How this Isa millionaire beat Warren Buffett to earn a six-figure income for life (tax-free)

He makes a small loss on around half of his stocks, but the stop losses mean he sells out quickly when positions sour.

“I expect a stock to make money: if it starts losing value I conclude that I’ve got my analysis wrong,” he said.

By contrast he hangs on to his winners, and doesn’t have a set gain where he will automatically sell a stock.

His typical holding period is two to three years, and he usually finds himself selling when a stock has fallen slightly from its peak, rather than trying to exit at the top.

Any dividends received are reinvested, and the couple’s income is generated by selling holdings. 

Recognising a crisis

Aside from picking the right stocks, a major determining factor in Mr Bagria’s success has been his successful navigation of financial crises.

In 1999, at the height of the “technology bubble”, he made a return of 261pc between the start of the year and March.

He then sold out of the market ahead of the crash. Stocks he owned during this period included telecoms firm Amstrad, computer chip company ARM and biotech firm Cambridge Antibody Technology.

  He cites two factors that helped him time his sale with such accuracy. “In the Nineties, none of my friends were interested in stocks.

I gave a book to one friend who had it for three years and never read it. “Then, in 1999, my friend started reading that book,” he recalls.

“When the last person gets into the stock market, that tends to be the best time to get out.”

The second was a statement in March 1999 by US President Bill Clinton and prime minister Tony Blair, in which it was said that the human genome sequence should be made freely available to all researchers.

“I sold all the biotech stocks first thing in the morning, and shortly after that I sold my internet stocks too – and that was the start of the crash.” 

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