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basant
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Quote basant Replybullet Topic: Why not to look for new ideas – always?
    Posted: 18/Apr/2011 at 10:34am

One of the typical attributes of a young, impatient and a restless investor is to desperately look at new investing ideas when the existing ones look as promising as the rest. So the moment you meet someone the first question that comes to you is “Aur Naya Kya liya” (What did you buy new?). Isn’t that strange? Why do people want new things in life – always? So many families could have lived happily had people not looked for the new? Likewise so many investors could have stayed and become wealthy had they not tried identifying the new. Spare a thought for the guy who having bought Wipro in 1980 looked to exchange his stock for something new in 1981. A Rs 10,000 investment in the company would have grown to over Rs 350 crores had he just stayed with the old.

So does it mean that investors should do nothing and just sit back after an idea has been identified? Certainly not, all ideas need introspection and a constant monitoring vis-avis the new ones that come in every day. The only cost of investing is opportunity cost. So if Company A is doing well and someone whispers to you about the prospects of Company B then try comparing Company B with Company A before committing your money. If A is still better then B then buy A until you hi the 15% open offer limit!

Peter lynch says that the best stock to buy could be the one you already own.

Suppose you were running a restaurant, or a casino or a hotel, would you have looked at putting more money buying a new business each time your existing business threw back cash or would you have tried to consolidate your position in the business that provided maximum return for capital? Money has no emotion, given a free run it would flow to the spot that provides it maximum return but the emotions of the person in whose pocket the money resides allows it to do foolish things in the garb of looking at something new.

Many people look to buying something new to avoid the pitfalls of putting all eggs in one basket but one should remember that as long as the basket is strong and capable of holding the weight there is no harm in putting several eggs in one basket and if the basket is weak then even one egg can break the same. The idea is look for strong baskets not necessarily new ones.

There could be months where a smart astute and serious investor would not get new investing ideas in that case it would be prudent to analyse the existing stocks in the portfolio rather then hold cash and wait for new ideas. If a stock that he holds does not qualify as a buy then he has no business holding it in the first place.



Edited by basant - 18/Apr/2011 at 10:35am
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catchsudipto
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Quote catchsudipto Replybullet Posted: 18/Apr/2011 at 10:43am
Good One Basant Ji. 
Make your Life as simple as possible.
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ash7979
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Quote ash7979 Replybullet Posted: 18/Apr/2011 at 10:50am
Golden words..."Peter lynch says that the best stock to buy could be the one you already own"....So True...

I always think HDFC bank is so boring & I should switch to some new stock in banking...but see the best banking stock is which I am already have:)
Fear can hold you prisoner. Hope can set you free....
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bhowman
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Quote bhowman Replybullet Posted: 18/Apr/2011 at 11:24am
The best stock to buy could be the one you already own.
We should internalise this nugget of wisdom-say it aloud hundreds of times,so it becomes part of our being.
Thank you Basant Ji.
 
Adi Shankara says-Dura dure anthithe cha.-meaning That which is so far is actually so near.He refers to the Atman.
For us,the pot of gold which we look for at the end of the rainbow,may already be there in our demat account
 
That which is so far is actually so near.
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bsk0404
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Quote bsk0404 Replybullet Posted: 18/Apr/2011 at 11:24am

Excellent one Basantji.

There are only 2 tragedies in market 1st buying a good stock at wrong price 2n buying wrong stock at any price.
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somu0915
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Quote somu0915 Replybullet Posted: 18/Apr/2011 at 11:25am
Basantji -
Words of wisdom. Pearls of wisdom.
Investing looks simple but is not easy.
To hold on to current stocks for 10-20yrs is not a joke.
That is why people try to switch every 1-2 yrs.

The wait in capital markets is very very long to give you stellar returns.
How many people have that patience and conviction is what matters.
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Quote RSS4245 Replybullet Posted: 18/Apr/2011 at 11:41am

Basant ji tusi GR8 ho!! Clap

FUNDOOSEARCH
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nagpal
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Quote nagpal Replybullet Posted: 18/Apr/2011 at 11:54am
Amazing..I think you are 100% correct
Be a Owner,Not a Loaner
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