When the corona pandemic struck the world in 2020, the stock market was no exception. Nifty witnessed one of the quickest falls in history, where it fell by almost 40% in 40 days. From February’s high of 12,246, it smashed down to a low of 7,511 on 24th March 2020. The market’s sentiments had turned extraordinarily negative, and the investors were in a shock. A lot of wealth was destroyed.
However, one investor had the courage to build his long-term portfolio when the market was falling. Afzal Lokhandwala is primarily a full-time trader and a passive investor. He even shared his list of stocks that he was buying on his Telegram channel, which included Indiamart Intermesh, Bajaj Finance, Info Edge and a few others. He said, “One line from Warren Buffet kept on running in my head. He said, ‘Buy the fear and sell the greed’. I saw the fear of corona in the market. I just put aside the market sentiments and built my long-term portfolio of quality stocks during the market crash.”
Afzal has a deeper understanding of the market psychology, and he pinpointed the exact market bottom on 23rd March when he tweeted the following through his handle (@afzal_57):
“Markets will fall till utter fear gets into everybody’s heads and nobody dares to invest more. Once it’s done, a rally will come, so strong and we’ll say, “Oh missed it” #psychology #marketcrash“
Afzal is a non-practising Chartered Accountant. He draws a clear line between trading and investing. During the market crash, he was bearish as a trader and bullish as an investor. He says, “Mostly, I do short term trading. However, when I get such once-in-a-lifetime opportunities, I invest for the long-term during that period. Most people start trading, and when their stocks have some losses, they become investors in those stocks. This is the problem. I am always very clear on all the aspects when put my money in any stock.”
Short term traders widely use technical analysis to make decisions in the market. Afzal studies short term price behaviour through price and volume reading. He focusses entirely on the charts to trade profitably. He says, “When I am buying something for a few days only, the balance sheet of the company is not relevant. I analyse the trend of the stock along with supply and demand characteristics, and all of this can be done using just the chart.”
In 2021, when the fear was high amidst the second wave of corona, Nifty went into a minor correction from February’s high of 15,431 for around 40 days, where it fell by 8.3%. Afzal again took to Twitter on 21st and 22nd April 2021 and tweeted the following:
Surprisingly, Nifty made another bottom at 14,151 on 22nd April and sharply moved ahead. Afzal has gained a massive following on Twitter and has trained many aspiring traders in the stock market. He believes that one needs to learn the correct approach to technical analysis, implement a risk management system and always have a stable mind to be a successful trader.