You must have heard the story of Rakesh Jhunjhunwala making crores of rupees from his purchase of the Titan stock years back. I have heard. Tom has heard. Dick, Harry everyone has heard of it. And that gives you goosebumps. You start losing your sleep in excitement as you plan to purchase penny stocks and dream of becoming a millionaire or even a billionaire soon. And you start pouring in your hard earned money in stocks available at peanuts’ prices. And very soon you see that the magic is not quite working for you. The ten thousand bucks you had invested with the dream of getting back one crore rupees in no time like Mr.Jhunjhunwala have shrunk to below one thousand. You get panicked. Then one of your advisors suggest you to invest more as the stock has now become even cheaper and you can reduce the average price of your purchase. The stock sinks further. And you are doomed. Soon you leave the market. You become depressed. You blame the stock market as a hub of scandals. And a good sum of your hard earned money is gone. So Rule No. one- never ever pay heed to any such stories of turning three rupees to crores. At that time the value of three rupees was nearly one hundred rupees in today’s market prices. And Mr.Jhunjhunwala did not invest in Titan out of the blue. He had a clear understanding of the basics of the stock. If you are waiting for miracles to happen in your life by investing in penny stocks now, you are living in a fool’s paradise. Miracles happen in the market only to bring you to the gutter. Not to land you on the Moon. So do not hear stories of success in the market. Rather listen to the stories of the big time failures in the market. That will give you some ideas of how did the losses occur. Stock market is not a hub of fairy tales as very often portrayed intentionally by the so called pundits in the market. Most of them are semi-literates who have barely any ideas to sell apart from selling their own foolishness. Do not ever buy any stock without having a clear understanding of the fundamentals of a stock. Stories do not pay returns in the stock market, wisdom does. So the next time you hear anyone advising you to invest in any particular stock, get your basics right. He must have a particular interest in telling you the story. Either he is drowned in debt in that stock and he wants other losers to invest in that stock so that there is a momentary jump in the stock and he can get out of his own trap or he simply wants to see your savings dwindling. Remember- in the stock market, the only motivation works is the idea of not being motivated. There is no ishq in risk. Ishq couples better with wisdom only.

Do not forget to read this

Why do the stock prices keep changing? (Stock Market Basics- Chapter 2)

Also, this is a must-read

Scam 1992- India’s Finest Web Series Till Date