LUCKY TRADE :
In late 2012 , I had reached financial independence (passive income > my annual expenses ) on account of 2009 - 2012 FMCG bull run . My net worth had grown multiple times , I thought I should learn to invest beyond my core- competence and diversify beyond FMCG stocks .
But I did not know how to invest like pro as earlier I used buy business I understood when they were at 52 weeks or 3 year low . That Simple … No ratio analysis , I did not study annual report – Nothing whatsoever …
So now I started reading investment books of Ben Graham , John templeton , Marks and also WB and lot of investment blogs by Indian and International experts. But one person who left a mark was John Templeton . I found his idea of investing in 100 penny stocks when market is at historic low pretty interesting . I thought I should give this strategy a try before quitting my day job .
So in 2013 I started constructing ETF of near 20 ( with option to increase to 25 ) stocks . The criteria was stock had to be @ 3 /5 years low with Avg dividend yield > 2% ( though in some stocks like GMR I ignored dividend rule - BIG MISTAKE ) . That is lesson - when one decides a rule he/she should stick to it.
So I picked lot stocks which I thought were “JUNK STOCKS” and where i Iiked the names of stocks … It was that crazy … I decided I will allot max 10% of my PF to this as I should not regret losing this money …
STOCK and their avg buy prices
ALOK INDUSTRIES @ Rs 7
BAJAJ HINDUSTAN @ 20
COSMOS FILMS @ 58
DAMODAR INDUSTRIES @ 54
DEEPAK FERTILISER @ 150
FUTURE LIFESTYLE @ 59
GABRIEL INDUSTRIES @ 17.33
GRAPHITE INDIA @ 77
GMR INFRA @ 18.2
ILFS INVESTMENT MANAGERS @ 10.2
INDRAPRASHTHA MEDICAL @ 35
NIIT @ 21.5
NILKAMAL @ 123
NOIDA TOLL @ 20
PNB GILTS @ 15.5
PAPER PRODUCTS ( PPL ) @ 35
RATNAMANI @ 133
REPRO INDIA @ 151
SUNDARAM FASTNERS @ 36
SJVN @ 24.18
SONA KOY @ 9.2
Suddenly in late 2013/ early 2014 market took a U TURN and some of the above JUNK stocks became multibaggers esp Gabriel , Sundaram fastners , Sona Koy , Ratnamani etc … within matter of 6 months .
That was the time I started studying these stocks and checked them through my prop software and exited stocks with scores < 25 like Aok , Bajaj Hindustan, GMR , Future Lifestyle etc … and for rest I thought I will sell only if my software gives sell signal …
Well to cut long story short this was kind of LUCKY GAIN and it helped me get my Dividend income > annual expenses . That meant my fixed income interest became extra bonus that I could reinvest in stock market … So I finally quit my day job in April 2015 …