The Hindu Business Line : Money Talk

Meet Chetak.B, an MBA in marketing who works as a Consultant with Polaris Software Lab. He shares his investment perspective in a Young Investor chat:

When did you start investing?

I started investing when I was 21 years old, in the final year of my MBA. I opened my first trading account from the money that I had got as a birthday gift from my father.

Which was the first stock you picked, and did you make money on it? Any learning from that experience?

My first trade was a margin day trading, I picked up the State Bank of India stock at Rs 542. The stock declined steadily that day and I sold it at Rs. 535. I was upset and did not turn towards the markets for almost a month. I gathered courage and ventured into the market again with margin trading. I bought and sold good stocks such as India Bulls, Tata Motors and NDTV and consistently made losses! Though my first five trades ever were disastrous, even now, I believe that day trading can yield good returns with the right strategy. But I persuaded myself to invest long term and stop myself going bankrupt.

Are you systematic in investing and do you follow any particular investing style?

I am not a purist; I love to keep experimenting different strategies in the market. Currently I am testing a framework that I have derived from BCG (Boston Consulting Group) Growth Share Matrix for SBUs' (Strategic Business Units).

I plot my portfolio with two parameters, market return rate of the stock compared to benchmark on the Y-axis and relative share in the industry for the market value of the capital of the company on the X-axis. Based on the quadrants they fall, I classify into cash cows, stars, question marks and dogs.

The stocks in cash cows are steady return bets that can be `hold', stars are `high performers', and question marks are also `above-average performers' that need monitoring. Dogs are mostly `sells'. With these quadrants, I give a look, a very hard look at the growth prospective of each stock, before revising the portfolio.

Do you have any specific return expectations on your portfolio?

No, as of now I play in the market for the stimulation and experimenting opportunities it throws up. Return for my new theory till now looks good. In the current bull market, even a novice can make a smart investment. Hence it is advisable that each individual wisely decides her portfolio based on the risk appetite and investment objective.

Best book on investing, if any?

There are too many books available in the market to increase our knowledge on investment. For those who would like to win in the market than just gather knowledge, I would recommend One Up on the Wall Street by Peter Lynch and If It's Raining in Brazil, Buy Starbucks by Peter Navarro. I believe techniques of picking ten-baggers and investing based on macro-economic waves are sure recipes for success in the market.

Your general view on investing in equities.

I recall one of my professors frequent advice, "One should invest in stocks between the age of 20 and 40, and start advising others to invest after 40!"

I am investing now!

Radhika Kamath

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