Calendar 2018 taught some hard lessons to retail investors, especially those who blindly ape established names on Dalal Street, as even the biggies like Rakesh Jhunjhunwala, Dolly Khanna, Anil Kumar Goel and Porinju Veliyath faced the heat in the prolonged selloff.
Take this: As many as 10 of Jhunjhunwalas portfolio stocks plunged over 50 per cent in 2018 till December 17. Among the top wealth destroyers, The Mandhana Retail tanked 76 per cent, followed by Geojit Financial Services (down 65 per cent), Dewan Housing Finance (down 63 per cent), Prozone Intu Properties (down 60 per cent) and Prakash Industries (down 58 per cent).
Some of his other favourites like Orient Cement, Anant Raj, Aptech, Bilcare, Man Infra Construction, TV18 Broadcast and Ion Exchange (India) have declined between 40 per cent and 54 per cent for the year till date.
Shankar Sharma of First Global in an earlier interaction with ETMarkets.com said one should never ape others in the stock market. “You should read a lot. This will help you develop your own style. You can take some elements from others, but ultimately you have to find your own style in investing,” he said.
Kochi-based investor Porinju Veliyath also took a massive hit on his portfolio, comprising largely smallcaps and midcaps. Sebi data showed the Kochi-based investors PMS took a 20 per cent knock in September, 3.6 per cent in October and another 2 per cent in November. The fund had gained 6.33 per cent and 3.70 per cent in August and July, respectively.
Some of his portfolio stocks plunged drastically in the selloff September-November. Stocks owned by his wealth management firm Equity Intelligence, like LEEL Electricals, Liberty Shoes, Shalimar Paints, Ansal Buildwell, Eastern Treads, Kerala Ayurveda and BCL Industries slipped between 35 per cent and 81 per cent in 2018.
Often called the smallcap czar, Porinju in a letter his investors advised investors to keep faith in the India growth story and stay put on their investments.
In one of his recent letters, Porinju said there is nothing to do in this market for investors who have put in money with a longer horizon. “This, too, shall pass,” he wrote, adding: “The prevailing bearish trend will reverse and turn into a 2009 kind of bull run. Hundreds of stocks, including many of those we are holding, would be up more than 100 per cent by next year.
Most of the shares held by Chennai-based investor Dolly Khanna also too moved southward during the year. Srikalahasthi Pipes, Rain Industries and Butterfly Gandhimathi Appliances dipped over 50 per cent during the year. Khannas other stocks such as RSWM, IFB Agro, Mannappuram Finance, Nilkamal, Nocil and Ruchira Papers slipped between 7 per cent and 32 per cent.
With over 1 per cent holding in more than 30 companies, Anil Kumar Goel saw his portfolio value fall up to 73 per cent during the year. Over 10 of his holdings dipped over 50 per cent. Samtex Fashions, Sarla Performance, Indsil Hydro Power and Manganese, Vardhman Holdings, KG Denim, Srikalahasthi Pipes, KRBL, Dwarikesh Sugar Industries, Shivam Autotech and Thirumalai Chemicals dipped between 50 per cent and 75 per cent.
Among his other holding, Ador Fontech, Sterling Tools, Mazda, Majestic Auto, Star Paper Mills, Swelect Energy, Majestic Auto and JBM Auto have dragged his portfolio since January.
Two of his holdings, Punjab Alkalies and Chemicals and Technocraft Industries, however, rallied 129 per cent and 7 per cent, respectively, during the same period.
The BSE Midcap and Smallcap indices retreated 15 per cent and 25 per cent, respectively, between January 1 and December 17, while the benchmark Sensex gained 7 per cent.
Jhunjhunwa last week said volatility is here to stay in the market. “Worldwide, volatility has ruled the roost and nervousness and uncertainty have triggered it in the market,” he said.
The Big Bull said excitement about midcaps has mellowed down quite a bit. “Midcaps cant trade at the valuation of largecaps,” he said.
He said 98 per cent of money in Indian stock market is being made by being bulls. However, he admitted he himself has not always made money by being bullish.