I borrowed from my broker, lost it all!

By Elda Christy

moneycontrol.com profiles a retail stock trader's biggest mistakes and learnings on the stock market.

Name: Sanjay Gupta*

Age: 23

Profession: Web designer

Location: Mumbai

Sanjay began working at the age of 20, whilst still studying in college. Besides work, he loves to read, listen to music...and invest in the stock market. He made his foray into the stock markets, in his college days, while his other classmates were still wondering how to crack exams. 

“I used to watch business channels and found it exciting. Some relatives and friends invested in stocks. I was kicked!" he says. However, while his uncles made a good profit, he lost Rs 40,000! 

What my friend recommended
When in college, Sanjay did a couple of freelance assignments for which he got paid anywhere between Rs 5,000 to Rs 20,000. Sans wasting a minute, he would buy stocks like Reliance, Wipro, Infosys, etc, with the money.

He had no clue whether they were good or bad. He just bought what was recommended by his friends and relatives! Worse still, he even believed in the ‘tip’ given to him by his broker to invest in a couple of other stocks. 
 

Quick bucks

Within the first three months, Sanjay booked a profit of Rs 15,000. Happy with this profit, he invested a little more money, this time round. He raised the amount from Rs 10,000 to Rs 15,000.

To rake in more money, Sanjay soon began intraday trading and got into margin trading (borrowing money from the broker to buy stocks). Within eight months he had invested Rs 40,000.

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