Ha there could not have been a more misleading title..but it was perhaps the best way to attract you!

‘Subra Sir, How is Tata Steel ?’

My take:

“Darling I do not know whether you :

Want to be a vendor to Tata Steel?

Want to takeover Tata Steel?

Want to be a customer of Tata Steel?

Want to marry a guy from Tata Steel?

Give your house on lease to them?

Take up a job offer, do some consultancy………………….et al..

You get the draft, right?

Recommending a share or any instrument is not so easy. It is like calling up a doctor and saying ‘this new Diabetes medicine has been introduced…should I take it?’ .

If I am a doctor I am going to say ‘Hey listen,

1. who are you?

2. when did you last check your BS? (Blood sugar, not bull shit)

3. what changes in your diet have you made? etc. etc. then I might consider answering the question.

Now in my portfolio let me pick up a few shares – Reliance, Tata Motors DVR, Bharti Hdfc, Hdfc bank, Airtel, Coromandel International. These shares have been offering a great price volatility – and allows me to do what is called a ‘Delivery based Trading’.

Let us take the case of Reliance…let us say I have 3000 shares in my portfolio. I have no issues buying say 500 more shares at 770 or thereabouts and selling it 875 and above.

This could even mean a boring 5 transactions of 100 shares each …on the way up and sell them at various prices.

What happens if I have bought say 200 at 770 and it goes to 740 – well I have capacity to buy another 300, right?!!

Yes. So if you create a nice ‘dividend yield portfolio’ – you can play on the excess shares without worrying too much about the downside or the upside. I get to play such a game at least 12-15 times a year in scrips like Reliance and Bharti. Both are good investments at say Rs. 770, and Bharti at Rs. 270 – and I do not mind holding them for long. How long? as long as it takes to double. If it doubles in 5 years, I get a return of 14% and if it doubles in 6 years, I get a return of 12%. Add the dividend to it, and the return goes up by say 1%.

Please also remember that my answer will be very different depending on whether you have 100 shares, 10k shares or you have 78k shares. For a person having Rs. 70L in a home loan, Rs. 5.4 crores in Esop of his PAST EMPLOYER, Rs. 4 crore in other assets, my answer will be very different than a guy wanting to buy 100 shared of Hdfc bank….:-)

Seriously, I am more than happy with returns of 12-13% p.a. The market rewards me much more is surely my luck and patience.

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  1. Hi Sir, I read your post daily. I am some doubt, Suppose you have bought RIL share on 1st March 2012(at 900). Now it is considered long term for Tax calculation. Suppose you buy 200 shares in Dec 2013 which and sell it today making profit of Rs 70. How tax will be calculated?

    Do you trade on long term share using same DPID?

    Regards
    Keshav

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