I apologise for the last post. was in bad tatste, but all i wanted to say was that we get new gurus ... I meant some one like Harshad Mehta, Ketan Parekh, Rakesh Jhunjhunwala, Ramesh damani. My intention was not to cast a remark on the gurus but to say that we can have a new guru who can be an advocate of partial profit booking

But dont you think we should not boil everything down to what gurus have said or done. We were discussing a logicand I dont think jyst because no Guru has prescribed it, this practice is not good.

This is a great discussion and great learning.

The conflict in thoughts seems to be based on the underlying philosophy.

Mr. Basant’s thoughts are very clear about holding a super concentrated portfolio (3 to 5 stocks) about which one tries to know everything (or try to know as much as possible).  Hold it for great multi-fold gains till fundamentals hold.

 

Philip Fisher advises the same- “if the work done in buying is right the time to sell is almost never” – he talks of only 3 three reasons for selling-

1. If one has made a mistake

2. if the fundamentals diminish

3. if there is a better alternative.  (which he warns against as one may not know the new company as well and may make a bad judgement)

 

Mr Fisher at one time held Motorola for over 50 years!!!!!!!!!!!!!!!

 

The effort, intensiveness and conviction required in this process – goes against “partial sell” as that goes against the underlying philosophy. It feels like trading versus investing. It smells of “losing conviction”.

 

It may even feel like selling a part of your family business. (If one has held and followed any company for many years- this is often a tormenting decision).

 

But the issues you bring up in this discussion is all about

1. Building an investment philosophy that works for you

2. Living that philosophy in your actual investments

As we know there is no single way in investments..one has to hack away till one finds one's own investment style that works. In other words there is no singularty of answer but more an exploration of style.

On the topic of “free shares”/”reducing cost of acquisition”/”partial exit”, here is a real life experience of one of my acquaintances, who is working as a supervisor in a engg company.

I just wanted to share with you all this experience.

Edited by kulman - 06/Apr/2008 at 3:18pm