Ep29: Jotak Nandwana – Sit Tight, Be Cool, Don’t Watch the Score

Jotak Nandwana is a keen follower of the Indian stock market and has been investing money since 2010. He uses the CAN SLIM style to screen for growth stocks. He has been working as an Equity Analyst for MarketSmith India, since its inception.

Jotak has been involved in extensive studies on biggest winners in the Indian market. He manages the MarketSmith India model portfolio along with other research for William O’Neil India.

Jotak holds a Bachelor’s degree in Business Management and a Master’s degree in Commerce from Sukhadia University. He has also completed all the three levels of the CFA program.

In this episode, Jotak shares his learnings when he focused on his investment scoreboard more closely rather than the purpose of merely monitoring his gains. Watching the scoreboard affected his investment behavior significantly that resulted in some bad investment decisions. He then realized that even good investments can turn sour, given a dose of uncontrolled events.

 

“Talking about your bad decisions will help you to improve as an investor.”

– Jotak Nandwana

 

Topics Covered:

00:48 – Andrew introduces Jotak Nandwana and shares that they follow the same method in investing

03:14 – Jotak shared why CAN SLIM Method is an effective style in investing

04:18 – Jotak narrates his investment with Bajaj Finserv and the lessons he learned

06:26 – The fixation with price and profit resulted in Jotak’s “huge” mistake.

08:43 – Andrew’s thoughts on capital gains tax

10:40 – Jotak reveals the mistakes he committed in the stock market and the learning experience he had

12:06 – Andrew give listeners advice about determining their investment horizon, and their goals must be to build their wealth in a long period

14:35 – Andrew throws light on the benefits of focusing on cutting your losses and letting your winners run

15:37 – Jotak added the importance of using Four Pillars rule in investing.

17:07 – Jotak gave a warning on looking at the scoreboard and its effects on your behavior and investing

 

Main Takeaways

Lesson 1: “Selling winners too quickly and holding on to losers are the eternal mistakes that are committed in the stock market.”– Jotak Nandwana

Lesson 2: “Even if you’re able to invest in the right companies, you won’t make much money if your behavior is not ideal. Behavior is often ignored, but it counts the most. If you want to be a successful investor.” – Jotak Nandwana

Lesson 3:  “Successful investors always take care of their biases because they have no place for emotions in their investing style.” – Jotak Nandwana

Lesson 4: “Don’t get too worked up if a stock goes up after you have sold it, instead carefully analyze the business and if it still ticks all the boxes in your checklist, there is no harm in buying a good stock at a higher price.”– Jotak Nandwana

Lesson 5: “Do a post-analysis on a yearly basis and look at all the stocks that you should have bought, stocks that you shouldn’t have bought, stocks that you should have sold earlier and stocks that you should not have sold and this will certainly help in improving your overall investment returns.”– Jotak Nandwana

Lesson 6: “Don’t get caught up in the short term gain concept. Think about the 60 years ahead, that you’re going to be managing your money and when you do that, all of a sudden the short term trades make less sense.” – Andrew Stotz

Lesson 7: “It’s better to preserve your capital, as I call it. Some people call it to stop loss.  I call it preserved capital point (or PC) because stop loss is so negative, right? ” – Andrew Stotz

Lesson 8: “Sit tight, be cool,  know the score, don’t watch the score.” –  Andrew Stotz

 

Resources:

 

People Mentioned:

 

Connect with Jotak Nandwana:

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About the author, Andrew

Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company that provides institutional and high net worth investors with ready-to-invest stock portfolios that aim to beat the benchmark through superior stock selection.

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