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basant
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   Posted: 22/Apr/2011 at 6:14pm |
His grandson will be a millionaire, but that does not defeat the logic at all.
This reminds me of someone quoting Buffet saying that someone who had bought just 1 share of coca cola at IPO and held on would be a millionare
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Yes, that is why one cannot bet big on a borrowed idea with borrowed conviction if someone flouts the rule he will have to pay up sooner or later.
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He gave a very smart reasoning that if he puts large quantity and it doubles, he would be tempted to sell, but in case of small quantities, he can buy and forget. Interesting isn't it?
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MR TED
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Posted: 22/Apr/2011 at 6:19pm |
Originally posted by basant
Yes, that is why one cannot bet big on a borrowed idea with borrowed conviction if someone flouts the rule he will have to pay up sooner or later.
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You always hit the nail on its head 
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rinkumalpani
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Posted: 23/Apr/2011 at 6:07pm |
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I like the strategy of a relative of mine who doesn know much about pe, eps and roe of a company and doesnt even care much..his strategy is simple....he buys stock, books half of the profit when and if the stock doubles, hold the rest for ur lifetime...when asked how does he chose stocks , he said he either buys something which is making new lifetime highs in a roaring market or buys when the market crashes heavily and then sells half at a price double of his buying price and holds the rest never to touch them again...and boy has he got some multi baggers..he still has asian paints and some other fmcg co.s(which strenghthens my belief in consumer plays)....but at the same time he has many other dead scrips.........and doesnt know what to do with them..by the way, he also has reliance power..
..Now, what i could infer of this strategy is-
1.) stocks which were bought at newer highs would be companies which were doing gud, so most of the times he would have a winner on his hand...booking profit in half and leaving the rest to grow might have accidently given him super duper multibaggers
2.)stocks bought when market crashed might have given him times to enter gud stocks at undervalued price..which again wud have given him a multibagger
..Now, if i follow the same strtegy , just modifyinng it to the extent that will have a look at some of the other parameters which i learned at TED, and placing fewer and concentrated bets..and then booking half of the profits whne the stock doubles and leaving the rest to grow..will that give me a decent chance of having a gud and growing portfolio...
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..ur coments friends
Edited by rinkumalpani - 23/Apr/2011 at 6:39pm
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subu76
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Posted: 23/Apr/2011 at 1:40am |
My comment is that your relative best move was about holding good companies for a long time. Any strategy which allows one to do the latter is good.....
A somewhat nice move (not as good as the one above) is buying on strength. Personally, I'm realizing that the problem with buying and selling is that getting in on a fast moving train is almost impossible...You require to be a real brave heart to buy a 30 PE stock even if you know it's profit will double Chances are that once you sell a good stock you're likely to move to an inferior issue esp in times like now when markets aren't exactly cheap For e.g. i've always been unable to buy more Prestige after my initial allocation even though i's always sure it has more potential.... It's much easier to buy a new stock as you do not experience price anchoring.
Edited by subu76 - 23/Apr/2011 at 2:57am
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basant
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Posted: 23/Apr/2011 at 9:29am |
Brilliant.
Originally posted by subu76
I'm realizing that the problem with buying and selling is that getting in on a fast moving train is almost impossible...You require to be a real brave heart to buy a 30 PE stock even if you know it's profit will double
Chances are that once you sell a good stock you're likely to move to an inferior issue esp in times like now when markets aren't exactly cheap
It's much easier to buy a new stock as you do not experience price anchoring.
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subu76
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Posted: 23/Apr/2011 at 10:50am |
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Hi Basant Sir, Have you ever bought a high PE stock? Any experiences you can share with us?
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basant
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Posted: 23/Apr/2011 at 11:05am |
Page at Rs 350 was a 15 PE stock on trailing earnings which was high considering other stocks at that time, But as I sold my cyclicals like Voltamp, BlueStar, Thermax etc I kept buying Page right till 600 so that was high PE. I will buy a 30 PE stock as long as I am convinced of the growth. Also Zydus was a 25 PE trailing stock when I added aggressively.
Titan was high PE always but relatively I have found it easier to hold a high PE stock then to buy one.
Most of my money has been made by buying low PE stocks and then waiting for the market to take notice and make it a high PE stock. Once it becomes high PE then I normally wait because I already have a position which because of my concentrated portfolio is dominant but there are a few companies that I would have bought even if the PE were high had I not have had a big position.
Remember money is lost because a company that we own stops growing at historic rates so in that case a 20 PE can beocme a 10 PE and a 30 PE can beocme a 15 PE. The trick is to identify the speed(growth) breakers which we sometimes succeed(TV18) and sometimes don't (Pantaloon).
Edited by basant - 23/Apr/2011 at 11:07am
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values
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Posted: 23/Apr/2011 at 11:48am |
Wonderfully written post. Precise and very informative. Your clarity of thoughts and ideas are very admirable.
Originally posted by basant
Page at Rs 350 was a 15 PE stock on trailing earnings which was high considering other stocks at that time, But as I sold my cyclicals like Voltamp, BlueStar, Thermax etc I kept buying Page right till 600 so that was high PE. I will buy a 30 PE stock as long as I am convinced of the growth. Also Zydus was a 25 PE trailing stock when I added aggressively.
Titan was high PE always but relatively I have found it easier to hold a high PE stock then to buy one.
Most of my money has been made by buying low PE stocks and then waiting for the market to take notice and make it a high PE stock. Once it becomes high PE then I normally wait because I already have a position which because of my concentrated portfolio is dominant but there are a few companies that I would have bought even if the PE were high had I not have had a big position.
Remember money is lost because a company that we own stops growing at historic rates so in that case a 20 PE can beocme a 10 PE and a 30 PE can beocme a 15 PE. The trick is to identify the speed(growth) breakers which we sometimes succeed(TV18) and sometimes don't (Pantaloon). |
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