i) I started investing in markets with my mother’s money during college times in 2007.This was beginning of the end of the last big bull run. Ample proof of insanity was everyone was talking about how lot of money can be made via stock markets .Even house wives who used conservative routes earlier for investing were beginning to get interested in stock market.
ii) This got me interested too and I started following market and started investing in IPOs (Adani port and few others which I don’t remember now) and also bought a few hot stocks like JP associates ,Tanla etc and some penny stocks etc) and the initial rush of paper profits excited me and I felt devasted when I didn’t get allotment in Reliance Power IPO
iii) Fast forward 2008 Jan and the indian market melt down starts,first time I see my portfolio lose money and even for a college kid I didn’t panick, I believed its only temporary blip and waited for markets to come back. Finally lost patience around nov dec 2008 and booked losses and mostly exited the market(Along with losers I also sold good ones like Maruti Suzuki,HUL)
iv) Then May 2009 happened and I believed that the timing is everything in market. After Satyam crash,I had Satyam as core bet in my portfolio with 75% allocation with the conviction of it being a multi multi bagger and held on to it till recently along with Powergrid being the other stock
I was out of active market action and only did SIP via mutual funds from 2009 till 2016 and reset my portfolio from March 2017 and building one for the next 10 years.
My big mistakes are I feel are
i) I didn’t use the experience of 2007 Euphoria and 2008 crash to continuously improve my knowledge of the markets. While I didn’t think like an average investor and totally stay out of markets, I worked on the wishful belief that with equities you can make money by buying a stock with good turn around prospects and then sitting on it imagining the future multi fold returns.
ii) While Satyam which turned as Tech Mahindra didn’t make me lose money, it had lot of opportunity cost. Learn that even good companies require tracking every quarter and be prepared to be open minded to listen to the negative aspects of a company too.
iii) People talk about high quality stocks with pedigree management and holding on it for years for great returns but for every HDFC bank, PAGE,Eicher there are many laggards too. Investor friendly management is the key here I guess and I have learnt this lesson late. There is always a different between good management and investor friendly management. Investor friendly management need be gauged on their actions rather than words.
iv) Listening to the stuff on TV, money control etc and making investment decisions based on it. Actually being contrarian works more I believe, I constantly heard during end 2011,2012 and even during 2016 when the market went down after a spike ,that markets are still expensive (at levels of 17,18 PE) while people who bought in this time made more money.
v) At last ,somethings which have cost me money are wishful thinking ,comparison with historical returns ,too much positive or negative bias.