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This Kolkata Marwari hit D-Street with borrowed money & made his million

He made his money by spotting several multibaggers, including Page Industries, Titan.

, ETMarkets.com|
Updated: Jun 20, 2017, 12.57 PM IST
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Basant Maheshwari s Investing Ideas Exclusive
Basant Maheshwari is a market veteran from the Harshad Mehta days. In fact, Maheshwari calls the ‘Big Bull’ – infamous as the kingpin of the 1992 securities scam – the pied piper of the Indian stock market, as he managed to draw many people to Dalal Street.

Also Read | Dons of Dalal Street

“As a college goer, I had no clue what investing is all about, but I did not care much. All I knew was that money does not just add up in the stock market, it multiplies. I jumped in with whatever money I could borrow from my grandmother,” Maheshwari recalls.

He has been investing in the market ever since, riding the tides that Dalal Street has seen all this while, and learning the tricks of the trade the hard way.

This Marwari from the City of Joy, Kolkata, came in from business background and dived headlong into the game of snakes and ladders in the stock market.

He made his money by spotting several multibaggers, including Page Industries, Pantaloon Retail and Titan, which multiplied his wealth and that of his followers many times within a few years.

Maheshwari claims some of his top picks have generated up to 40 times returns during his investing career.

He treads a very uncertain turf to make money, but swears by ‘certainty, surety and predictability’ as his investing principle.

“We buy high quality sectoral leaders, growing in the north of 30 per cent with the potential to scale up. We look for companies with honest managers and a dividend yield with free cash flow,” Maheshwari told to ETMarkets.com.

He admits it is not easy to find stocks with these qualities. “They exist only in theory. At a practical level, stocks are like human beings. There is nothing called a perfect thing. So, the tradeoff keeps on happening,” says he.

Table: Top historical picks

This Kolkata Marwari hit D-Street with borrowed money & made his million


The journey and fan following

Maheshwari has been running his portfolio management service (PMS) since November 2015. The current portfolio size is around Rs 200 crore, with a weighted average AUM return since inception of 48.2 per cent on an annualised basis.

“Patience is the key to making big money in market,” says Maheshwari, “as is one’s ability to hold your investment for the long term.”

Within the investing community, Maheshwari was known till recently for his blog “The Equity Forum”, which he has since shut down to focus on his PMS.

At the time of its shutdown, over 60,000 people were following Maheshwari’s blog. About 26,500 of them have since started following him on social media platform ‘Twitter’.

“We used to debate, discuss and decode investing - day in and day out. As time passed by, we opened up an advisory which also did exceptionally well. Profits grew, and so did the community. Subsequently, my members wanted a better concise version of all my thoughts with easy referencing. And they kept pressuring me to write a book on investing. I also wanted to document my learning and experience in the market,” says Maheshwari.

His book, The Thoughtful Investor, hit the market in 2014.

Looking back, Maheshwari says the speed of information flow has been most noticeable change in the market in his lifetime as an investor.

Stocks that worked

Maheshwari says his first two picks were Hindustan Motors and Reliance Petrochemicals – way back in 1992 –which generated 100 per cent returns. His first two multibagger stocks were Pantaloon Retail (2003-08) and Page Industries (2008-2015), which delivered nearly 4,000 per cent return within a short period.

Television18 delivered him 14-times return during 2003-07. Hawkin Cookers and Titan multiplied his wealth six times during 2008-14. Zydus Wellness gave 2.5 times return during 2010-2011.

“We had not started the PMS that time. These stocks were held in personal capacity, though several people who followed my blog also made money in these stocks,” Maheswari recalls.

Maheswari didn’t name the stocks he currently holds in his portfolio, citing compliance issues, but said he was “super-bullish on the NBFC and consumer segments.” He says these two will be the dominant themes in the Indian market for the next decade.

Latest shareholding data of BSE-listed stocks didn’t throw up any names where Maheswari holds 1 per cent or more.

Where he failed

Winners are not afraid of losing. But losers are. Failure is part of the process of success. People who avoid failure also avoid success. Robert T. Kiyosaki

Maheshwari doesn’t shy away from talking about the bets that went wrong. In fact, he failed repeatedly in the initial phase of his investing career.

“I used to buy low-priced, low PE stocks trading near their 52-week lows and it took me nine years to get my strategy in place,” he recalls.
“Ever since, the failure rate has gone down drastically, and except for a couple of instances, we have not failed at all. Those instances came whenever we tried to force an opportunity when none existed.”

Maheshwari said in 2008, he did not see growth anywhere, but bought Voltas and thought it can grow 30 per cent. He lost almost half his investment in less than six months.

Early 2016, Maheshwari tried to buy small positions in smallcap and midcap segments, thinking that they should help him diversify. “We paid the price, as these companies were not high quality,” he confessed.
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