I did my first transaction in equities in the year 1979. I was in 12th standard, Clive Loyd had not yet won the ‘Prudential Cup’ ….and my parents did not think that a ‘kid’ should not deal in shares…I think my first transaction was 50 shares of Ind Suzuki (later on called TVS Suzuki). Do not remember too much more of the details – but the ‘broker’ remains the same.

Well it was a long time ago – my head was full of black hair, felt invincible and of course foolish ideas were dime a dozen!

Beating the market was so easy – if you did not measure you will anyway not know, correct? So used to be happy with some short term gains…then started trading/ investing for my dad, mom, dad’s Huf, sister.

Well like all journeys learning starts only when you admit your ignorance – is it actually the beginning of wisdom?

Some important learning over the years have been:

– In the medium to long term equity markets do well. In the short term, they are just wild – and let this not scare you.

– Good quality equities tend to do well, but predicting WHEN (market timing) is neither possible, feasible NOR NECESSARY.

To make money you need to invest in good quality of equity – shit does not change form! I have lost capital ONLY in poor quality stocks – but I have also made money. I continue to deal in shares like H K Finechem, Moschip, Crest Animation(in the green),  Arvind trading, Punj Lloyd, Taneja Aerospace (made money, yuck!), Allied Digital, Jupiter Bio,  ……..etc. Apart from losing my capital in Shaan interwell, Indiana Dairy, and Krishna Filaments!

The last 9-10 years have been just TOO GREAT…I do not expect the next 10 years to give such an excellent return. And to think my broker has helped me beat the 10 year sensex performance by a mile, is as scary as it is satisfying.

-Expect your portfolio to double in say 6-7 years, especially if YOU ARE NOT REINVESTING THE DIVIDENDS. Anything shorter is good luck.I know people who are traders, investors, fund managers, CIOs, research people – almost none of them can predict the closing index – in the morning. My respect for them has only increased! Short term trading and long term investing are like ‘lightning’ and ‘lightning bug’ – there is no connection AT ALL.

Still, nearly all investors think they are smart enough to define such short-term movements, and make money.

This is hubris – and as expected frequently gets them into trouble.”

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  1. Mr.Subra – I came across a new service called ‘Equity Portfolio Construction Service’ (EPCS) where a stock broker would construct equity portfolio and charge a fee as percentage of assets.

    What is this? Who is eligible to offer the same?

    Is this something like a PMS for which one requires SEBI licence?

    If no licence is required for EPCS, why someone should take the pain of licence, compliance, fees etc. associated with PMS and instead opt for EPCS which does not attract compliance or regulatory purview?

    If EPCS is legal, then more stock brokers may join the fray. Income without any compliance!

    What about customers? Do we need worry about them at all? They simply love exotic things!

  2. I still want the name of your broker! Gimme a hint and I will fish him out! And yes, Since I am from ghatkopar – gujju jain strong hold I can do that!

  3. Hi subra,

    What’s your take on Allied digital, I have some 50 stocks at Rs225. Is that good to hold for some more time.

  4. Sam- Mr.Subra may not let me say that in this forum. I’ve sent him an email too some time ago on this. Ignoring the person, atleast let us get the answer to the query. Is EPCS legal or illegal? If legal, why a stock broker should not opt for this model instead of PMS, so that there is no question of license, compliance, networth and regulation. Ofcourse, the customer as always would be taken for a ride.

  5. SAM people (no, not me) have reached the stage of not wanting to do any business. My broker is surely one of them. Also the value add is impossible to explain – so it may sound arrogant, but he has reached a stage when I find it difficult to justify a say, 1.5% brokerage even to a good friend.

    And at his net worth level, income level and expense level he has enough money for the next 725 years. Why add troubles? or clients?

    Allied digital..I have more shares than you have but luckily at a much lesser price, but yes tax raids have worried me too. No clue what to do..makes sense to sell it, if the amount does not matter.

    Muthu this is not a forum for changing the way things are in the world. I have met at least 10 of our regulators at various points in time. Only protection is education. Frankly I do not care what is legal, what is illegal…I have had the opportunity to meet some of India’s biggest brokers, lawyers, scamsters,…it has not affected MY LIFE – that is all. Also we as a country are obsessed with scams. The sub-prime was not called a scam. LOL.

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