Many people have asked me – do you trade? and the answer has always been – ‘kind of’.

I am convinced that you can build a kind of permanent portfolio – but you need to be thick skinned, and deaf to all the noise around you. I have been told by many well wishers that Hero Honda is fully priced, Colgate will now not perform in the future, Hdfc does not now have the pricing power of the old, …blah blah  blah ad nauseum.

However it did not matter to me.

In fact there are some people who bought some of the shares I recommended but sold off as they were itching for action. My portfolio is dull and boring, but happily beats the index – and that is because of poor index construction, not my superior managing skills. Also my portfolio may not be as well balanced as some fund schemes – but neither do I report to trustees. I was SELLING Ashok Leyland @ 62-63 – when a media company was urging people to buy. Sugar prices are down, but sugar company share prices are high – to me this is enough FOR me to sell. Mahindra Holiday Resorts at 544 looked overpriced and at 440 will look attractive to buy…

And since there are no trustees for whom I have to prepare 40 page notes on why and what, I guess life becomes a little easier. You can use your gut feel to do further research.

And ah! from 18k…till today I am sitting on about 25% cash+ the dividends will start coming in from June-July….so at 14k…can put it to use.

Am I saying the market will come to 14k, NO. I am just saying that buying, selling, fully selling out, moving from the auto industry to the auto ancillary industry,….are all NOT CONTRADICTORY at all. And one can do all this while keeping your portfolio PERMANENT.

Here is somebody with a similar thought process

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  1. Nice post subra, but leaders will change. GM is history. Will Tata Motors be there for tne next 30 years? Surely Tata Steel, Tata Motors, TCS, – why the whole Tata group – without a Tata at the helm will it survive? Will Gillette, Colgate, p&g remain listed? Such doubts keep arising. New leaders will emerge, so portfolios will have to be shuffled much more than what you said about 20,30, 40, 50 year portfolios. Your view?

  2. I think permanent holding (at least a long term view of 5-10 years) is better than constant (or occasional) juggling to take advantage of market movement. For this you need to have companies that stay in business for long. I had bought Reliance, Tata steel, Bajaj, Infosys, ONGC starting in year 2002. Many have gone way below my buying price as well as 4-5 times the buying price. But I have enjoyed their dividend and not worried about movement. When I actually sold some companies thinking that they are very high, I have noticed that they go much higher and then do not come down for me to buy them again. So, after some experiences like that, I have preferred to stay ‘faithful to the company’. Trust me, I have gained lot more by doing this than my colleagues who have resorted to some trading. Yes, you need to have very THICK skin for this. You have put it correctly.

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