We are amazingly smart people and remember all that we did, right? No. Wrong.

Let us criticize the MI management for a minute.

They gave up Dinesh Kartik, Maxwell, Jhonson , but kept Harbhajan, zaheer khan

The question is what made them choose the latter and give up the former? Well I assume that a think tank consisting of Sachin Tendulkar, Ricky Ponting, Anil Kumble, John Wright, Jhonty Rhodes, would have used some data apart from just a gut feeling. Right? well, presumably yes, presumably not. I have no data to make a statement either way.

HOWEVER, THE world is watching their decision about the choice made AND the choice foregone.

Now assuming that you had a nice portfolio – and you were very happy with your results, should I congratulate you? Hmm yes sure if you have got what YOU want.

However if you do not maintain a Portfolio of a) shares not bought and b) portfolio as on a particular date c) shares sold so that the money could be used to buy some other share – clearly in different parts of your portfolio tracker, I will not be able to say anything.

For example Infosys may have done well – but like a friend who sold a few lakh Infosys shares to buy TCS shares – if you had done it, you would have been far better off.

Or like another Engineer friend who sold all his Tata Motors, Ashok Leyland, etc. holdings and invested in Eicher Motors and Bharat Forge shares – his returns are surely far superior. I am personally guilty of selling out of Eicher much earlier than what I should have.

I recently saw a portfolio which had done well over the past 30 years – on a CAGR basis. However if the portfolio were left UNTOUCHED over that period it would have done much much better! Why? the shares sold were ITC, Colgate, Asian Paints, GSK, Tata Motors, Bajaj Auto and Hdfc. Not that the person had bought bad shares, but these shares (sold partially) had done so well in the past few years, that the new buys just did not match up. The only exception being TCS.

So keep track of shares that you studied but could not decide, or shares that you bought too less (I have said in an earlier post I bought 200 Bharti Airtel at 80 and held it till it reached 1200), or shares sold of too early, or shares bought for a different cause ( I bought Apollo Hospital at Rs. 9 because it was a yield share, sold it off at Rs. 200 when it was no longer a yield share, then it is now at 1000), ONLY then you can see your biases.

Once you know you are biased (we all are)…you can make sure that you do not make MISTAKES because of the bias.

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  1. Guilty, guilty as charged… Bharti we had when they were making telephones and then the Sr. Mittal did a buyback….I’ve already cribbed about SKF, so that as well, and most recently the A’s of Gujarat.
    Back in 1999 what one could have bought but did not– difficult to decipher, but going ahead, oh yes.

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