Festival season (2019)

#149

This is the best festival season month in 30 years without hyperbole and without a whit of doubt.

            First Gopalan hosted a Diwali lunch, it’s been ages literally decades since I had a meal in a home much as I am only saddled with restaurant meals. It was a noble gesture of him to invite, first time someone did in living memory. Ashish Bansal wished me from South Korea and Neetu spoke to me from Delhi were the other well-wishers. So did Manisha and Vivek. 

            The second highlight of the month was Online Options classes from 21/10 to 26/10. Kapil Mokashi is OTA’s best instructor was my conclusion after this online class. He is mighty committed and gave it his all in terms of vocal energy. It is not easy to speak 4-5 hours at a stretch when your students are spread all across the world. We were of 50 of us with only the chat text messages for our side of communication. I worked so hard squeezing every bit of neurons of my mind to understand Options after September classroom on my own steam that I was primed up for this RETAKE class. Now my understanding of Options trades must be at B+ levels which is very impressive under two months. Remember the stock market is not a History or English question paper where you can fill pages, it is a Maths paper where your answers are either correct or wrong and nothing in between. 
                SBI got me started on FO trades and it was nature’s blessing to watch this slow moving stock that afforded me a lot of room to experiment of various call and put options for a massive learning experience. I was working on Q2 results trades; made handsome monies on ACC, Reliance, Axis Bank, HDFC bank, HUL before Infy wiped everything away for an invaluable lesson: all your profits can be wiped out in one single trade, so managing your risks is imperative. 

            Stock Market trading is the best thing to happen to me in ages or since I was born in a hospital in Andhra Mahila Sabha in 1969. Such a claim may appear a ludicrous exaggeration but let me explain: this is an activity that does not require others, you trade as and when you like, and if you have skill you will make handsome profits. Now tell me which business or money making activity come with so many pluses especially for a world-class recluse? The best thing of the stock market is “it brings out your true colours” as I found myself GREEDY for rewards and I also discovered that I am an AGGRESSIVE trader where my gut plays a huge role. Kapil added a note of caution: you have to manage risks to earn consistently which for me will be a Veda Vakku (voice of God).

            After three weeks of FO trades in six stocks I wrote down my rules of trading:

-         a)  Never fish in troubled waters especially when a stock is rising like a rocket or falling precipitously. On the surface it looks easy money but it can wipe out an entire month’s efforts. Remember this golden rule always: the markets never give easy money, and if it does on rare occasions it will quickly take it away.

-          b) Be smart while covering profits especially when you fear that the stock will retrace quickly and you take a premature hasty exit. My simple strategy is: the profit now looks good but I am not finished. I will buy a PUT option to protect my position and wait for the stock to float before I do a “profit booking” a word every trader loves more than his wife’s kisses and hugs

-          c) Lastly don’t second guess what is going to unfold at the start of the day for no one in the universe can predict the movement of a stock except you can gauge its trend - up or down or sideways. Your job is to plan your trades, enter them without haste at the planned entry points and wait for it to play out without anxiety, Sure the market will behave with a mind of its own but your job is to manage risk. 
            The stock market is always right and it rewards DISCIPLINE and PROCESS. One can make 5 lacs a month on a trading budget of 10 lacs on Future & Options trade if you follow a few more operating SOPs: a) Never take trades in the first 30 min or last 30 min of the day when the market is most volatile. b) Never lose more than 10 k on a trade even if God were to tell you that the eleventh thousand the stock will turn in your favour. As a rule I don't trade on Pharma and IT stocks for these are news based (FDA of USA gives a rating and that stock will lose 10% in 10 min or even IT which is very susceptible to US-INR exchange rates which is beyond your control). It is hard earned money, unfortunately 95% of retailers come to market without knowledge and discipline and lose their life savings. 

                  Moving away from my pet obsession of trading, I was excited with Palavakkam property where the builder quoted 80 lacs and I was hell bent on owning it until Pandian saw the figures and said it was a white elephant. He said, “Sathya this property is not worth a penny more than 70 lacs for this man has charged you exorbitant construction costs. The value of the property changes as per location but construction costs are nearly always the same. It cannot exceed 3000 per sq feet and at that rate you should be asking for marble flooring and imported closets.” I told him, “You are a true friend and saved 10 lacs of a foolish man.” October saw me get introduced to Raghu, my ties with Gopalan has grown strong and my faith in Pandian reinforced – all god’s act of grace.

I will end this post with my cook Thangam’s precocious granddaughter tales. Ashmitha at 4 years old is one of the cutest kids I have seen in my life (forgive the hyperbole for I see very little of kids). She once accompanied Thangam and I had to humour her on the guitar. I gifted her some dolls to play. The next week she came all excited for more dolls but this time I was tight-fisted saying, “No, play with these dolls here and no taking it home.” The little girl said, “I don’t like your guitar or your dolls,” to show her displeasure. And when Thangam left she taught her child, “Say goodbye to uncle,” and Ashmitha said this to an unforgettable cuteness, “There is no need for goodbyes.” I find little girls much smarter than boys at that age, they dominate a conversation and take charge in their games but when a girl reaches puberty she loses all innocence and smartness and humour that a boy doesn’t. I tell Thangam, “Give this girl the best education. She has an amazing grasping mind and she is never at a loss of words. She has that actor Savitri's kind of anger at the nostrils that is more funny than toxic.” Really a blessed child, she looks set for an IIT or Harvard from these initial signs.