Bluechips or ex bluechips?

Hypothetical conversation between a GOOD INVESTMENT adviser and a potential client….

Circa 2007 end:

Client: Mr. Adviser I have some shares in my portfolio can you please tell me whether I will make some money on them!

Ad: Sure client, tell me which are the shares that you are talking about please?

C: The shares are Tata Steel, Bharti Airtel, Reliance Industries, and Hindalco.

Ad: wow, you have picked up good shares and when did you pick them sir?

C: Oh sometime in April / May 2008 at the mentioned prices: Tata Steel (900), Hindalco (183), Bharti Airtel (468) and Reliance (1285).

Ad: Well these are blue chips and I just saw that all the big large cap funds have these shares on THEIR portfolios…so these are really good shares.

C: Sir do you think I will make money on these scrips?

Ad: Of course, YOU will surely make money on all these scrips. In fact I am sure that in 5 years time these shares will be quoting at a much higher price.

C: Sir FIVE years!! Most of the advisers I meet are telling me that these shares will double in 3 years. In fact one adviser told me that Reliance will reach 2000 in 4 months time!

Ad: Can you wait for 5 years or are you impatient?

C: Sir that is not a problem, I can wait for a long time….should I buy more of the same?

Ad: No. Not really but however if prices come down by say 20% you should add another 1000 shares of the same….

NOW, 5 YEARS LATER IN 2013:

C: Mr Adviser can we set up a meeting?

Ad: Sure….do you want to invest more?

C: NO. ……just want to discuss my portfolio with you please…

 

lol…………lol……………

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3 Responses to “Bluechips or ex bluechips?”

  1. Surprised that Hindalco, Tata Steel (albeit great names!) were picked up without understanding the cyclical nature of metal stocks. So the GOOD ADVISOR should have informed the client about the caveats of investing in such stocks.

  2. Sir, are these really ex blue chips or stocks that are just in the down business cycle?

  3. Dow 11000 in 2001
    DOW 11000 in 2011

    Blue chip or no Blue chip…

    Probably inflation adjusted DOW should be 14000

    May be FD was better even though negative when adjusted…

    LOL

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