Guide To Investing In Stock Market (Part I)

I’ve started investing in Indian Stock Market back in June 2005 when I was 19. The Indian Stock Market continue to hit new highs since then. But I didn’t gain anything but I learned a lot. I believe that I picked the right stocks at the right time but I was wrong in selling those stocks. I sold some of the stocks at a 10 to 50% profit and I sold some at a loss of 10 to 30%. But since then those stocks reached the sky.

You might have noticed that out of the above stocks only Pentamedia Graphics under performed the market as it is still trading at around Rs. 6. Why I picked Pentamedia Graphics? Only because it was a penny stock. Like most people I believed that its easy to double a penny stock in the short term. But now I discovered that I was wrong. Don’t go for a penny stock. So forget about that and check out the rest. It was the first time I entered the stock market. I invested some Rs. 10,000 at the time and suffered a loss of Rs. 2,500 or 25%. Then I paused for a while and resumed trading after some time. And then I began to pick quality stocks and momentum stocks and increased my capital to Rs. 75,000.

I recovered my loss Rs. 2,500 in the second phase but again I suffered a loss of around Rs. 10,000 to 20,000 towards the end of that phase too. Just because I sold off those stocks for a loss instead of holding. But if I didn’t sell those stocks then it would be worth Rs. 200,000 or even Rs. 300,000 today. Damn it.

I stopped trading again for a while and then started my third phase in investing this January 2008 after that huge fall. I learned a lot again and began to follow my own strategies in stock picking and never listened to bloody analysts in CNBC TV18. Who are get paid for appearing in television. They pick the stocks before recommending and then will sell off once it is soared high. And the outcome is that retail investors books losses and get out of the market. That made me to write this article.

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