It was about nine years back that I met
Manmohan Desai. Bald headed with a white beard, the man had a smile that I will
never forget. Starting at nine in the morning, Desai is at the trading terminal
until half past three in the evening. I saw him all amped up during rising
stock prices and all tensed and gloomy amidst falling prices. He never took a
trading day off and each day, just about five minutes was what he spent to have
his lunch. He never took advice from anyone, neither did I see him making preparations
for trades. Desai lost money almost every single day.
“Why don’t you stop
trading?” Everybody including his wife and son would ask him.
“Nothing’s right
about this. I mean it’s a force of tamas. I would say, nobody should get into
this. I am just one of those who got trapped in this mess. Looking at the
terminal terrifies me now!” He repeatedly told;but never stopped trading.
In real life, I would
call Desai a good businessman. But he did not look at the stock market as an
investment vehicle. For him it was just another way to pass his time.
“In the stock market,
sometimes you make it and sometimes you don’t. Apparently, I can’t make a dime
any time! Haha.” He would laugh.
Why was Manmohan
desai always losing money?
The first reason was
that he looked at it with a gambling mindset. He never researched stocks. Apart
from the name, he knew nothing about the stocks he bought. Annual and quarterly
reports almost did not exist to him. Once when I asked him about looking at the
balance sheet, profit and loss statement, etc., this is what he told me, “Oh
that’s all a waste of time!”
Another reason was
that he never cared to look at the market shares of companies or even their
products for that matter. Desai didn’t use any kind of charts, neither
candlestick nor line. In the end, as he said, the sight of a trading terminal
terrified him.
An open and positive
attitude is what’s common about everybody who tasted success in the stock
market. Invest in companies making consistent profits. If a company
accumulating losses, it is going to be reflected in its stock price. The
company we choose to invest in should have grown continuously in the past five
years. Look for figures like the total revenues, net profit and liabilities and
compare them over the years. This is how even mutual funds and foreign
investors invest in the market.
Over the last two
decades, most of the diversified equity funds have grown at a rate higher than
that of the Sensex. Remember that it’s in the same market that many individual
investors try to make profit with minimum preparation.
The stock market is
not for people like Manmohan desai. It’s for the intelligent investors who take
the time to research and execute trades based on strong conviction.
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