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basant
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   Posted: 24/Jan/2009 at 10:49am |
It isn't as blanket a call as diversification or concentration. If you had diuversified between Punj, GE Shipping, PRIL and Reliance you would have done terribily compared to holding a single stock as Titan!
This is as on date and tomorrow the story might turn but the focus point is to buy companies that do not have earnings disappointment or whose EPS will grow everythig else is a slave of corporate earnings and the there are various ways to explain how not to lose money but the simplest and the easiest one is to buy scalable growing profitable businesses.
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Vivek Sukhani
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Posted: 24/Jan/2009 at 11:59am |
Well, the topic is on selling on disappointment, so i was talking on how not to get disappointed.......
You are painting a scenario where you have all the suckers( although, I dont think GE has been anyway near to being a sucker like PRIL or Punj) and alternatively, you have concentrated in a stock which has been a winner.
What if I had diversified into HUL, castrol, Glaxo consumer, ITC and Wyeth and had concentrated on just Punj Lloyd or larsen????
the skill to make money is not only to buy companies with visible earnings or scaleable earnings, but to buy them very cheap. The necessary condition may be scaleable earnings, but the sufficient condition is to get them very very cheap.
People simply dont get a hang of both the variables at the same point of time. A dumb person like me is obssessed with the second variable whereas some smart people are just obssessed with the first variable.
However, its imperative to have the necessary courage. For without confidence, if you ever get in a hole, you will never be able to come out of it.
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Jai Guru!!!
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basant
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Posted: 25/Jan/2009 at 1:05pm |
Originally posted by Vivek Sukhani
Well, the topic is on selling on disappointment, so i was talking on how not to get disappointed.......
You are painting a scenario where you have all the suckers( although, I dont think GE has been anyway near to being a sucker like PRIL or Punj) and alternatively, you have concentrated in a stock which has been a winner.
What if I had diversified into HUL, castrol, Glaxo consumer, ITC and Wyeth and had concentrated on just Punj Lloyd or larsen????
the skill to make money is not only to buy companies with visible earnings or scaleable earnings, but to buy them very cheap. The necessary condition may be scaleable earnings, but the sufficient condition is to get them very very cheap.
People simply dont get a hang of both the variables at the same point of time. A dumb person like me is obssessed with the second variable whereas some smart people are just obssessed with the first variable.
However, its imperative to have the necessary courage. For without confidence, if you ever get in a hole, you will never be able to come out of it. |
1) WHern companies do not peform they disappont investors one cannot expect to smile when companies show less then expected growth in earnings.
2) There are several suckers some suck in price some in time. HUL has sucked investors for the past 8 years in time. It has UNDERPEFORMED the sensex people would have done far better in a FDR, given a chance to choose between a HUL in 2003 and a PRIL a smart investor like me  would have (has) gone for the latter.
3) It is always desirable to take a longer term view rather then take a 12 month view and paint the whole world with that brush. I know of no investor (except in hindsight) who exited growth companies in January 2008 and bought HUL. These are fairy tale stories and never happen in real life. If HUL has been the best performing stock for 2008 it has been the one of the worse performing stocks from 2000!
4) There is another great company called VST Industroies which has a great yield ratio but the stock price is down over the last 8 years. These are the ultimate suckers not the ones whichg give you a 120 bagger and take back 75% from the top!
5) WHy I have mentioned VST is because the biggest bear of 2008 owns a 10%+ stake in that company so even the smart money is doing dumb things.
6) I talked of Titan because I own it as part of my super concentrated portfolio and till date it has done well. I am not sure of what happens tomorrow - either side.
Edited by basant - 25/Jan/2009 at 1:09pm
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samirarora
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Posted: 25/Jan/2009 at 2:14pm |
I bought Henkel India about 3 years ago, had really great hopes for it, bought quite a bit too... so far, no performance at all.... i am thinking real hard regarding what to do with it now.. esp. since i bought for nearly thrice as much as it is available today.. and i have 87000 shares... the decision is turning out to be quite tough for me...
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Vivek Sukhani
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Posted: 25/Jan/2009 at 2:26pm |
Nobody is saying not to get disappointed.......but dont sell on disappointment.
By the way, any person who has made money here is a fairy tale fabled experience for a loser.
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Jai Guru!!!
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basant
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Posted: 25/Jan/2009 at 2:34pm |
Originally posted by Vivek Sukhani
Nobody is saying not to get disappointed.......but dont sell on disappointment.
By the way, any person who has made money here is a fairy tale fabled experience for a loser. |
yes, I agree. At one point I was looking at stocks like this will go up only 5 times let me look at a 10 bagger now the question is. How much can I protect myself before we go out to bat again.
Things have come a full circle. We do learn new things from the market don't we?
This grandmother of all bear markets have humbled the biggest bulls and that is how markets have to behave.
Edited by basant - 25/Jan/2009 at 2:35pm
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Vivek Sukhani
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Posted: 25/Jan/2009 at 2:48pm |
Actually stock picking is not that very important to make superior returns. Its asset allocation which holds the key.
I think we should behave more normally rather than like a disgusted hopeless person. I am perhaps one of the least experienced of all investors here, yet I have noy yet lost any bit of conviction in my stocks and for market in general. Infact of late, I am no longer asking my friends to 'convert their way through'. For me, its time to gather one's thoughts and start a bit-bit accumulation.
I believe we need to a bit forgetful now rather than keep losses in front of our mind. Its good to be cautious but caution doesnt get you returns. Not being enterprising, in the name of caution, is equally uncalled for, as is being enterprising just for the sake of it. The period of inaction is over now. Its time to pick up pen and paper and get going.
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Jai Guru!!!
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basant
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Posted: 25/Jan/2009 at 2:58pm |
It is all about stock picking for me. 90% of my money has been made in three stocks I was always 100 invested so asset allocation means little to me. ALl I want is downside protection before I look at the upsides I cannot wait and lose all the money chasing returns.
2009 or 2010 will provide several potential multibaggers I can see many of them every day but then there are several signals which one needs to identify before he can jump in.
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