https://youtu.be/2JAqTtYViZ4

Transcript 

Darshan Doshi (00:08)

Hi, welcome to DASAR. My name is Darshan and we have an awesome podcast with Devang Kabra today. We are going to talk about investing, about making money. Just a quick overview. Devang is someone who has turned from an entrepreneur to an investor. Through childhood, he's burnt a lot of his own money in trading, in investing, and then over the last two or three decades, he's gone on to learn and read and practice what he's been preaching by following and testing different ways of investing in order to make money. So in this podcast, we cover Futures and Options. What are Futures? What are Options? When does it make sense for a person to invest through these investment vehicles? We talk about the stock market. We talk about direct investing. We talk about mutual funds. How do you select out of the hundreds of various mutual funds out there? We talk about cryptocurrencies, and Devang, in his own style, in a very candid way, shares his own experience. And lastly, we talk about what are some of the key lessons and contradictions, and the myths that are there in the investment world. And so he tries to debunk a few of those myths for us. Take a look at this podcast. If you're interested, reach out to us. We will be happy to include your questions in the future podcast on personal finance, financial independence, and investing.

Devang Kabra (01:52)

To start off with, my first stock buy was way back in 1998 when I was in the 12th Standard and I bought a share called Sathavana Ispat for Rs12. I borrowed Rs 12,000 from my mum and I was sitting in the library in NM College in Bombay where I graduated from and there were a couple of people talking about Sathavana Ispat. So I went on the basis of that. I don't even know who told me, I don't even know what the discussions were. I mean, who was talking to whom? I just overheard. I went home, I told my mom, lend me Rs 12,000. My pocket money was Rs 500 per month that time. So I said lend me Rs 12,000. I will guarantee to return it with profit. So that was how I started from 1998-99 till today, I have done all kinds of things. So whatever I'm presenting you can be rest assured that I have done everything. Futures, Options, Leverage Trading, Commodities. So I have traded in the market, invested in the market when you could get a ten lakh rupee future lot for a 50,000 rupee market when the future started in 2006-07.

Devang Kabra (03:16)

So I've done long term, short term, midterm, whatever you call it. I've done all that. And I've blown up my account. I don't even have the count now. Maybe three or four times my own account I've blown up. And now by God's grace, with the help of the learnings which I have bought over the period of time I can call myself a very mature and a stable investor right now. In the course of this talk, I will tell you a few things which are completely contradictory to what you might have heard about. First thing, which is a contradictory thing is you get more ROI with lesser risk in delivery base rates compared to futures or leverage futures options. This is completely contradictory to whatever people, the big brokerage houses like Zerodha would tell you, or all the trainers which are around the market will tell you, everyone will tell you, okay, because you get the leverage, you will earn more. But the fact is, because you have the leverage, you will also risk more, right? In simple terms, futures trade is nothing but it is leveraging all your trades. Suppose you've got two lakh rupees in your bank.

Devang Kabra (04:36)

You buy a contract, futures contract worth six lakh rupees, keeping that two lakh rupees as a margin. That is what future trading is all about. It is trading on leverage. In delivery trading, it's very simple. You've got a crore. You can buy only one crore rupees worth of shares. In options and futures if you have a crore worth of shares or cash, whatever it is, you can go and buy three