scorecardresearchWhat can investors learn from Vijay Kedia’s simplistic investment style?

What can investors learn from Vijay Kedia’s simplistic investment style?

Updated: 02 Aug 2022, 07:56 AM IST
TL;DR.
We all have heard a lot about Vijay Kedia’s penchant for investing in stocks. However, not many know what makes him so successful in the equities market whose volatility most people fear. 
Vijay Kedia's investment philosophy is largely drawn from his experiences in the stock market.

Vijay Kedia's investment philosophy is largely drawn from his experiences in the stock market.

If you are new to investing in the stock market and are unsure of where to start, look at the stock baskets of all major investors to learn from. You will then know which stocks to buy, hold or get rid of. In a market that has made and broken millionaires aplenty, experience holds more ground than expertise. New investors are continuously trying to integrate their own experiences with that of the veterans hoping to emulate their investing styles and build a strong portfolio that would weather volatility during all seasons.

Take for example Vijay Kishanlal Kedia, an Indian investor and a known name in the investing world. His company, Kedia Securities Pvt. Ltd holds the most number of stocks in several listed companies. His journey as an investor can be aptly turned into a visual content piece showing the protagonist flirting with stocks, falling in love with some while getting rid of many along the way. When asked, this ace investor shared interesting investing lessons that he learned and shared with many.

Independent thinking reaps rich rewards

You have a mind that you must apply to what suits you best. Following the stock market debacle that had resulted from the much infamous bull run orchestrated by Harshad Mehta, Kedia invested his earnings in the ACC Ltd stock. This stock went high at least 10 times in that year, thus, transforming Kedia into a notable Indian investor.

Breathe more, shift less

Investment is like yoga. You must not shuffle around your investments too much. His investment philosophy “Buy like a bull, sit like a bear and watch like an eagle” is a direct reference to how investors must not react sharply to market situations. Good investors are those who know when it is time for them to sit back and watch the game when others are frantically buying and selling their stocks in a huff.

Sit tight after buying the right stock

How many times has it been that we have picked stocks and hoped that they would move quickly? A year passes and nothing happens. We then scratch our heads looking for plausible explanations and deciding the next move. Kedia here stresses the art of picking stocks and then being patient about their next move. It is possible that the stocks you buy do not show results immediately. 

However, if it is a fundamentally good stock, it is bound to yield good returns in the coming years. All you have to do is to be patient and wait. You must have the courage and conviction to stick with your decision sans fear and disappointment.

Invest in businesses that you understand

When you are buying shares of a company, you are actually investing in its business. Put your money in the business that you understand. Good investors spot industries where the sun is shining and not where the sun has set. Kedia explains his averseness to cyclical businesses simply because he does not understand their modus operandi. Also, cyclical businesses tend to diversify a lot, thus, taking them away from their core businesses. Stay invested in industries that you understand better. This will lend you the necessary conviction to stick with a particular stock till it has earned you the desired returns.

Article
We explain hedging through derivatives here. 
First Published: 02 Aug 2022, 07:56 AM IST