look back fondly at May 1999.
Not because I fell in love -- or out of it. May 1999 was when I made my first entrance into the stock market.
And I did it in style! My entire salary -- all of Rs 15,000 -- found its way to the market.
I was 22 years old and fresh out of my MBA. I took my chance on stocks. Not a penny was wasted on 'celebrations', which essentially meant drink yourself into a stupor and assist your buddies to get there as well.
Stocks gave me a high and that was where I went to get my 'kick'.
Before you shake your head at my lack of caution, let me assure you that my gamble paid off. Big time!
Here is how I did it.
I will not diversify!
I violated the first so-called golden rule of investing, simply because I find no virtue in diversification. Diversification is for cowards, not for the brave.
If stocks offer the highest return on investment, why shouldn't I put my money there?
Focus, focus, focus. That was my mantra. Which, in investing, translated into stocks, stocks, stocks.
Every month, for three years, I put all my earnings only in the stock market. I studiously avoided any other investment avenue.
What's more, I focused mainly on one sector: pharma.
Mutual funds are for the lazy
Invest in an equity mutual fund! Another one of those mundane investment mantras.
The reason: you get instant diversification (they make it sound like instant karma) and professionals do the investing for you (even though they have access to the same stocks we all do).
Why would I want someone else to invest in different stocks for me if I can do it on my own?
Besides, the so-called professionals who manage funds have to factor in a lot of costs that the investor ends up paying for.
And, if they were that professional or such experts in their field, why on earth are so many mutual funds languishing and barely managing to keep their Net Asset Value above Rs 10?
Long-term is for losers!
If you are vigilant, you can make more money in one minute than most other people make in a lifetime.
Don't believe me? I can name dozens of individuals who bought shares years ago and are riding with them through every bull and bear phase.
When the sentiment is high in the bull run and prices of the stocks shoot up, they can't wipe the grin off their faces. When the reverse takes place, the bearish market is reflected more in their persona than in the Sensex.
Through all the ups and downs, they just hold on to their stocks for dear life!
As for me, my portfolio changed almost daily and, most certainly, weekly.
I am wholly convinced that getting married to your stock is a surefire strategy to perpetuate poverty!
Blue chips are too lethargic
They are like elephants -- strong, sturdy and take ages to get some place. But they are ideal for those who profess themselves to be die-hard long-term investors.
My focus was purely small-cap companies. I invested heavily in pharmaceutical companies because I realised pharma and biotechnology were the segments with immense growth prospects.
I did make a killing in other stocks, like Reliance Chemicals. Since I worked in the same industry at the time, I realised Reliance Chemicals controlled the prices for most of its products, and there were no close domestic rivals. The only competition for a large number of its manufactured products was imports.
Incidentally, I never ever read the Profit and Loss account of a company (which every serious investor is supposed to do). The P&L account gives the company's performance over a period of time, usually a year. It tells you whether the company made a profit or loss over the period.
I studied the stock movements of the companies I shortlisted and kept tracking them. I looked for initiatives they took and the ramifications of such steps.
Since I focused mainly on pharma stocks, I made it a point to know what pharma ingredients or compounds they were coming up with and the importance of such discoveries/ productions.
Did I lose or gain?
Stocks fascinated me (they still do)! Even before I landed my first job, I knew I would invest in the stock market.
I was aware I was taking a big risk, but then again what did I have to lose? I had my life ahead of me and no loans to square off.
I am a gambler at heart and some gamblers are plain lucky.
For three years, I bought and sold shares and reinvested the profits. I had invested around Rs 800,000 over that time. When I finally sold off all my holdings, I walked off with Rs 13.5 lakh (approximately Rs 1.3 million).
How did I manage to invest my salary every month? Simple. As a Business Development Manager, I had a lot of fringe benefits which were more than sufficient to cover my daily expenses. Living with parents also helped.
What fills me with glee is knowing that I did it violating every single investment mantra.
On a final note, I think I would have made a good fund manager. Nothing would match the sheer pleasure of investing in the stock market with someone else's money.
And, yes, I would have told all my investors to stay for the long haul, while I praised the merits of diversification and doled out other investment platitudes.
Tell me, dear reader, do you think I was crazy, smart or just plain lucky? I would love to hear your views. Do drop me a line.
Note: These views are solely the author's. He does not recommend that anyone follow suit blindly.
More from rediff