Today, we will talk about a very successful stock market investor Vijay Kedia and his investment philosophies Vijay Kedia was born in a stock-broking family and since childhood, he has been interested in the stock market Even today, he calls the stock market as his first love and since the age of just 14, he had been trading in the stock market along with his grandfather. When he was 14, his father died.
He couldn’t start a business he was interested in due to the lack of the fund and he ended up joining his family business of stockbroking But he wasn’t interested in stock-broking business, so, at the age of 19, he started trading in the stock market He made a good profit from trading in the beginning. Then he thought that he can’t ever suffer loss in the stock market But after a year and a half, he started suffering losses. Then he realized that the initial success was just his luck With the idea of earning huge money in a short span, he would suffer big losses in the beginning Initially, he used to trade with a small amount.
When he made a profit, he would trade with a big amount And this would continue But some days, 1 or 2 bad trades would eat up all the profits earned through good trades And this happened for multiples times with him Once in Hindustan Motors, he suffered a huge loss of Rs. 70,000 with just 2-4 days. That time, he didn’t have much money. So, his mother asked him to sell her jewellery. But luckily, his losses were recovered soon and hence, he didn’t have to sell the jewellery.
After that, he felt very bad and left trading in the stock market. Then, he started to supply materials to the Tea Garden in Kolkata but his business failed He restarted trading in the stock market and after some time, he realized that he didn’t make much profit even after trading for 10-11 years Whatever profit he would earn would eventually end up getting into the loss That’s why in 1989, he decided to abandon trading and focussed completely on investing.
If you don’t know the difference between the stock Trading & Investing, then let me tell you that In trading, shares are held for a short-term i.e from a few seconds to a few months Traders use to make money with the price movements of stocks However, shares, in investing, are held for a long-term i.e for more than one year Investors perform analysis of companies such as the company’s growth, performance, valuation, etc. and prefer to hold the shares for years When Mr Vijay Kedia decided to start investing, rarely any sources were available to learn investing Besides, investors too didn’t prefer to share their investing knowledge with anybody Hence, during such times, Mr Vijay Kedia learned investing in two ways First was Trial & Error which means first try and if you fail, then learn from those mistakes And try better the next time The second was the observation.
He used to observe the failures of other investors, view it closely, and would try to learn from each failure of other investors For example, once his friend suffered a big loss. His friend told him that he mistakenly invested in the stock with a higher PE ratio. His friend told him that he mistakenly invested in the stock with a higher PE ratio.
When Mr Vijay Kedia heard this, he performed an analysis on his friend’s failure and then he learned that the high PE ratio could be dangerous Besides, at the beginning of his investing career, he started studying magazines, newspapers, & companies’ annual reports and he has always kept himself updated reading these Even today, he reads business magazines, newspapers, and annual reports. and watches the interviews of the CEOs and directors and it’s his hobby.
He knew that most stock market-related activities take place in Mumbai Hence, he moved to Mumbai from Kolkata in 1989. In Mumbai, he stayed as paying guest for two years. Punjab Tractors was the first stock of his investing career In 1989, he invested Rs. 35000 in Punjab Tractors. In the next 3 years, Punjab Tractors increased by 4-5 times Then he invested in ACC after selling all the shares of Punjab Tractors By then, ACC was priced at Rs. 300. ACC’s stock kept increasing & soon reached to Rs. 300 due to Harshad Mehta’s Bull run At Rs 3000, Vijay Kedia found ACC more valuable.
So, he sold all ACC stocks & bought an apartment in Mumbai’s suburban area And with the rest of the money, he bought a few other stocks But he suffered a huge loss after the Harshad Mehta Scam when the market crashed About that he says that he invested without inspecting the company’s management & quality and those stocks immediately fell when the market crashed and that he had to pay for his mistakes Then he decided not to compromise even a little about his investment philosophies .
The logistics that he bought at Rs. 14 and sold at Rs. 500, he got a 4000% return on that Besides these, he earned multi-bagger returns in many other stocks . He bought Atul Auto at an average price of Rs. 5-10 In the starting 4-5 years, Atul Auto stocks didn’t witness any movement at all But Vijay Kedia had full belief in his conviction and the company’s management And in the next few years, the price of Atul Auto exceeded Rs. 500 This tells us about Mr Vijay Kedia‘s patience and he even says that every investor must have 3 qualities Knowledge to find the best stocks, courage to buy them in sufficient quantities, and patient to hold those stocks Because often the market takes time to recognize the real value of the stock While picking stocks, Mr Kedia gives the first priority to the company’s management.
He offers a good weightage to the company’s management & he gave an example of why the company’s management is crucial that highway means the company’s/industry’s growth, the car means the company, shareholders are passengers in that car While the management in the driver of that car So even if the car is Alto and the highway means the growth is good & management i.e driver is also good then he will drive the car i.e the company quite well and will make it arrive at the destination And even if the car is Mercedez, the highway is good too, but the driver is bad Then you can guess, what would be the condition of that car as well as the passengers?
Hence, the role of management in the company is pretty crucial He says that investors must inspect the company’s management quite well. When the economy, industry or company were suffering through a hard time, how was the management’s performance? And how did they run the company during that hard time? According to him, if the company’s management handles the company quite well during the bad time Then that management has the potential to take the company forward quite well during the good times You must also look for the company’s future projections i.e whether the company is ambitious about the company’s future growth or not, it must be checked.
When the management changes its focus or the company’s product Or when Mr Vijay Kedia finds the company to be overvalued, then he thinks of exiting that stock. Mr Vijay Kedia plans his investing strategies quite carefully & invests accordingly Many of his stocks picks have even failed but he learned from those mistakes to make big profits Therefore, he says that he paid a big price for what he is today and how successful he is.
He faced many losses and took several years to understand this mechanism If I am here today, most credits go to my many mistakes as I am here because of what I learned from those mistakes For new investors, he suggests them to keep a fixed income because the stock market is quite volatile And you can’t depend on them for a fixed income. Plus, always keep reading about businesses be updated. Because the information and knowledge will help you find the best stocks . He believes that the investors must look at the stock market as an investment . You must not view it as a thing that can turn you into a millionaire overnight. Because to earn an excellent return in the stock market, you must possess that skill, patience, experience So, this is a thing that requires effort Mr Vijay Kedia has witnessed a lot of ups and downs in his stock market career But even in hard times, he followed his passion with perseverance to achieve success Today, Mr. Vijay Kedia holds a net worth of more than Rs. 1000 crores Mr Kedia stays active on Twitter and shares his experiences.
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