Krishna Agarwal: The investor who owed his adulthood to Lehman Brothers

Krishna Agarwal is indebted to Lehman Brothers. The bankruptcy of the 164-year-old Lehman Brothers and the resultant impact in the stock markets in 2008 did wipe out his investments, but it turned him from a rookie investor into an adult one.

Kolkata-based Agarwal, 37, was fortunate with the timing of the meltdown too. He had stepped into the market just about a year ago in 2007, when he was still a final year student of engineering and the market was recording new highs every day.

The lure

To make a quick buck, the man in his early twenties purchased a few stocks in small quantities. “I was very new to the market and didn’t have any idea about how the market moved,” he recalled. Beginners’ luck worked for him.

He put his savings into Suzlon, Unitech, Chambal Fertilisers and several others.

Dirt cheap

Immediately after the crash triggered by Lehman Brothers, stocks were available at cheap prices. Scalded by the fall, Agarwal began to study stocks seriously, and undeterred, he picked up mid and small-cap stocks such as Relaxo, Astral and Ajanta Pharma in the early phase of growth.

“These three stocks made my financial backbone and created huge wealth for me afterwards. In all three stocks, I allocated small amounts that grew big with time,” he said.

He made money almost 8-15 times in these stocks.

Burning midnight oil

Between 2009 and 2012, Agarwal burnt the midnight oil and picked up skills in both fundamental and technical analysis. His experience 2010 and 2015 was so encouraging that he decided to quit his job and devote full time to investment and trading in May 2015.

In the bull run of 2015-2017, Agarwal found a few other mega baggers including BEPL, Avanti Feeds and Thirumalai Chemicals that helped him grow his capital manifold.

But 2018-2019 turned gloomy as he lost a huge amount of money in smallcaps. “I could not exit in time. It’s easy to buy but it’s always tougher to decide when to exit. One becomes a prisoner to profits. The difficult part is to ride a rally and exit in time,” he said.

Financial freedom

Agarwal loves his free time that he spends mostly by reading and watching web series. He defines financial freedom in terms of “a lot of free time along with an abundance of money”.

However, he has a word of caution to those who are keen to take the plunge fulltime into investing. “You have to be continuously profitable in both good and bad markets. And you must be making more money than your job for at least three continuous years before you decide to switch to full-time investing or trading,” he said.

First love

Agarwal first came to know about the term ‘stock market’ when he was only five. His family had made a part of their fortune through the stock market and he was brought up in a climate where investing was a matter of daily discussion.

As he grew up, Agarwal developed a habit of sharing his knowledge. He has more than 34,000 followers on Twitter with whom he regularly shares information.

Do’s and don’ts

A disciplined approach to investing is vital, he said. “One should not try to catch every horse. One should always maintain a stop loss on trades and investments,” he says.

He also advises against quickly changing strategy. “Work upon your strategy and refine it to perfection,” says Agarwal, who is a fan of Radhakishan Damani of DMart, who grabbed headlines in April this year by purchasing a two-storey bungalow spread over 61,916.3 sq ft for Rs 1,001 crore in Mumbai.