I get a lot of mails saying – investing does not work, trading is fun, ‘i made Rs. 124,000 in trading’ etc. Frankly I do not know how to react. Let me share with you what has worked for my family’s portfolio.

Very broadly this portfolio has been a Value portfolio. There are shares acquired in the 1950s, 1960s, 1970s, …and so on. There are some shares where the dividend payout is about 100 times the original acquisition cost. This is clearly a value stock.

Then there are shares that I have sold at higher prices and bought back at lower prices – a little skill and lots of luck. Staying out of the market during bad times helped in many cases. Selling at the height of the Harshad boom was sheer luck of having to buy an office. If I did not have to buy an office in 1992, would not have sold a big part of MY portfolio.

In shares like Bharti, Tata Tele, Idea – most of the money came from trading. Recently I have bought Bharti – with a few years view. I have sold at high prices and not bought back shares like Tata Power, L&T, Tata Steel, – but this cash is sitting in some bank account and will go back into the higher beta stocks when the market goes up. GMR Infra, Karturi Global are on watch, and I think it will remain there. Am I willing to look at shares which fund managers do not touch. Ouch it hurts. I had (have am unable to sell) shares of H K Finechem, Moschip, Arvind Trading – almost clueless about what to do. Not too big, so not hurting, but surely making a loss.

When I bought Bharti at Rs. 80 it was not a value stock, it was a Growth stock. However at 1200 it was neither a value stock nor a growth stock – the growth was perhaps over :). However at 280 (maybe 2 months back?)it could be a value stock (but the answer will emerge in 2014, not in 2010). Similarly there will be a big hole in my parents portfolio when the law of 25% minimum listing is enforced – all the mnc stocks will go out – Colgate, P&G, Gillette, Basf, Ingersoll Rand, Areva T&D, Cummins, Oracle, ….

So in the portfolios that I manage am I a trader, value investor, looking for growth, looking for dividends? Well whatever I have done, it has worked. Not sure how useful this post is, because frankly I know it will not work for me for the next 30 years.

One because the past is not an indicator of the future and frankly at about age 60 it is better to move to some index fund and stop chasing alpha. At least that is what I hope I have the brain to do.

‘Nalla buddhi tha’ – God give me good brains is a very nice prayer 🙂

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  1. You can afford to be honest when there is no money involved :):). Whatever I write Google ads will appear and people will / will not click.

    On a serious note there is nothing to be honest/dishonest. There is nothing at stake…

  2. Not so BS. More correct in value than wrong that is all. If you do a search..you will see many investing / trading mistakes..there are atleast 4-5 articles about my mistakes..

  3. People who earn from Stock market in trading are mostly right because of instant gratification they need . they might loose on long term returns , for example investors who were with infosys and got out after 5 yrs would be the most happiest at the time of selling, but true value comes from holding for long, Not always but if done thoughtfully , can do wonders 🙂

    Who knows better than you subra 😉 you have stocks in your portfolio even before i took birth 🙂

    Manish

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