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How I lost Rs 35 lakh in the stock market
Published on Wed, Oct 08, 2008 at 11:56 in Business section
Tags: Stock Markets, Earnings
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Wealth spoke to a man who grew up wanting to become rich, but lost all that he had earned in a flash.
Name: Omprakash Chaudhary (name withheld on request)
Age: 73
Where I live: Mumbai
What I do: I used to work in a steel company. Now, retired and resting.
It's been eight years since Chaudhary lost Rs 35 lakh at the stock market, but he is still recovering from the loss. "The only thing that's churning in my mind is, I need to recover the money somehow, and pay back all creditors," he says.
Chaudhary had no idea how the markets work. But his younger brother Narayan made good money. So why not him?
The first investment
In 1996, when Chaudhary was 62 years old, he made his first investment of Rs 40,000. He invested in Wipro, Infosys, Associated Cement Companies (ACC) and Gas Authority of India Ltd (GAIL).
"This was my strategy – buy shares in the morning and as the price shot up, sell it the same day before the clock strikes 3.30 pm,” he says.
His highest one day profit was Rs 30,000. This obviously encouraged him to invest more. It worked well for him. His younger brother, on the other hand, had invested for long term. He hardly did any day to day trading.
The crash
"In 1999-2000, the IT sector went bust and I made huge losses. I would buy shares blindly and sell them in the evening. This habit was a big mistake. I was suffering a loss every day. Worse, I would sell it off before the markets closed."
Bogus companies
"My younger son would hear the buzz in the market. Little did he know that bogus companies called 'Ahmedabadi companies' were doing the rounds. It seems the promoters were from Ahmedabad and they knew the drawbacks of the stock market."
"We would buy their shares when the rates had already increased. Then suddenly, these companies would shut down and take off with all the stocks from the market," he shares. Chaudhary had already lost Rs 10 lakh.
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