/How to trade and make $ 3025 in one day (#Smart Trading, # Boring Investments)
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How to trade and make $ 3025 in one day (#Smart Trading, # Boring Investments)

Are you looking to start your trading career, having a boss free life and follow your passion?

The answer is yes. Yes its possible, to follow your passion and to have a boss free life at the same time. After all what is better in life than following your passion and making a decent income in passive fashion. When I say passive, it doesn’t really mean passive as there has been entire set up, companies work when you are pulling trigger of buying or selling a particular stock, commodity or currency. Smart trading is a great way of building your new career where making money helps you to build superior wealth. At the same time boring investments have the power to get you in super rich category, why i call them boring is for the simple reason that they don’t give daily shot of Adrenaline rush. Practically i would not advocate daily trades because they have a lot of bearing on your personal life and can increase stress levels, with poor results.

In last 11 years, I have been making money through trading/Investing and helped thousands of investors to create wealth for themselves. Nowadays, the world of stock markets are filled with punters, bogus tippers, trapping chats and even brokerage houses or advisers who are not putting their own bets on a particular trade but advise others, giving an regulatory excuse that they can’t participate . Regulator just want an disclosure with fiduciary responsibility that nobody should misguide an investor.

So there could be various reasons you are wanting to start your career as an active trader or even Investor where you make money passively ( I generally call them boring investments ). While I wanted to help people in genuine way about doing those million making trades, I felt writing around success and failures of trades I did and reasons for, why I took those decisions. In the same spirit, I will start publishing income reports every month on trades executed to help you start your own Investing career.

Mind it since I spoke about passion, Investing and making people invest are not my only passion. I am done with 12 hours of Flying and looking forward to take a Private pilot Licence (shall write on this front too some time later).

Few reasons why I enjoy this career and could be common for you too if you are aspiring. They could be –

1.Money

2.To be able to live the life, always thought off.

3.To have a boss free life

4.To be able to spend quality time with friends and family.

5.Create social impact

6.To research, review and understand beautiful minds across globe and understand how they made it big.(I will share strategies adopted by them for sure separately)

7.To have the satisfying feeling of being promoter/owner and an Entrepreneur.

Mentioning all these things was important, but the most important thing about being your own boss calls for much more commitment, swift decision making and being a balanced person because now you can’t blame some of your colleague or management for wrong deeds of yours. Moreover, knowing your limits is the most important thing in the markets.

While moving ahead to take you through the Smart trade which I did, you must go through the complete guide that how you can get started.

How I made $3025 in a single trade

As I have mentioned that, when you operate individually and trying to experiment with lot of things simultaneously, being cautious and calm is most important thing while operating in markets.

Without taking much of time, the stock which I bought made this gain is YES Bank. yes you read it right, the most controversial and untouchable stock listed in Indian Stock market. You must be thinking that, everyone has got stuck and this stock has only given pain to each trader. investors have burnt their fingers as they are stuck from levels of Rs.400 and stock has recently touched low of Rs.29 per share. How money has been made in a stock which has lost more than 90% of its value.

FINIQI

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Buying Shares of YES Bank , has given nightmares to lots of traders and investors as their money got evaporated in few days the moment thy bought it. Even big institutional players had made losses with YES Bank downward spiral move. Controversial ouster of Ace Banker, Rana Kapoor, who started the first green field project in the Banking industry of India as YES Bank. He has been directed by RBI to leave the top position on severe issues of corporate governance, where management kept on hiding NPA’s and delayed reporting them on technical grounds.

Ongoing rift between the Kapoor and Kapur family for the board seat for last 9 years, was another issue that kept bank in controversy. The final nail in the coffin was an external issue, it was not only for yes bank. The moment IL&FS busted, entire NBFC universe started facing problem. One after the other they started falling, the likes of DHFL, India bulls Housing finance, Essel group, Altico capital were the names taken loan from yes bank. Listed ones started falling and got corrected upto 60 – 95% from their highs.

I added YES Bank in the price range Rs.29.40 to Rs.30.70, my plan was to add around 50000 shares of YES Bank, which unfortunately I could not take, because of sudden change in direction of prices. There was so much volatility in the stock of YES Bank on 1st of Oct’19, as it had fallen 35% in a day, which was the biggest fall in its history and it touched a low of Rs.29 per share.

I know for sure, people who don’t know me are definitely going to doubt the credentials of this trade that how come, I had bought this share with so much of confidence and at rock bottom price. below you can check the contract notes for the day. I could add 18300 Shares at rock bottom at an average price of Rs.30.40 per share, which I call a smart trade and now I am looking to convert this to an Boring Investment.

Meanwhile i must tell you one dialogue in recent movie SUPER 30, which i relate alot, and should be your attitude, if you intend doing smart trades, just see through it.

So its clear, that single day move on 3rd Oct, which was YES Banks biggest rally in a day made the valuation of my holding higher by $3025. But i have not booked out of this trade yet. So to be able to enter at rock bottom levels (Why I say so, i’ll explain my perspective), was my Smart trade, But now I look forward to Convert it into a Boring Investment.

All these boring investments calls for lot of structuring, with the help of underlying i.e; YES Bank, certain options strategy i plan to deploy to recover cost of purchase, then to recover interest cost, some dividend during this course and may be some more profit. I am not planning to exit these holdings until extraordinary circumstances arrive. I’ll keep apprising about the same through my future trades in this regard and my stint with YES Bank.

At times it gives me feel of a scientist, but then there are much more smart traders than me. Interacting with them helps me get better. But this is not my best trade, I will write separately on how to be OPTION MILLIONAIRE and my other high conviction trades.

What Made me to Commit to this trade

Like most of you must have got inspired by the likes of Charlie Munger, Jesse Livermore, William Delbert Gann, George Soros, Jim Rogers, Richard Dennis, Robert Kiyosaki, Rakesh Jhunjhunwala, Ramesh Dammani etc. I have read them all, and I liked everyone, even after all of them were very different in their trading or investing strategies. the only thing which i found common and needs to be adopted or learned from them is , all of them were very clear in their thought process, never fought with market and waited patiently for their moment to come, I mean the right prices.

Normally my investing rules are clear and they are,

  1. I do not commit easily – Here in case of yes bank, same was the case, Lender was surrounded by Issues of corporate governance, Which came to highlight since Rana Kapoor bought a 400 Crore land parcel from proceeds of YES bank shares around 3 years back, its around that time tussle with RBI started because he didn’t filed for it, with RBI for long. The other issues were hiding or not reporting NPA’s as found out in RBI’s audit at bank. these issues got resolved partially when he was removed forcefully because of RBI’s decision in early part of 2019. His successor, Ravneet Gill, has been a man with credence, and his endeavor to remove people from key positions, as all these bad loans were given collectively, was important. he already hinted about this around Apr’19 and in around 6 months changed almost all key people. All this happened around 1st Oct, when I bought.
  2. Follow markets – yes I do follow them closely, almost daily, to develop my understanding about companies, market and economy state. As depressed market scenarios give best opportunities to buy. I was aware that there was a threat on Pledged shares of Rana Kapoor in Yes bank, even after he was out from bank. He has obligations towards Franklin AMC and RNAM to be cleared. Because of stock price of YEs Bank got butchered due to possible default of DHFL, ESSEL and India bulls exposure. As they were facing severe tight liquidity scenario. Indact DHFL has actually defaulted. Since Bank in last qtr categorically mentioned that these exposures are suitably collateralised, there could be delay but recovery will happen for sure. This build my confidence but I was looking for best opportunity which came when RNAM forcefully sold Kapoors holding as they went below Rs.35. Infact, I was looking to buy around 35 levels. but luckily got it much more cheaper. Do not follow me blindly, do read has yes bank bottomed out? before you take any call.
  3. RBI to ensure no delinquency. placed one director from their team on Banks board, immediately after Kapoor’s ouster has been ensured. to address the corporate governance issues at Bank. That too was an confidence booster, since I belong to fraternity, I have fair idea how they regulate when they come to it.
  4. the most important thing which made me to commit is, even in the bad news environment bank was able to increase its CASA and TD base. had 125% capital adequacy, and no mayhem across depositors even after so much of bad news in media. This was really handled well by them. I traded quite similarly in satyam around 10 years ago and situation was quite similar.
  5. Gill’s Interview that bank is close to secure a deal with a tech giant, which could be possibly Microsoft, Google or amazon as he did hinted that it could be among the top 3 technology companies in world. Now this was music coming to ears, as this could really change the game for yes bank.
  6. Banks of the likes of Kotak must have been eyeing all these, with a close watch, as a potential acquisition as, Uday Kotak is looking to dilute his stake in Bank. this could have diluted his stake by increasing size of Kotak Bank rather than creating supply of his shares in market. Although this is totally my take on the scenario.
  7. last but not least, bank is having a base of 20000 employees and nearly crore plus customer franchisee, even after taking total hit on NBFC exposure, banks networth will be around Rs.60, which in current scenario is Rs.104 per share. So it was actually trading at an discount of 70% to the book value.

Above mentioned factors made it a buy for me, fortunately, as of now it looks like it has came at best time, and offers huge value. Although i’ll not shy away, that it gave me jitters too while buying them, but it was my experience which allowed me go ahead.

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Way Forward for this trade

I am keeping a close watch on happenings around the bank, the market is full of rumors, to not pay heed and fall prey to such things become real difficult thing. There fore the idea is to be in trade and possibly ride the tide with a stop loss.

I plan to keep generating interest cost plus some profit, till underlying is with me with the help of options and to protect the trade. I’ll keep writing and updating on those matter too to my readers.

So, now I am really looking forward for a strong PE investor coming in picture or a Tech Giant as the rumors are going or may a big business house buying stake, I strongly foresee this to be at least a 10 bagger in coming years. Also a feeling, that now 4th best bank is at work, to ensure my capital grows.

If you intend buying yes bank, I sincerely request do consult experts, do not buy on rumors, there could be long waiting period, where people loose out on patience and sell their holdings without making the optimal profit. People have already lost alot in Yes bank from 400 to 29.

Keep reading and share with your friends, family and colleague. Make lots of money, share experiences. lets create a wealthier community and create a strong social impact, And yes lets endeavor to make boss free life and follow our passion.

Anvesh is committed to make life simpler for investors being SEBI registered IA(Investment Advisor), CIEL(Centre for Investment Education & Learning) Certified Level 1, AMFI Certifed, Capital Market & Derivatives Market Certifed from NISM & pursuing Ph.D. in Cloud Funding. He has a stint of more then 11 years in banking and investment industry at key leadership positions and professionally engaged at Investocafe.com