Vijay Kedia is a very inspiring figure because like us, he was also steeped in poverty and could barely make ends meet. How he overcame his handicap of poverty by mastering the fine art of picking multibagger stocks is a fascinating story which is covered in detail in the story “What We Can Learn From Vijay Kedia’s Strategy Of Finding Multibagger Stocks”.
In his latest talk, Vijay Kedia was at his charming best. His earthy wisdom and rustic wit thoroughly impressed the bright-eyed IIM students, who are otherwise known for being difficult to please.
Vijay Kedia candidly admitted that in his early days as an investor/ trader he was living a “hand-to-mouth” existence and that there were several occasions when he did not have money to even buy daily necessities. His total wealth in that period totalled a princely sum of Rs. 35,000.
However, a couple of stocks such as Punjab Tractors, ACC and Aegis Logistics turned the trajectory of Vijay Kedia’s life. These stocks turned into incredible multi-baggers, with one of them (Atul Auto) giving a mind-boggling 500x return.
The best part is that Vijay Kedia has distilled his learning and experience into ten actionable points. These are:
|VIJAY KEDIA’S 10-POINT FORMULA FOR SUCCESS IN STOCK MARKET
|(i) Never be dependent on the stock market for your livelihood or day-to-day living. Have an alternative source of income. This will insulate you from the volatility of the market and give you holding power;
|(ii) Never buy a stock except after thorough study into the stock’s fundamentals. The stock market is not a gamble. You must also be fully aware of news and developments that affect your stocks and learn to “connect the dots”;
|(iii) Invest according to your risk profile. Ensure that other asset classes also have an allocation. This will again insulate you from the risk that equities carry and give you holding power;
|(iv) Never trade in stocks. Never use borrowed funds to buy stocks. It is extremely risky and can lead to “instant death”. Less than 1% of the trading population makes money. Also, trading requires special aptitude which a normal person lacks;
|(v) Invest for a minimum period of five years. “Rome was not built in a day”. It takes time for companies to mature and grow;
|(vi) Invest only in the best managed companies and don’t worry about day-to-day volatility in stock prices;
|(vii) Remember that the “Investment belongs to the market and only the profit belongs to you”. In other words, don’t get carried away by notional and paper profits;
|(viii) Book profits periodically. When a stock looks overvalued, don’t hesitate to cash in the gains;
|(ix) Be balanced in your approach. Don’t be very optimistic in an uptrend and very pessimistic in a downtrend. Also, never have regrets;
|(x) Do good karma and be a good human being. Stock market is a mind game. Good deeds will ensure that your mind is calm and is able to think rationally.
Vijay Kedia also pointed out that one must only buy stocks which have “good management, good product and a competitive advantage”. He also gave practical examples of Atul Auto and Cera Sanitaryware to explain how booking profit periodically, especially when the stock looks overpriced, is a sensible strategy to follow. He gave several other important pointers for us to follow to be able to become successful investors!