Aspiring investors always wonder whether they can make good money from the stock market or not. Can it really become a source of regular income? While the stock market may not make everyone rich all the time, it has worked wonders for Senthil, a Chennai-based businessman and member of The 1% Club.
Senthil had learned about stock market investing when he was 17 years old. The first amount he invested, Rs 30,000, was saved from cutting down travel and other expenses. In a few years, he inherited the family business so he had to put the stock market aside and focus on business.
When COVID-19 pandemic hit, the business was closed down and he had no option but to go back to the stock market. In this interview with The 1% Club, Senthil shares how he built a good portfolio and what were the major lessons he learned. Edited excerpts:
What was your portfolio size during COVID and how did you invest later?
Before COVID, my portfolio was around Rs 19.5 lakh, and after COVID, it dropped to Rs 8.5 lakh. At that point, I invested Rs 25 lakh in shares at a discounted price, choosing sectors like pharma, chemicals, FMCG, and banking stocks when they were performing the best. The portfolio only moved upwards from there. In one year my portfolio doubled and I gradually pulled out my money. Now my investment is risk-free, and I enjoy the stock market like a game.
What are the main things that helped you build a good portfolio?
Buy value stocks when the market falls at a discounted price. Hold onto them as long as the company’s performance and the sector are doing well. I don’t decide when to sell; I go with the market.
What steps do you take to decide whether to invest in a company?
Choose a stock: Again, choose the sector first, then find a company with good management, no debt, and increasing revenue with profits.
If possible please share the latest profits you earned from the market.
Till March 2023, my portfolio was at Rs 90 lakh, and within a year, my portfolio went up to Rs 2.20 crore.
How did you make so much profit?
I have expanded my portfolio in the past 3 years and I think the habit of spending half an hour daily analysing the market and my shares has helped me make good decisions. I think if I had proper guidance when I was a teen I would have a bigger portfolio. At that time, there was no Sharan and his 1% Club to help with doubts and topics like tax planning and more.
Also Read: 10 things to know before investing in stock market
What was your biggest mistake during investing?
I invested money in YesBank and lost money. After that, I have learned to cut the losses. One stock doesn’t make a portfolio we should diversify.
Have you started your business again?
Yes, my business has revived and I go to the office only thrice a week. Also, I don’t spend my entire day on the stock market, just an hour. I am only busy when the market falls and I don’t see shortfalls, I see opportunities.
Any advice to people who do stock trading along with their job or business?
My advice is to stay invested. Every dip is an opportunity. As Warren Buffett says, “When everybody is fearful, you be greedy. When everybody is greedy, you be fearful.” Be optimistic: “Pessimists sound smart, optimists make money.” Finally, invest with conviction and stay invested to benefit from compounding. Don’t panic when the market falls; stay strong and invest more. Fortune favours the brave.
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Disclaimer: The above content is based on the information provided by Senthil. The 1% News doesn’t independently verify non-public data reported by interviewees.
