If you had asked me a question in 2008 or 9 – which was a better strategy – buy and hold or trading – I would have said buy and hold. In 2014 I am not so sure.
In the year 2012 and 13 I have done lot more trading than I would ever have done earlier. And the shares in which I have done trading include blue chips (?) like Tata Steel, Reliance, Bharti Airtel, Tata Power, and Hindalco. The IRR on these have improved only because of the trading. It hardly matters that some of these shares have been in the house portfolio for upwards of 5 decades.
Apart from these I have also done tremendous amount of trading in Coromandel fertilisers, Cholamandalam, Eid Parry, Kajaria Ceramics, Essel Packaging, Timken, Shanti Gears, Sona steering, .. …so much so that I could much more than recover my worst trade since 2012 – Hindustan Oil Exploration.
Most of these shares gave so many chances for volatile movements that one could go long or short without any anxiety or regrets. Take for example Cholamandalam – Rs. 265 and Rs. 235 have been awesome swings. Coro, Timken all of them gave such an ample swing – all that it required was a smart kid sitting at the terminal. I have no clue whether I could have done so well if I were trading online. I just do not have enough data to see on the online screen of a retail broker. I prefer the trading terminal for data, and a smart kid sitting at the screen. Oops that works for me better, not the ‘net’ .
So go there build a portfolio, but be ready to sell off your ‘best buys’ if there is a price spike like these shares have given….
Strategy keeps changing along with the market swings….but please remember in terms of value only about 20% or 30% of my portfolio goes into the swing trade game. It has paid off very very well in the past 2 years….
DISCLAIMER: These are acts of a professional who has been in the field for over 4 decades, helped by a brokerage house which has been in this business for 10 decades plus. Because it is a non leveraged, delivery based trading, the losses are limited to a fall in the market. THAT IS A RISK I know to handle. Be careful if you want to do it. These trades will of course be great for your broker, make sure it makes MONEY for you 🙂
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