Safal Niveshak’s Interview with Basant Maheshwari [TRANSCRIPT]

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Safal Niveshak’s Interview with Basant Maheshwari

Safal Niveshak: What are the key factors that shaped your life as an investor? What inspired you take up investing as a full-time activity?

Basant Maheshwari: My maternal uncle was into the investing field. He was actually a broker for the Calcutta Stock Exchange. So, as a kid, I used to go there and look at the Economic Times. I didn’t get a hang of it. I won’t say it inspired me, but it made me curious of the market, but I knew nothing.

So when I was in college, I had a couple of friends who were badly into stocks. It was the Harshad Mehta era. They would miss classes to look at the stock markets.

One of our friends used to tell me how a stock was selling at an EPS of Rs 20 and that it would get a P/E of 20 and the price will be Rs 400. So I was really attracted to his style. We wondered how this guy knew what price the stock would trade at. Why he was talking about the P/E of 20 was never our thing, because we didn’t know what the P/E meant.

Harshad Mehta was a great Pied Piper for the Indian community, because everybody got attracted to stocks in his era. So I had no objective as to why I was in the market at that time. The only thing was that I wanted to make money…and how much money, what to do with that money, there was no sense to it.

I just wanted to do something because it was making money for me. Thankfully, I was not into stocks to such an extent that I left my education. My focus was to make ten, twenty, thirty, and forty thousand. I made it and then I blew it all.

Next era was during the Ketan Parikh period. I was into stocks all this while. One of my friends was a stock broker. We used to look at The Economic Times by running our index fingers to the right of where the stock was. So we used to identify the lowest P/E stock selling at the lowest price.

So the lowest price with the lowest P/E was the most attractive investment at that time. That was how we used to do it. For example, if the P/E was 3 and the stock was trading at Rs 9, it was the best deal. If the P/E was 3 and the stock was trading at, say, Rs 200, it wasn’t as good as the stock that was trading at Rs 9.

I was into my family business, which was doing well then. I used to tell my father that I wanted to invest, but he was against it. He said stock market was gambling and that I would blow everything up.

So we struck a deal. He used to give me a salary every month. I used to take that money on the 1st of every month to put into the market, without any serious thought as to what I was doing. Portfolio creation and allocation were far-far away.

I just didn’t know what I was doing. If the stock was selling for Rs 50, I used to buy 500 shares. If the stock was selling at Rs 100, I used to buy 250 shares. If the stock was selling at Rs 500, I wouldn’t buy it. That was the theory.

Between 1994 to 1998, Infosys came right under my nose. We saw their good results, but there was always these thoughts like – “Who would buy Infosys Ltd (BOM:500209) (NSE:INFY) if you take away all their employees tomorrow?” or “It only has computers and chairs and what are those worth for?” or then “I can create an Infosys by hiring all those people.”

That was the only concept at that time, and it was thoroughly foolish. But that is how you start.

By 1998-1999, the tech fever had started, and stocks were surging. That time, I chased the second-liners. Zee TV was the darling of the market at that time. In 1999, there was this company called Shree Adhikari Brothers. They were starting a channel, after having done a lot of good programmes on Doordarshan.

See full Safal Niveshak’s Interview with Basant Maheshwari in PDF here  Safal-Niveshak-Interview-of-Basant-Maheshwari-Sept.-2014

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