Sanjiv Bhasin is a market veteran who has seen several cycles of the Indian stock market. He is also a popular YouTuber with nearly two lakh subscribers and considered an intelligent stock picker who has spotted several stocks which have delivered big returns in the long run. At present, he is working as a director at IIFL Securities and his column Market Mantra is read by over seven lakh people daily.
Money9 spoke to Bhasin to understand how he identifies winners on Dalal Street and how investors can avoid pitfalls.
Q: What parameters do you check while picking a stock?
Bhasin: While analysing a stock, I check management background, market capitalisation, valuations, peer groups and most importantly ground realities as balance sheet may not represent what ground realities tell me. The recent trend is with pharma companies who are making money very rapidly along with pathology laboratories saying they are philanthropic. However, they are making money from your pain.
Q: Which stocks have delivered you multibagger returns?
Bhasin: Well it goes back to over 30 years when I entered the stocks market and picked up Tata Honeywell in 1988 at Rs 51 when the company was newly listed with the Tata-Honeywell joint venture. My uncle told me to study the details as Honeywell was a global leader and the demand in India would be tremendous over the next 5-15 years. I also got rights in 1989 in the ratio 3:5 at 35 and had 1,650 shares at an average price of Rs 45. In 1999, I sold major part at Rs 750 to buy a property which has also gone up manifold. The stock is presently trading at Rs 42,920. I still have 275 shares of the company in my portfolio.
The other stocks which I picked were Havells at Rs 15 in 1997. At that time the company had a market capitalisation of less than Rs 50 crore. With a share price of Rs 1017, the company now holds a market value of Rs 63,700 crore. I believe the company may cross Rs 1 lakh crore market value in the next two years as brand awareness and consumer electricals do very well.
Q: How do you pick the winners?
Bhasin: Well some part is luck, some diligence and some faith as holding on when the stock exceeds your expectations is not easy. I take my capital out when the stock exceeds my target, but let the profit remain in the game. This helps me to ride the winners.
Q: What are the lessons you learnt from such mistakes?
Bhasin: Trusting market talks despite knowing that I am headed into uncharted territory was one of my faults in my early days. Besides, no background checks rather chasing the momentum, excessive position through leverage and averaging the falling stocks were my other big mistakes of in my investment journey. With age and maturity now I can manage to cut my losses at first sight of uneasiness and hedge leverage as protection of capital is paramount in the stock market.
Q: How does your typical day look like and what are your hobbies?
Bhasin: I wake up around 6.30 am daily and write Market Mantra for IIFL clients. I write it on the spot seeing daily overnight market behaviour of stocks, bonds, currencies and macros. It also includes two buy/sell daily calls for traders as well as investors. These calls had a success rate of over 73% in the last five years. Then prayers and off to work. After the market closing, I regularly go to the gym from 5.30-7 pm and run for around 45 minutes to one hour as running kills the stress and recoups energy.
I have also done a PHD in mundane astrology which started as a hobby around 22 years back and now has become a daily part of life. I also give advice to people on stress in personal life. The evening gets through with this and then spend time with the family over a meal.
Q: Do you follow any investment guru and which are your favourite investment books?
Bhasin: Well my father and uncle were very well known investment consultants and they have imbibed in me from the beginning that markets are always right and you will always be wrong. So, never let the ego dominate the mind or you will lose. My favourite books are One up on Wall street, Turtle Trader and now I am reading Beating the Street by Peter Lynch.
Q: Going by your experience, what would be your advice to investors?
Bhasin: Never mix the trader and the investor part as you trade the price while you invest in the business. Always remember that the trader has to respect his entry and exit. I also learnt in the Mumbai locals from a Gujarati trader – “Bhav Bhagwan Che”.
Q: Which sectors do you think will catch up once the second wave of Covid-19 settles down?
Bhasin: Cyclicals, infrastructure, mid cap banks, consumer electricals and discretionary.
Q: Which is your favourite food, film star and movie?
Bhasin: I am a hardcore Punjabi and yet vegetarian so simple rajma rice and paneer pakora are my favourites. My favourite actor is Govinda and I like his movie Partner.
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