“Invest like a bull, Sit like a bear and Watch like a Eagle”
Today, in this blog, we will discuss success Story of Vijay Kedia – one the most renowned Indian investors. He once didn’t have Rs 14 to buy milk for his child but now has a net worth of over Rs 700 crore. This story is of Vijay Kedia, who earned this enormous amount using his sharp brain and deep market knowledge. This man didn’t sell any goods or services. He had to face a lot of losses at the beginning of his journey and faced a lot of struggles until he tasted success in this stock market journey. His journey is full of lessons which are covered in best stock market courses in Delhi. Let’s witness his entire stock market journey with the help of this blog.
Success Story of Vijay Kedia is a quintessential rags-to-riches story. Born and brought up in a Marwari family who were into trading and stock broking business. Vijay also was a keynote speaker at IIM Bangalore and IIM Ahmedabad. He is living proof that an academic degree doesn’t guarantee stock market success.
His family were into trading and stock broking business. Due to this, he started engaging himself in trading with his grandfather when he was 14. However, he always wanted to join the Army due to his passion. But his destiny had different plans for him; soon after, his father died, and he had to join the family business. So, at the age of 19, Vijay Kedia started trading. Kedia never liked broking, so he left his family’s stock-broking business after three years. He started doing his trading without any success.
During his initial trading days, Vijay Kedia made many profitable trades in the market. He received great profit in the first year and became confident about it. But, after one and a half years, he started losing. Then, he realized that one year of success was just a bit of luck. However, he soon realized that a few significant losses quickly destroyed his profits even after making frequent profits. Overall, he wasn’t earning any significant amount from his trading, which was shocking in success story of Vijay Kedia.
Once, Vijay Kedia faced a Rs 70,000 loss in Hindustan Motors in 2-3 days. Sadly, Vijay Kedia’s mother had to sell her jewellery to aid him in recovering his losses. Although he recovered from his losses, this experience hit him very hard, and he decided to discontinue his trading.
After that, he launched a company providing supplies to tea gardens in Kolkata, but his business didn’t do well. Due to the failure of the business, he again started trading. But this time, when he started trading, he was playing a no-profit-no-loss game despite having been in the trading industry for 10-11 years. In 1989, he ultimately decided not to do trading. Now comes the most exciting part of success Story of Vijay Kedia!
Vijay Kedia’s Investment Strategy and learning lesson
In 1989, while starting his investment journey, he shifted from Kolkata to Mumbai, the country’s financial capital. Vijay Kedia identified ‘Punjab Tractor’ at Rs 50, which multiplied ten times in the next three years. This was just the start of success Story of Vijay Kedia. Sadly, his investment was less in this stock. The thought process behind investing in that stock was the cyclical change, he read in an article.
Cyclical change among sectors happened 2-3 years earlier, but now it has become longer. Vijay Kedia read in an article that a rebound is happening in the tractor industry. So, just by reading that article and analyzing whether the stock was cheap, he invested in Punjab Tractors.
“Investing is very simple; we just try to make it complex”- Dr Vijay Kedia
In 1992-93, he picked ACC at Rs 300 and sold at around Rs 3,000 within a year and a half. This buy was at the time of Harshad Mehta. Using that money, he bought his first house in Mumbai.
This profitable investment gave a lot of encouragement to Vijay Kedia. Then again, after the Harshad Mehta scam, he faced heavy losses.
Vijay Kedia believes “Invest only for long term. Minimum time frame for investment is five years, like Rome was not built in a day. It takes time for a story to mature. I always invest in small caps that go on to transform into mid to large caps. Whenever I bought a small cap, people discouraged me. No one liked the stock. For two years the company went nowhere after that it gave multi-bagger returns.” This was the biggest contributor in success Story of Vijay Kedia!
What do we understand from this one should hold a fundamentally good stock for a long period of time. He started his investment journey without just Rs 35000 in hand and currently is sitting over Rs 700 Cr. This is what is taught in stock market training institute too.
During 2004-05, this ace investor picked many stocks which proved to be a multibagger and gave him a return of over 1,000% in the next 10-12 years. In success Story of Vijay Kedia, few of these picks were Atul Auto, Aegis Logistics, and Cera sanitary ware.
In the success Story of Vijay Kedia is also very keen on the management of the company. Suppose management is experienced, aggressive, transparent and dedicated to their business. In that case, they will protect your investment to protect their wealth and reputation because the best management can revive the lousy business. Tata Motors struggled for many years, but once N. Chandrasekaran started managing the company; the company is on an upward trajectory. But even the best businesses can be ruined by bad management- for example, Sathyam Computers. As per best stock market courses a good management is key to a good company.
What is Vijay Kedia’s investment strategy?
He strictly follows the methodology of ‘SMILE’ as a principle of investing in stock markets. SMILE refers to – Small in size, Medium in experience, Large in aspiration and Extra-large in market potential. To sum up, this is one of the most remarkable features of success Story of Vijay Kedia.
Kedia said, “The only way to make 10x or 100x is not to sell your high conviction bet in a bear market. Investors should also review their picks from time to time. One should also invest a lot of money in the stock to make it big. In short, staying put on your high-conviction bet is the mantra to get a multi-bagger return. It is emphasized for stock market courses online free with certificate. This was another contributor in the success Story of Vijay Kedia.
If we look at the recent performance of Vijay Kedia, it is exceptional.
As of end-Q2FY23, Kedia’s net worth is Rs 770.7 crore, and he publicly holds stakes in 16 stocks. Tejas Networks, a telecom service company, is the best-performing stock in his portfolio. The company’s stock price has risen 11x since it was added to its portfolio in June 2020.
He bought a stake in pharmaceutical company Neuland Laboratories in Q3FY20 and in textile company Vaibhav Global in Q4FY17. Its stock price has risen by 308.2% and 285.4% since the purchase. The oldest best-performing stocks in the portfolio are speciality chemicals company Sudarshan Chemical Industries and furnishing company Cera Sanitaryware, both bought in FY16. Their stock prices have increased 243.7% and 164.0% in the past seven years. Kedia also earned approximately 181.3% returns from Elecon Engineering, which was added to the portfolio in Q1FY22.
(Returns as of Q2FY23)
Let’s look at Vijay Kedia’s preferred sector. He has 30.1% of his portfolio invested in the telecom services sector, aggregating to Rs 218.4 crore. He has 16.8% in general industries, 13.1% in textiles, apparel and accessories, and 9.7% in diversified consumer services. Hotels, restaurants and tourism amount to 7.4%, and chemicals and petrochemicals amount to 5.2%. This distribution has contributed to success Story of Vijay Kedia.
Commercial services and supplies, automobiles and auto components, pharmaceuticals and biotechnology, FMCG, cement and construction, and software and services occupy less than 5% of each portfolio.
Meanwhile, the PE of all stocks in Kedia’s portfolio is above their respective sectors, proving that he prefers stocks with reasonable valuations relative to their sectors. This is another contributor to success Story of Vijay Kedia.
Around 11% of the companies in the portfolio trade in the PE Buy Zone while in the PE Sell Zone. Neuland Laboratories trades in the PE Buy Zone, while Vaibhav Global trades in the PE Sell Zone. The rest of the companies’ trade in the PE Neutral Zone.
There are some things that Vijay Kedia feels a person should not do if he wants to make a fortune from the stock markets.
Never rely on other’s tips.
Dr Vijay Kedia has a simple way of finding stocks for investment by connecting the data, i.e. news and information. According to him, that is the only way to find investment stocks. He doesn’t buy stocks that are recommended by others. By just seeing somebody else’s failures or successes or tips given by others, he doesn’t invest in that way. This is even told in stock market free webinar that tips aren’t reliable.
The main reason is that the person giving him information or tips may also be wrong.
“Sometimes even the managements of small-cap companies don’t know how big their companies can become”- Dr Vijay Kedia.
If you deep dive into success Story of Vijay Kedia, the three most important things in investing in the stock market are knowledge, courage, and patience.
Never borrow to invest
Investment from borrowed money is extremely risky and can lead to “instant death”. Less than 10% of the trading population makes money. Also, trading requires particular aptitude, which an average person lacks.
Never be dependent on the stock market
One must never depend on stock market profits for livelihood or day-to-day living. Having an alternative source of income is a must, as that will insulate you from the market’s volatility and give you holding power.
Never repeat the same mistake.
Also, you can see in success Story of Vijay Kedia that he learned something from failure every time he experienced failure. This type of attitude in stock markets makes you stay for a more extended period. When he didn’t see results in trading, he quit trading. While investing during the Harshad Mehta scam, he learned that if one doesn’t invest in a fundamentally sound company. Sooner or later, that investor is going to fail.
Looking at the success Story of Vijay Kedia, one can understand that the stock market is one of the most challenging places to make accessible. Trading was not made for him, but investing made him a billionaire. In the same way, we can invest a considerable amount of money in fundamentally sound stocks for a longer duration to become billionaire investors. If one has no idea about how to invest into stock market, one could opt for top 5 Online Stock Market Courses in India.