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Small Investments, great returns-- SPECULATION Strategy in Stock INVESTING, explained! - YouTube
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hi everyone welcome to today's video i
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hope all of you are doing well on
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today's video we are going to speak
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about sensible speculation because no
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matter how much i talk about investing
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only in fundamentally good stocks and
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looking at and understanding decoding
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businesses and using technical
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parameters to investing people will
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still end up speculating is speculation
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always bad the answer is no because we
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as humans have a tendency to gamble that
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is what prompts us and prods us to
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speculate so from that particular
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perspective it is okay to speculate but
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it is very important for us to sensibly
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speculate so that is what i'm going to
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teach you today it's going to be a super
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interesting video also a very quick
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shout out to our sponsors for today
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which is ditto it is okay to speculate
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in markets no problem but please don't
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speculate with your health therefore
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please go and check out ditto they allow
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you to understand more about your
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insurance requirement you can schedule a
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free phone call with an insurance expert
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by using the links it will help you
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understand how much premium to buy what
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type of insurance to buy there are
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multiple nuances that you need to
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understand and experts from ditto will
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help you decode that so first and
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foremost let us understand what is the
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meaning of speculation in very easy to
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understand language now what happens is
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that many a times you don't understand
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the business fundamentals you don't look
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at the technicals you don't probably
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even understand what the business is
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about and you end up buying that stock
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or if you have it you end up selling the
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stock
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now what are some of the factors or
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tools that drive the speculation is
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number one thing is news for example a
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couple of months back there was this
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news in irctc where an announcement was
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made during the market hours that
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ministry of railways is going to extract
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profits out of irctc then what happened
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the stock price tanked quite a lot
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during the day and towards the end of
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the day a news was released again that
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you know this decision has been rolled
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back so a lot of investors lost money
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why because they were speculating they
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did not understand why they were getting
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into irctc in the first place what was
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their buy target what was their cell
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target so not having a fundamental
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understanding of the stock and entering
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into it is just a recipe for disaster so
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that is what pointless speculation is
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therefore it is very important for us to
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have a sense as to why we are purchasing
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something or why we are not purchasing
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something why we are selling something
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why we are not selling something all
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these things should be clear in your
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mind what other things drive speculation
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for example you will hear your friend or
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some uncle in the path that you know
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what beta indian government is going to
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sell this particular company so go and
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buy it then you get super excited you
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come back home and buy that stock and it
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turns out to be a disaster so that is
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again speculation you are just simply
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trading on news another key form of
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speculation is that big investors keep
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on releasing news that rakesh indian
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wallet did this or like you know some
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other investor in india did this now
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they are doing their stuff you need to
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understand why you are buying or selling
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some things so this is a very important
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aspect around speculation that
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speculation is news driven or it says
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random information driven so please
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don't act too much on news this is a
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very important aspect because media
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itself is owned by a lot of corporate
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houses i will not speak further on this
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you guys are smart so you will
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understand my point that i am trying to
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communicate so from that perspective you
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must understand the difference between
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bad speculation and good speculation bad
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speculation is what i just described
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that you're just acting based on random
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information please avoid that this will
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help you save a lot of money in terms of
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not taking an entry into bad bad stocks
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so what is good speculation so good
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speculation simply means that the entire
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picture of something is not clear to you
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but you are still acting on partial data
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for example before taking an entry into
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any stock you must understand its
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business prospects you must understand
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what the company exactly does the reason
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why i have criticized paytm's business
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model is because this aspect what it
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does business in is not very clear how
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it makes money is not very clear how is
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it profitable is not very clear second
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key thing the fundamentals of the
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business should be very clear and also
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there should be some kind of technical
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indicators that are forming if all three
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things are happening then it's a good
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sensible purchase but what happens many
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a times is that the entire picture on
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all these three things is not clear let
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me give you an example for example when
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we go and try to buy an ipo what are we
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doing we are essentially speculating
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because the information about the firm
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is not very clean or clear it has no
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technical history the business models
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have not been figured out so what are we
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doing by jumping into the ipo market we
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are literally speculating there is no
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harm in speculating but it should be
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done sensibly so now let us understand
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how we can speculate more sensibly and i
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will explain a simple four point process
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step number one is that you should pick
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the right assets to speculate now right
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assets can be of multiple types so let
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me use two examples to illustrate my
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point so first let me pick my favorite
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stock which is hul and then b let me
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pick a extremely volatile asset which is
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bitcoin right bitcoin now i would argue
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that both of them are really good assets
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to speculate now why is that you need to
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understand the flow so let me show you
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the trading history of hul and what you
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will see is that right now
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hul is from its peak it is below roughly
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15 right
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and if you see that it is trading below
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its 200 day moving average line also
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right 200 day moving average line right
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so this is an information that is very
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clear very easy for us to understand now
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if you check the quarterly results for
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hul you will clearly see that the
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profits are also up revenues are also up
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so all good good things happening in the
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company there is no massive problem per
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se so right now in hul if you just
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simply use your brain you will quickly
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realize that if you compare the risk
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reward equation
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the risk is low in h12 and rewards are
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decent these are decent because at some
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stage this will go up by 15-20 percent
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and there are okay returns to be made
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it's not as if that you are making mad
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money here but because you are taking
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very less risk the risk adjusted returns
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are decent enough so that is what a
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sensible speculation would look like now
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let us compare the other end of the
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spectrum so let us go to something like
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bitcoin so now if you do a risk reward
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analysis for bitcoin you will see that
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bitcoin is down by roughly 38 from its
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recent peak right now bitcoin is also a
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very volatile asset it can fall quite a
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lot again but the history shows us that
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bitcoins comes back it falls by roughly
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eighty percent after its every halfing
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cycle and then it makes a new peak this
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is what data and history tells us but it
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also tells us that bitcoin is a highly
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volatile asset right
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it's a highly volatile asset so what is
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your risk reward here here you should
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think long term for example if you
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invest 100 rupees right in the bitcoin
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in 10 years if the crypto market
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survives what will this become it will
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at least go 100x because the regulatory
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clearances will be there all good good
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stuff institutional money will also flow
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so bitcoin will be solid what is the
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worst case scenario that hey no
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regulatory clearances let's say the
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entire world bans crypto movement and
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this falls to zero so how you should
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speculate on bitcoin it's very easy
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don't put insane amount of money if
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you're looking to take a large bit of
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positions on speculation then speculate
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with something like hum so this is the
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first key point that you must understand
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about speculation that you must pick the
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right asset depending on its risk reward
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ratio now the second key method of
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speculating is that you must get in
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early especially if you are trying to
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catch volatile assets what do i mean by
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this let me again give you an example
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for example people tend to bet a lot on
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ipos and usually what's the thought
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process of betting on ipo that you know
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what i will bid at 100 rupees and the
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listing will happen at 120 rupees and i
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will make 20 gains in a matter of a
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month and i will move out
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now please understand that here you are
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getting in early on a highly volatile
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thing like an ipo the listing gains
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might or might not happen and you might
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end up taking a loss so since many of
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you are new to the stock market so let
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me just quickly explain this point of
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ipo as well so what happens is you will
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see that paytm shares listed at rupees
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1929 against ipo issue price of 21.50 so
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what does this mean it simply means that
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you as a retail investor were issued
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this ipo at 2150 rupees but the stock
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got listed at 1929. so instead of going
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up it got listed at a lower price and
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then after it started trading and this
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is what the chart looks like it kept on
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falling and falling and falling and now
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people are sitting on a massive loss 40
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45 also and if you go and ask someone
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that hey why did you purchase paytm's
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ipo because that poor person wanted to
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make 15 listing gains on it now listing
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gains does not happen all the time and
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sometimes you get stuck with things like
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paytm and you end up taking massive
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losses in it now the point that you need
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to understand is that you are purchasing
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a highly volatile thing so the returns
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or the expected returns also should be
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commiserate the word of the day today is
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commiserate so let me know what does
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that mean a better approach here is that
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if you're willing to bet on something so
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volatile go to the ico market and let me
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show it to you for example here you see
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that i'll pick a random coin so i'll go
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to coin market cap and then i will go to
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a really random coin which might have
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gotten listed recently now ico's initial
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coin offering is very similar to ipos
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ipos happen in the stock market and icos
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happen in the crypto market so if you
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take a look at mars colony for example
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and if you check this chart so it opened
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at roughly here right 15 14
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and it made a high of roughly 37 in a
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matter of how many days in a matter of
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two months roughly right in two months
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the coin price more than doubled so it
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makes sense to do ico investing compared
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to ipo investing therefore i invest in
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icos but i do not invest in ipos now in
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case you want a video on how to invest
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in icos i'll make a separate video on
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that now i'm not suggest randomly
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picking one coin from the coin market
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cap and showing you you can go and do
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this exercise and this method works 7
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out of 10 times very easily speaking so
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rather than speculating in the ipo
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market speculate in ico market that is
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much better now the third thing that you
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need to keep in mind in terms of
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speculation is that please start with a
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small position
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either upward average it or downward
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average now what do i mean by that so
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let me show you an example now a few
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days back i spoke about the stock called
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as dmart now dmart is a fundamentally
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good stock it's a good asset there is
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nothing wrong with the stock and i got
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so frustrated because i wanted to buy
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this stock and the stock just never felt
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right it just kept on going up and up
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and up and i had been waiting for it to
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fall and it never felt finally i lost my
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patience and i purchased a little bit of
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it but whenever i speculate whenever i
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am not fully convinced about buying
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something i take a very little position
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in it so i put in only 10 percent of my
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money that i had to put into dmart for
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example if i had to invest 5 lakhs on
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dmart i would only take position of 50
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000 then i purchased it i watched its
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performance for a couple of weeks and
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today it fell by five and a half six
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percent so what did i do i purchased
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additional quantity of it i increased my
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position by 50k now if it falls more
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i'll purchase even more so this is
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called as downward averaging similarly
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if you have purchased a good asset if
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you are not fully convinced about its
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price movement whether it will go up or
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down purchase little quantity track its
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performance and then upward average it
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or downward average it now fourth and
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final point is that regarding your
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speculation consider building a
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speculation portfolio now i keep on
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saying diversification a lot of people
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comment that akshay you keep on harping
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on the same thing diversification
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diversification diversification because
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i don't want you to take a loss in the
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stock market at least hedge properly and
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the best way to hitch properly is
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diversify i have seen i have personally
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read messages where people invested 50
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percent of their entire portfolio in one
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single stock and that stock completely
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tanked and they never came back to the
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stock market so please don't do this
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kind of stuff please diversify please
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consider building a speculation
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portfolio for example if your 10 lakh
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rupees is the total portfolio don't
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invest more than one lakh rupee in
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speculation stock what do i mean by
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speculation stock i simply mean stocks
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where you're not sure of for example it
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could be dmart in my case it was dmart i
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was not sure about its price performance
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the stock just did not fall for a very
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long period of time i got frustrated
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purchased it it fell by five six percent
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the moment i purchased it therefore the
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final tip from my side is that please
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have a speculation portfolio you don't
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need to go and invest all your
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speculation money in just one stock so
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now let me take you to the final part of
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the video where i will show you how to
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build a speculation portfolio in the ev
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industry with one lakh rupees okay first
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and foremost why do i feel that this
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entire ev industry or entire eb
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narrative right now is a speculation
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oriented narrative because i've been
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tracking it for the last one one and a
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half years and it's very very clear
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right now that there is no major market
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leader in the ev space in india a lot of
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tata motor holder shares will start
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blasting me in the comment section that
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you know what the tata motors is going
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to win the race i don't know and there
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is no evidence that it would do yes it
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has some good things going it has
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already been factored into the price but
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that does not give me the confidence
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that hey you know what tata motors is
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going to beat tesla also no i don't
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think so so if i have to invest let's
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assume that i have a big speculation
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portfolio my total portfolio size is one
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cr then i'll keep 10 lakh rupees as
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speculation portfolio and out of that i
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will invest 1 lakh rupees in the ev
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industry so that is what my speculation
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portfolio for ev would be so what type
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of stocks or investments will i make in
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the eev industry so i'll make three
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specific types of investment with this
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one lakh rupees right now first and
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foremost i will take positions in stable
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companies now what do i mean by stable
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companies these would be companies like
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maruti or hero motoco because nothing is
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stopping these companies to get into the
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ev space they are already experimenting
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with it but these stock prices of maruti
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and hero motor cough has not skyrocketed
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like tata motors stock price has so i
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will purchase something like maruti
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suzuki or hero motor co-op whose stock
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prices have not skyrocketed like it has
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done for tata motors so these are stable
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sensible stocks and these will skyrocket
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the moment these companies start working
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on ev projects and they start gaining
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traction so i will invest roughly 33 000
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in these type of companies the second
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set of assets that i would invest in
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would be startups these would be
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companies like sun mobility so sun
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mobility is one of the leading providers
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of energy infrastructure and services
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for ev usage right so these are the type
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of companies which are unlisted which
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i'll try to invest how to invest i will
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tell you in a minute you can pick
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companies like ether energy so third
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energy is an indian ev company that
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manufactures electric scooters it has
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also established ev charging
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infrastructure across country called as
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ether grid now you'll say actually these
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companies are not listed how will i
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purchase them on the stock market there
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are different options i would don't want
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to outline it on this particular video
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but there are several companies through
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which you can make alternate investments
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i will come out with a specific video
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with this topic if there is enough
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interest but the bottom line is that
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retail investors can invest in companies
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like this there are multiple platforms
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through which you can do it i am not
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naming the platform right now because
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some of you might jump make these
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investments and it can backfire so i
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don't want to say that as of now but
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i'll definitely make a specific video on
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this topic but for the purpose of our
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portfolio i'll pick five six such
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companies and invest 33 000 rupees in it
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five six companies not two three
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companies five six companies where i
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will invest this thirty three thousand
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rupees why because these type of
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companies can go from x to hundred x
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companies like maruti cannot go from x
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to hundred x they are stable they will
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not become zero but they will not go to
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100x on the flip side these type of
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startups can go from x to 100x they can
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also go to complete zero therefore vc
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model for us third and finally i will
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invest my remainder of the money into
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infrastructure battery related suppliers
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or oems for example i have already
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purchased something like raja it is
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going down it's fine i have invested
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little bit of money only in it again you
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could consider investing in companies
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like tata power excite these are all
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infrastructure related place just double
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check once if these companies are
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inflated or not that's the only scenario
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that i'll keep in mind because if a
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stock has already given a lot of run up
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especially with these story stocks they
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can fall a lot too so the simple
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approach that i am taking in terms of
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hedging my ev portfolio is that
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aggregate a bunch of companies together
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which are attacking different different
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spectrums for example startups are
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attacking completely different game
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integrators like tata motors or maruti
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are playing a completely different game
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then battery manufacturers like amara
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raja or excide are playing a completely
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different game so i am hedging my bets
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across the entire ecosystem because i
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know for a fact that hey ev ecosystem is
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going to get developed that is only
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going to happen right now there is very
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less information on it so we can't do
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much we just have to wait for the
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winners to emerge then we will take
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bigger positions in it but from a
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speculation if we can't wait to get into
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this ev space hedge your bets and try to
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invest in different range of companies
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so a very quick summary of this video
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speculation no matter how much i talk
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about fundamental technical analysis
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people are going to speculate that is
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just basic human nature therefore we
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must understand how to speculate
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properly adopt the specific four step
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strategy that i spoke about finally if
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you are taking positions in any story
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based industry like for example evie
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industry then be well diversified then
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pick companies that are attacking
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different different channels so i hope
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you enjoy the video give it a thumbs up
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and also check out bitto and i will see
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you next time
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you
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