Investing या Trading ? Pranjal Kamra vs. Vivek Bajaj #stockmarket
The one who has left learning became irrelevant. And when you move on the way of learning. And in that way, you find many people who want to give you the right learnings in the right way. In our life when we come on this earth then we get our first teachings from our parents.
That doing this, it's right and this is wrong. Such a big teacher they are. And as we get into studies and engage more into society, more people join us. That gives us both, right and wrong learnings at the right time.
It is upon us now that we adapt this right learning and scan the wrong learning to remove it from us. Till now I have tried in my YouTube channel with you to give the right learnings to you. What I know that much I will tell you. I am doing how much honestly I can do And I hope you are liking my try. But I thought that I cannot move alone in the learning process Why not bring more guests that are teaching me in different aspects of life, not only about the market. And make me a good entrepreneur, a good human, and make a good market participant.
So friends I am starting VivTalks - a series on which we will talk with such people That impacted my learning journey and that I feel can provide you with useful information, learning, and a journey. In today's first video we will talk about a very important topic that is Investing v/s Trading You all know that how many people have come to the market and we all eventually want to make money from it. So now when we have to make money, then what is the way to choose? Because roads can be many. I promote trading alot. Because my journey is made from Trading. Although Investing is necessary is long-term wealth generation. But when I started you know how much trading was an important part of my life. But the second aspect Investing, the investor starting should take the route of Investing, we will talk about it. And our first guest, I love him for the work he is doing. Something which I am being inspired to do for a long period of time.My first guest is Pranjal Kamra.
Hello Pranjal. -Thank you so much, Thank you so much for inviting me. I have wanted to connect with you for a long time. So I got this chance and I'm very excited about this hard to hard conversation with you. It's my pleasure, before this video recording I had said to my team that my senior is coming so I'm feeling nervous. How will I interact with Pranjal live on social media? So if I do make any fault, then please forgive me. Sir my situation is the same, I am feeling nervous after a long time over the years. Making content from your videos learned around investing but have also learned to build products and scale. So to get a chance to talk to you means alot.
So sweet about you. Friends, there is a special talk between me and Pranjal that we both are a person having an entrepreneur mindset. To build things, scale them up, and create value around them. We know it. And Pranjal obviously has taken it to the next level. So we feel good. One thing that we both are doing good that providing the right knowledge to you. So keep supporting both of our work & stay connected with us. So Pranjal let's do something new today. We say "Let's do something brave." Let's assume you are an Investor And let me assume that I'm a good trader too. So let's fight a little on Investing v/s Trading.
That what should a newcomer do? Investing or Trading? So before that, if you tell me about the journey of yours I know about you but still How did you start? What did you start? And how is your investing journey that you are focusing upon, is going now? Sir, I have a complaint about you that we are first going to fight. So if we have to fight then I would have to come to Kolkata. There was some luck and somewhat I will say that what my grandmother has taught me from childhood. It was a mix of both due to which I came into investing. My grandmother was active in Make In India movements She had a belief, her economics said her that if you use products made in the country, if you use handmade soap then the country will get rich. And we became slaves because we used to use foreign goods.
This was her theory. So as a 4-5yrs old, she used to take me to shops and If I pick up any good, then she used to say this is foreign, not take this. As it is I don't believe in that theory but one benefit it made That since then I started studying and going to groceries store and seeing the back label of which company it is. And then ask dad or grandmother where that company is of. So by doing this till the time I was 15 year
I used to win every business quiz because I had company history, growth, brand, merger acquisition what is going on I had a big knowledge being a 15year old because I was studying back labels from 10years So it was a natural advantage of me to know the company history then I started learning law because I didn't know much I was a backbencher in school. In Fact, I completed 5 years of law in 6 years so the one who doesn't feel good in studies feel good is rest all. So I did the Anna Hazare movement, the anti-corruption movement. So I was finding what my true calling is. One day my dad was seeing a program on Zee Business - D Streets Don. Usually as a young student you don't get an interest in such programs but that anchor used to do in an interesting way - in a get up of Don.
And it was a collared program and used to answer the questions very aggressively. This share is not good, will get drowned and killed. Things like this. - I remember. -So as an 18-19year old that hooked me and now I know that when I go on TV's The questions that are going to come will come in emails from beforehand but then I uses to like about them that they get any phone, ask about any company from the list of 5000 and they know from where the company is, Who the promoter is. So it was not like I want to earn money. I used to think they are good for me in the business quizzes. They know about 5000 companies. I want to become like them. So it started from there. Dad gave me 20k rupees and he had gifted me a scooter - TVS Vigo at that time. So for the first time, I went from cycle to scooter. So I purchased that share only for the first time around 2013 and as luck says we talk in both Trading & Investing, the beginner's luck started and the share increased by 9 times. And I thought, I know everything, I know investing.
And now I will do this only. And dad was even caught, I had earned money so how could he deny it? But after that but after that whatever I company picked up it got bankrupt. I had taken Elder Pharma which got finished. I took another stock that became zero. Then I had realized that it cannot be like that. I will have to study in it. And dad had enrolled me in the company secretary role program because I was not passing in law so he thought to do something else.
Now I didn't go to give the company secretary exams, I used to go to play cricket. I used to same home that I cleared both the levels. And I couldn't clear the foundation any day even. One day, as luck happens, an email came from ICSI that they have tied up with an institute called NISM. So I saw what this NISM is! It is an institute/college on NISM by SEBI That teaches about the stock market. So I gave its interview and faculties of there said, this is the best interview they had ever taken. So for me, it was life-changing because for 5-6 years in law school I felt that there is no one foolish than me. So it changed my life.
My admission happened there. And on the first day of the library, I made a list, what are the most expensive books because it's a course of 1 year so I couldn't take benefit of them. So for a year I just studied there. In fact sir, the first day I went to the library and took out a book, and I felt guilty that What are you doing Pranjal? Have to study law. I remind myself that I have to study this only
Because before that it used to happen people are studying law, and I am secretly opening money control or reading any article I used to feel guilt that I'm failing in law and what am I doing? So conditioning was somewhat like that But that 1 year changed my life from there I got confidence that I can do investing and want to do something in this field. By the way sir, I want to know your journey even that how you started. Because you started before me. Hardly anyone used to see the market respectfully so how did you get the courage? I was blessed that there was a stock market culture in my family. My father has been part of the stock market since the early 1990s After his job, he had taken the membership of Calcutta Stock Exchange so there was almost an excitement & fear of the market in the house. Because the stock market was an occupation where it seemed like money will come into the house or not. What is dad doing?
There was stable earning in the job. Why leave and join the stock market? But then obviously my brothers got into it. So there was a culture at our house that we can understand the stock market but the Irony is that I belonged to the generation where Anybody's father used to say it's son/daughter to not come into the stock market. Then my father too was in the market But always said me to not come into the market. -Right. -I guess because he has seen Harshad Mehta and saw the Ketan Parekh scam. And a very huge crisis took place in Calcutta Stock Exchange. Thanks to Ketan. And due to that many people lost their money.
We all lost our money. All the members of the Calcutta Stock Exchange came into the bankruptcy stage in the early 2000s So my dad didn't want me to become a full-time marketer. So he told me to do CA, CS & MBA. And become a fund manager in Bombay and spend time nicely. But as we discussed I and Pranjal are different kinds of people. People of entrepreneur mindset. So nature had its calling and I came back to Calcutta and started with Commodities trading. Because I thought there was a trader inside me from before. Thanks to my father that because he used to trade so it was easier for me to understand trading. So I started with Commodities Trading & like everyone starts, there will be loss and don't know what is going.
Plus the problem that comes with qualified people is that there comes a brother in life called opportunity cost. So it always disturbs that what are you doing? You studied so much and did trading. So is it worth it? What was the requirement to study so much? Now the society accepts it but I am talking about 2006, so at that time the society was quite narrow-minded. So if you aren't doing anything then become a trader. And it was very difficult to get married also. So many proposals got rejected too. That what is the guy doing after studying? Trading?
Seriously? -Seriously. So my father-in-law was a sensible guy so decided to bet on me. And I guess he did the right thing. So it was natural for me. But as I was a business-minded person I was not into Trading on my own always. So I preferred to build a business. In Calcutta, we have 150 traders who have been with us for 10-15 years. Those are doing trading. So it has been a great experience. Your story is like 'The Boy Next Door.' That everyone aspires that if I do this then it's fine. My story is like that exclusive club that was in this from before. But they utilized it and took it to the next level. - And survived the 8-9 crash. I am surprised that you started in 2006 so you saw that crash.
Pranjal I actually made my 1 crore made in 2008 only because traders waits for the crash. He enjoys it because The money you make when the market goes down is so much and when the market goes up, the income of traders is in a very linear pattern. And when the market falls, and you are on the right side then you make a lot of money in the market. What are the merits and demerits of becoming an investor? And then I will say what are the merits and demerits of becoming a trader.
Let's start from the demerit. The demerit is there are times when you aren't making money for 2-3 years and at that time, it's like you bet on a thing and the market isn't recognizing the theme. Your controllable is what you feel is the right theme, company and its fundamentals to bet upon but when the market will recognize. It's not in your hand. So when you are sitting for 2-3years and around you, investors you as you will accept traders that it is a different art So you won't compete with them and there won't be a FOMO but when you see the rest investors bet on a different theme and they got instant recognition. So no matter how strong your study is, how you have assimilated it but the reality is you will doubt yourselves at that time
At that time you feel, am I sitting on my past laurels? Or am I not learning new things? Am I missing out on the new trends? Am I outdated? Imagine sir, as a 28-year old I get the feelings at times that am I outdated? So I understand what will happen when I'm 40-50 I can feel this much more often because naturally, I will not be that updated with the latest trends. So when everyone is earning around you, still trusting your beliefs, trusting your process is right and will or will not get results sometime but it's important to have faith in your process. This becomes difficult when everyone is earning money. Just to give you an example. After IPO, around after 3-4years, CDSL IPO came off around 350, and when it was around 200-250, I started buying around a month after IPO. And in the last 6 months, CDSL has gone up. Was sitting on it for 2.5-3years and feeling like a fool at times that what am I doing? No one is recognizing and it's not like a hidden gem. It's in front of everyone. People are using its products indirectly directly, if s value is not yet being recognized then there is no value in it
It's a value trap. Sometimes you get a doubt that. In the case of CDSL, I didn't feel because I was closely working with brokers as well so I could see that but I also know if there was some other company than CDSL in which I had a little subtle but then I might have doubted my process. So returns come in chunks and you as an investor you try to run your house and think for regular income, it will not come Nothing will happen for 2 years. So that is the biggest demerit. Merit is that you stay away from the daily noise. You don't care if there is a rate cut, what is happening in the US, in India, what is happening in macros. Day to day you don't need to track the chart. You don't have to chart monthly economic numbers, you don't need to track quarterly results. So very much noise that dilutes your decision-making, your thought process.
We can afford to stay away from that. In fact, in our office, it's a company that derives its bread and butter from the stock market but there is no TV in my office, no terminal. Monday to Friday in fact this is what I encourage to not see the share prices what we will see, we will see on Saturday. So that we don't act on it on impulse. So you get time to do other things. This is a passive side activity and you can follow different things. That is the biggest merit. You say, sir, the demerits/merits of trading.
What your demerit is, is our merit. -Right. -There is so much noise around, and we have you will have to stay connected with value every time. Subconsciously a price keeps running in your mind. In fact many times it happened that while sleeping I shouted that went, it falls down. And my wife used to wake me up and say what is this behavior. What is the behavior? -This is Interesting. -It happened many times.
She used to get tense. When I used to do active trading, in currency, commodity, and equity. So I was such an active trader from morning 9 till 11 at night My wife used to get frustrated with me, so this is not the life that I want. So demerit is that your life is so much around the market, prices, and short-term actions That may be your other life aspects start getting compromised. And it's not possible for everyone to balance the other aspects.
A very high level of emotional maturity is needed that not just in your personal life but in the other aspects too. Trading is just not life. And beyond that even we have a social life. We have our kids or we want to take hobbies like singing. And when you become a trader, all these aspects stop for a while which is a very big demerit for it. So after a point of time burnout, You might not have heard this word burnout in investment but traders generally burn out after a point of time. So in 2013 similar thing happen to me that I kind of got burnout and I was trying to figure out what do I have to do in life? I don't want to this morning 9 till night 12 trading. So in that process, I did a lot of things to rediscover myself.
Then I did what I am doing right now. So this is one of the demerits of trading. Merit is you can ake a lot of money in trading very fast. And when you have small capital, then the power of compounding works much better in Trading than Investing because you have a small base. Like I started trading with 10Lac rupees. Why? Because if an educated person is doing anything then will at least put 10Lac. Not start Trading with 1Lac. So if I have to make that 10Lac into 100crore or 10crore then to do investing, there will be very much time-consuming. Because its compounding impact takes alot of time. You can make small capital in trading into a reasonable size. And then after that, after a size, take out 25-30--35% from it and do invest.
But I wonder as you said that trading used to happen for 8-10years so did decision-making affect long hours that you are saying burnout! Did you feel that you are not making rational decisions as you are given so many hours? In trading, there was short-term decision-making. So mind was always prepared to take the decision of this much time. So if I am doing scalping then I know this decision is for 3-4minutes. If I am doing short-term swing trading, then it is for 2-3 days. So I never felt, but obvious negativity was there that when trade was wrong no one likes it then I used to feel why cut off trade, could keep it. But if you are in the process and get the opportunity to re-enter. Then old negative emotions anyways get diluted. -Right. And there is one more thing, that when we do trading we talk a lot to market. If you see any trading setup, I would love to host you my trading setup. when you will be in Calcutta next. You will see that traders talk to the terminal that little bit trade could be fixed.
Saying this offline to you that creative abuses are very much with traders because they get into the habit of abusing the market as well that what is this going on in the market. I would love to see it, I have never seen a trading setup to date. I would welcome you. Please you come. I did a live session on my YouTube channel on Diwali where I did a tour of my office people.
That is how traders think and work. It's a very fascinating and different world. A retail investor is coming and doing trading Which is like with 50,000 - 1lac you do trading, how much can you earn from it? But it's a good time pass. I get an intrinsic value of speculation so if it is going on but real professional trading that I push people towards multi-asset trading. It's a different game and if anybody sets in it then it's a good money-rewarding opportunity. Definitely when I will come, if you call me or not, I will directly reach you. -My pleasure it will be.
2021-11-22 17:50
