NEW DELHI: Large capital alone cannot create wealth for you in the stock market, unless you understand the mechanics of the market.

This piece of advice comes from renowned value investor Vijay Kedia. “You need to know the nitty-gritty of the market to make money on Dalal Street.

Even if you are backed by money, there is no guarantee you are going to make money.

You can lose it all,” the veteran investor told ETNOW on Dhanteras, India’s traditional gold-buying festival. He said this is what happened to many stock investors during the market crash through September and October.

“It also requires courage to create big wealth.

Unless you have the appetite to take risk, you cannot create wealth in this business,” he said. Kedia also advised against stock investment based on news triggers, something he himself did with the first stock he bought. He made his first investment in Punjab Tractors in 1990, by putting in his 10-years’ savings of Rs 35,000 in the stock, based on a news trigger that the tractor industry was turning around.

There were only four listed tractor companies back then. “It was a fluke, but it worked and fetched 4-5 times returns,” Kedia recalls.

With those gains, he got hooked to stock investing.

After Punjab Tractors, Kedia invested in ACC, which he says was my first 'moon shot'.

Kedia developed a liking for stock investment at the age of 14 when he was in Kolkata.

He used to visit the stock exchange in the city with his grandfather on Diwali and other festivals.

He was so fond of stocks that he used to do mock trading as a young kid.

It was only when he turned 30 that he could visit Dalal Street for the first time.

Ever since, there has been no looking back.

“But it all happened after a long struggle,” Kedia said. The ace investor said quality of the management is the first thing he looks for in a company.

“It is the only thing that can really help you make wealth in stocks.

You have seen the crises companies like Manpasand and PCJ.

There is a long list of companies which once were considered good but later went burst,” he said.