Tuesday, February 6, 2007

Brush with the Dalal Street

Sensex is up 100 points, Nifty is up 30 points and India is shining. I heard this 2 years back, which tempted me to have a brush with the Dalal Street. The Stock ticker once which used to be a nuisance while watching the News channels, turned into thrilling figures shortly. I first adventure with the stock market was with SAIL. Bored of asking people "what was sensex and nifty", I took the do-it-yourself approach and guess what I made so quick money and created awareness of stock n shares among my peers. I exactly started to venture into the stock markets when the heavens opened out to the dismay of Mumbaikars. I think it was July 26,2005 and I was at home. My first pick was SAIL because it was the only affordable share at Rs.50 a piece. In 12 days it climbed t0 Rs.62.50 and I was happy to bid a farewell to it. But, I was left with a paltry amout of just Rs.125, out which ICICI direct (my online broking house) charged me 5% commision on buying and selling. Later, I learned that any purchase should be above Rs.3500 (atleast, though I am clear of the figure still) then the brokerage will be just 2%.
After few more brushes with GujAmb, HCL Tech, Wipro, I learnt that to make a sizeable profit I should go big and I bought M&M (a stock which I still hold). I have learnt a lot with my mistakes and understood the terms like support, resistance, liquidity,rights issue,dividend,bonus issue,stock split etc.

1. M&M taught me the meaning of bonus share. The company increases the market cap & no. of shares and the stock price goes half the price ex-dividend. I got stumped, when I thought it would double.
2. TCS taught the meaning of dividend. When the company announced 1300%, I thought I will grow rich overnight, but later I learnt 1300% on the face value of Rs.1. Means Rs.13 per share and dividend necessarily doesnot come on the market price.
3. Bharat Forge taught me what is resistance, when it continuously hits Rs.380 mark and retraces back to 360 levels.
4. TVS Motors taught me what support means and never mess with it and try to go fishing in deep waters. It pierced its support at Rs.127, I bought more. It pierced Rs.110, I bought more. It pierced Rs.90, I bought more. At last the stock is taking a breather at Rs.74, while I am sitting with my fingers crossed with a 30% notional loss.
5. Orchid taught me the purpose of averaging cost. I have bought this stock on regular dips and it breaking away unlike TVS.
6. My darlings have been M&M, CUMMINS, INFOTEC ENTPRESIS. They have given my very high returns..... shhhhhhhhhh....profits should not be disclosed. Hey! Do not bother, I have paid my capital gains tax. I not mess with the I.T. big brother.

My current holdings are as follows
1. ASHLEY @ Rs. 44
2. M&M @ Rs.547
3. MARUTI @ Rs.920
4. TELCO @ Rs.780
5. BHAFOR @ Rs.360
6. NTPC @ Rs.135
7. SATCOM @ Rs.414
8. ORCCHE @ Rs.235
9. TVSSUZ @ Rs.109

Well, there is a quite much of my money out there. I hope, I will walk away with decent profits and some knowledge of economics. I am sure that some lessons will come at a cost and I am preparing contingency plan when the Dalal street goes on a long holiday.

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