We make mistakes to learn something from it. When we start something new, inevitably we are bound to make mistakes and learn from it. When I started out my journey in the stock market, I made a lot of mistakes and learned a lot of things from it. Here are some of the mistakes I made while trying to make money in the stock market and what I learned from them.
Mistake 1- I bought Hindustan Zinc when it was trading at 183 and declared the dividend of 24 a share. I bought it solely for the high dividend it was paying. I thought after the dividend the price will again come at 183 and I will sell the stock after realizing the dividend.
Yup, I got the dividend. The price came to 183 again and I sold my holding in a haste as the price was not moving that much and it took a long time to reach 183 levels.
Soon after I sold my holdings the stock kept on climbing up and in 6 months it almost doubled and recently it declared a high dividend again.
I felt like oh my god, what a big mistake I made. I bought Hindustan Zinc in bulk and could have made a lot of money out of it. But like all mistakes, you can see your mistakes only in hindsight and you are left without any opportunity of correcting it.
Lesson learned: Keep patience! If the stock isn’t moving after you purchased it, it should not concern you. In fact, stop looking at the stock ticker daily. You need not buy/sell daily. Just keep holding your stock and if you have bought a valuable business, eventually you will make money (A LOT OF IT). It takes time for any business to make money and in turn make money for you.
Mistake 2- I bought Fiberweb on the recommendation of a person on facebook. Yup, you read that right. I doubt that the person might be an operator. I called the person after asking mobile number from him. He said that he manage funds for the FIIs. He told that he visited the factory of the company at Daman and assured me that I will gain. He was continuously posting on the Moneycontrol forum that it will be the biggest multi-bagger in 2017.
And he was also posting on the Facebook groups that it will be a multi-bagger. He was promoting the company. I doubted that it was pump and dump scheme.But still, I bought a lot of shares at 50. One day at morning the person messaged me that the company is a fraud and I should sell my holdings immediately. So I sold my holdings in panic at 71 and realizing the gain. That day the stock hit the lower circuit. He started messaging in the Moneycontrol forum that it is fraud company and everyone should sell it. And he will not take responsibility for any loss. Fiberweb was unpopular and he was the only person who used to message on the forum.
Though I gained from doing this. But fiber web is trading today at 368.I still don’t know what the person intended to do.
If I hold on to the stock I could have made a lot of money. But I sold it in panic as I was new in the market at that time.
Lesson Learned: Never take a tip from anyone. Taking tips from anyone will inevitably lead to disaster. Do your own research before investing in any stock. And if you don’t have time, take professional help. Be disciplined in your approach.
Mistake 3 – I bought option call of Wipro just before the day of result. I thought that the result of Wipro will be good and the stock will fly like anything. In fact, the stock was climbing high that day. My broker called me to sell my option call as I was in good profit. I thought that the results will be good and the stock will climb further. I was damn wrong. The result came out in the evening and oh god! The result was crap. I was in anxiety and thought I will sell the call option just at the market opening. I was frightened to see that that price was 30 Rupees below in the premarket session which gave me a good Idea that I lost the entire option premium!
The market opened at 9.15 am and I sold it immediately. It was a huge loss.
Lesson Learned: Never speculate! If you want to trade in the market, do it professionally. Do not try to guess or gamble. Do your research first. Then only try to make money from the market. Learning should be your first motive. Earnings will come as you will learn.