMKAosmcX
— Subhadip Nandy (@SubhadipNandy) March 27, 2021
…. I invest Rs. 20 crore every day
However, while other investors and traders are bemoaning their fate at the steep plunge in the stock markets, Saurabh Mukherjea is rubbing his hands with glee.
He recollected the fateful day of 12th March 2020 when the stock markets had tripped the lower circuit and trading was halted.
“On March 12 or 13, 2020, I was on one of your shows and I remember running out to speak to my colleagues about how much we wanted to buy when the market went gap down,” he said.
He also revealed that over the last 12 months, Marcellus has invested around Rs 20 crore to work incrementally every day which aggregates a mammoth Rs 4,000-4,500 crore.
“We are not going to lose too much sleep about day-to-day market volatility,” he said in a firm tone.
Tech stocks like TCS and LTTS have to be in everyone’s portfolio
Some Pundits believe that the Tech sector is “defensive” and will not be able to deliver hefty returns.
Saurabh slammed them.
“There is this bizarre notion in many parts of the Indian market which sees IT as a defensive sector. I never quite understood how in the age of technology, Indian IT services can be a defensive sector?,” he said in a fiery manner.
He explained that the Indian Tech sector is the “world’s cloud kitchen“, implying that it is an essential ingredient in global businesses which cannot be ignored.
“Accenture’s blazing result last week will be a good precursor to the Indian heavyweights posting further jumps in their order books,” he stated.
Saurabh revealed that Tata Consultancy Services (TCS) and L&T Technology Services, both blue-chip behemoths, are his favourite stocks.
He described L&T Technology Services as a “rare Indian IT company” which is specifically a play on technology going into capital goods and machinery.
“There is a significant upside in IT over the next two to three years,” he opined.
Fine Organics is a small-cap hidden gem stock
Saurabh opined that the Indian specialty chemicals has real potential and that it is today where the Indian pharma sector stood in the mid 90s on the cusp of a golden 20-year run or where Indian IT services stood in the early 90s.
He pointed out that Fine Organics, a small-cap company with a market capitalisation of Rs. 6900 core is one of his favourite specialty chemical stocks.
“A company that we researched diligently over the last couple of years and then built a significant position over the last 12 months is called Fine Organics,” he said.
He also pointed out that the products of the Company have wide application in day-to-day life.
“Your bread or biscuits this morning are highly likely to have contained fine organic emulsifiers and there are antifungal agents. It is a market leader in this. Majority of India’s emulsifiers and antifungal agents in baked products come from Fine Organics“, he stated.
He also pointed out that Fine Organics’ market cap is around a billion dollars and that its return on capital employed is about 35%. There are also high barriers to entry.
“Fine Organics has a marquee clientele consisting of leading Indian FMCG and global companies. There has been consistent reinvesting back in the business. I think 20-25% earnings compounding over a long time should be feasible for Fine Organics and therefore we have built a substantial position in the small caps and specialty chemicals companies,” he added.