Ashish Chugh: An investor who does not look at the markets

Ashish Chugh is an investor who doesn’t look at markets. He looks at stocks, when he is not spending time with his family, or visiting bylanes of Delhi to pick his favourite street food.

“I like chana batura, dosa and Chinese food,” he says with a smile.

His stock picks are eclectic too.

Diversified

Stocks such as Bajaj Finserv, Avanti Feeds, Maharashtra Scooters, Natco, Heritage Foods, Thirumalai Chemicals and TCI helped him to achieve financial freedom over the years.

Chugh started on his journey as an investor in 2000, after he pocketed degrees in electronics engineering. He also got an MBA degree before quitting his family business after a very short stint.

Bear hunt

“My journey to financial freedom started in 2003 when the markets were in a bear phase and I had very limited capital to invest. Generally, for most people, the graduation from a salaried individual to a full time investor happens in the peak of bull markets after they have made a lot of money – in my case it was the reverse,” he says.

Though he had limited capital, he did not have the burden of any EMI or house rents since the house was owned by his parents.

With this small element of luck of his side, Chugh set out to scan the market for smallcap stocks but sound fundamentals.

Bottoms up

The childhood memories of Sherlock Holmes of crawling on the ground with a magnifying glass in hand somehow suits Chugh’s description as an investor, looking for signs of potential brilliance just as the sleuth combed a spot of crime for clues.

Like a true detective, Chugh has spotted multibaggers when the stocks were beaten to abysmally low levels due to certain short-term negatives.

“I got lucky since small cap stocks saw a big run up between 2003 and 2007 and many stocks went up 5 to 50 times. I was fully invested in equity. At the right place at the right time you may say, and that is how the capital to invest was created,” he recalls.

Gift of the gab

Soft-spoken and humble, Chugh’s gift of the gab has been appreciated in the investor circle and aspiring investors, who regularly follow him on social media, driving his number of followers on Twitter to over 1 lakh.
In Dalal Street he is often referred to as Hidden Gems, the name of the subscription-based newsletter that he launched in 2003. The subscription revenues covered his household expenses enabling Chugh to invest a small capital for investment.

Hidden Gems

He also appeared in some regular show for a TV channel called Hidden Gems. It was focussed on small companies which were unexplored or under the radar of most investors.

Though he names a few such as Peter Lynch’s “One Up on Wall Street” and Ralph Wanger’s “A Zebra in Lion Country” as his favourite, Chugh loves to peer at annual reports of companies more than books on investing.

But he has a high level of appreciation for the warriors on the ground such as Rakesh Jhunjhunwala, Madhu Kela and Sunil Singhania. “I follow Madhu because of his never say die attitude. He has seen many ups and downs in the market because of his aggressive style-but every time he is down, he bounces back with a vengeance.”

Mutual funds

His advice for the new investor: take the first step through a mutual fund or professional money manager. Keep a small part to venture in the equity market to learn the ropes.

However, he advises to begin early.

Rent a house

“Buying a house can wait. The rental yield on residential in India is still typically at 2-2.5%, so it makes perfect sense to stay in a rented property and utilise the surplus for equities,” he reasons.

“Else the wealth creation journey will be slow since you would only be paying for the mortgage with very little surplus to invest.”

He also advises investors on risk management, valuations and stay humble. “One should stay nimble-footed and flexible. Investors should also remember that learning comes in bear markets,” he says.

Nothing flashy, much like the plain Jane but filling dosa he loves so much.