How to Pick Good Stocks?

Zerodha Varsity
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This is a real story from when I was new to the market. I picked up multiple stocks, each priced below 10 or even 2, while I was still figuring out how the markets work. I followed a WhatsApp group that regularly gave calls and investment advice, but none of the members were properly certified or had a solid background. These were penny stocks, trading at very low prices on BSE.

I bought shares of several of these companies, thinking I could make a quick profit. However, most of the stocks started hitting lower circuits, leaving me unable to exit. That’s when I realized how risky/bad/terrible/dangerous/stupid of an idea it is to invest blindly without knowing anything about the company. It was a painful lesson in greed and FOMO, which resulted in a loss. :grimacing:

I’m sure many of us, have made the same mistake. Even @Karthik sir. :grinning:

He has an interesting story about investing blindly based on a suggestion. Why he bought that stock and ended up losing money. Spoiler alert: it had something to do with Salman Khan! :sweat_smile:

Do let us know if you’ve had a similar experience. :stuck_out_tongue:

8 Likes
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I bought JP Associates when it was part of the Nifty 50 at ₹110 but eventually sold it at ₹65. It’s a classic case of a company ruined by excessive debt. My initial premise for buying it was simply that it was a Nifty-listed company—a costly mistake in hindsight.

3 Likes
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Best investment is via ETFs. If someone is young and has time on his side, he/she should by small cap ETF. Someone in the middle of life cycle should invest in midcap ETF and someone past 60 should stick with Nifty Fifty or Nifty Next Fifty ETF. Over long term of say 10 years ETFs best mutual fund schemes in the same space 70 percent of the time.

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i always prefer Mutual fund

You can deploy any amount 100 Rs to 100 crore also - but in stock its really scare - difficult to keep long term is not sure to perform

Mutual fund is the perfect tool i loved - because we can keep for next 500 years also

No tension - my mutual fund portfolio worth is 80L -but i dont have a single stock