Let’s go through Vijay Kedia Success Story , story of one of the most successful and respected stock investor in Dalal street.
Vijay Kedia Success Story
We have collected information from various interview with ace Investor and create this Vijay Kedia Success Story post. We have covered starting from his early career as a trader to his first big break, along with his success formula have in incredible Vijay Kedia Success Story.
Family background and early life as trader:
Vijay Kedia was born in a family with a stock market background. In fact he was the fifth generation stock trader in his family.
He was interested in stock trading at a very early age. At the age 14, his father dided so he had to take stock trading as compulsion. At the age of 18, officially he started trading in Calcutta stock exchangeand and continued to do so for the next few years.
He used say “Stock market rewarded me as it rewards everyone as beginner’s luck. But later on, I experienced more downs than ups and finally learnt that stock market trading is the hardest way of making easiest money.”.
He used struggle during those days and living hand to mount for many years. There was time where he decided to quit trading and started s supply chain business for few months.
Starting of Investing career:
During the trading days in calcutta, one of his friends S P Modi inspired him to invest in stead of trading. Then he started to allocate a part of his money made from trading into investment. Initially he used to invest in stocks recommended by Modi and got money multiplied based on his small investment size. later he identified Punjab Tractor at Rs 50 and invested all his money RS 35000. Luckily stock got multiplied 5-6 times in next 3 years.
Shifting base, Kolkata to Mumbai:
In 1990, with the help of his friend Sameer Kedia, he came to Mumbai, with Rs 1 lakh to try his luck in BSE. Initial period was difficult, he used to stay in low rent PGs there. In 1992-93 Kedia managed to spot ACC which was trading at price RS 300. It went on to become RS 3000 in 2 years when he sold it. That was a big break for him. With that money he was able to buy a house in Mumbai.
Later on he befriended Rakesh Jhunjhunwala. He proudly said to have learnt a lot from RJ. Gradually he spotted more multibaggers and pocketed more profit. One of his multibagger went on to rise 500 times from initial investment. Thats how an invest of of 35 thousands has become 500 CR thousands.
Vijay Kedia founded kedia securities pvt ltd in 1992.
Vijay Kedia belives in order to succeed in business one need to have these three characteristics.
Knowledge: Just like all the ace investors he loves reading company reports and financial data, glues to computer/TV for watching management interviews.’Read, read more and read some more. Gain knowledge as much as possible and never stop reading. Knnowledge differentiates between gambling and investing. When you gain more knowledge you can connect the dots and take wise investing decision.’ Vijay Kedia believes.
Courage: when you have courage you can take more risk and gain more profit in stock market.
Patience: Stock market is volatile in nature. One need to invest for lonf term and to have patience to earn good profit.
Vijay Kedia Investing Philosophy:
Here is the list of investing lessons from ace investor.
On qualification before investing:
I think no academic degree in the world can guarantee you a success in stock market. In my view it is ultimately the experience which you learn either from your own mistakes or from other’s mistakes, that counts. Early investing does helps in the market as one learns from one’s mistakes with a smaller risk at stake. It’s a continuous learning process. It is good to lose money with smaller risk and learn then to make money with bigger risk and earn.
On cutting losses:
Here no one is right for ever. It is a business of strict discipline and total concentration. After being unsuccessful many a times in trading I learnt the art of cutting losses. After this, things in trading changed for me. Even after losing 7 times out of 10 times in trading I would not be in net loss as my losses were shorter than my profits. The one and only precondition for trading in stocks is to cut losses.
On choosing right stock:
A company should have the ability to grow more than the economy and its peers, otherwise the stocks will not outperform. Besides, even if one is 100% sure of the fair price of a stock, one should be mentally prepared to face a fall of 20 to 25% due to factors that one can not foresee and forecast. All big companies were once a small company. If small management has fire in the belly and cares for its reputation, it will make the investor big along with the company.
One need to also check for branding or competitive advantage of the company.
Focus more on company rather than industry. Growth is faster if the ship and wind sail in the same direction.
Fouses on companies which are not very known.
If you don’t have enough information about a company don’t invest.
I realized that investing in 200 companies is not a thrill. One will never be happy. One should neither put all eggs in the same basket nor should he put an egg in each basket. So there I learned to concentrate on the whole market, identify say 50 scrips and select one. Keep a long term vision of minimum 5 years as it takes this much time for a small company to become a medium company.
On exiting a stock:
I don’t decide when to exit when I enter. I exit when I need money to invest somewhere else, or I feel that the price is unrealistic. As long as I am invested in the stocks, its profit does not lure me. I feel this money is not mine till I sell the stocks.
I also exit when when focus of management changes or products changes.
According to me, dividend is an important part but not the sole criteria to invest. Whereas, growth and scalability is the top most criteria of the business.
Good management but bad company is better than bad business with good company.
The key to assess the quality of management of any company is their past record and current practices. It needs to be analyzed that whatever the management has predicted about its company or any group company, has been fulfilled or not. Also, how the management has behaved or performed during a slowdown in the past and how much management is devoted towards the company in which we are investing. Other aspects are, is management ambitious enough to grow and what are the future plans and the capability of its team to deliver.
Vijay Kedia’s 10-point formula for success in stock market:
- Never be dependent on the stock market for your livelihood or day-to-day living. Have an alternative source of income. This will insulate you from the volatility of the market and give you holding power;
- Never buy a stock except after thorough study into the stock’s fundamentals. The stock market is not a gamble. You must also be fully aware of news and developments that affect your stocks and learn to “connect the dots”;
- Invest according to your risk profile. Ensure that other asset classes also have an allocation. This will again insulate you from the risk that equities carry and give you holding power;
- Never trade in stocks. Never use borrowed funds to buy stocks. It is extremely risky and can lead to “instant death”. Less than 1% of the trading population makes money. Also, trading requires special aptitude which a normal person lacks;
- Invest for a minimum period of five years. “Rome was not built in a day”. It takes time for companies to mature and grow;
- Invest only in the best managed companies and don’t worry about day-to-day volatility in stock prices;
- Remember that the “Investment belongs to the market and only the profit belongs to you”. In other words, don’t get carried away by notions and paper profits;
- Book profits periodically. When a stock looks overvalued, don’t hesitate to cash in the gains;
- Be balanced in your approach. Don’t be very optimistic in an uptrend and very pessimistic in a downtrend. Also, never have regrets;
- Do good karma and be a good human being. Stock market is a mind game. Good deeds will ensure that your mind is calm and is able to think rationally.
Watch the video here
. Let us know what do you think about incredible investor Vijay Kedia Success Story by adding a comment below.
If you feel that Vijay Kedia Success Story can inspire and benefit others, then do share this post.