Subra, which share to buy Now?

When will people stop asking me this question please?

I have in my life looked at about 100 odd companies (as an investor), and must be holding about 30 shares. Some of these shares in my father’s portfolio are 60 years old (yes you read it right), there are many shares held for the past 40 odd years, and of course some younger ones that are 20 years old. Of course there are some newer buys like Bharti Airtel which are now core, and are not 20 years old in my portfolio. Then there are some experiments which may have gone partially right like Kerala Ayurveda, Deccan Gold, Speciality Restaurants – which are in the black, but cannot decide whether they can be permanently in the core.

So when somebody asks me ‘which share to buy’ – I ask them what do you already have…and the answer goes like this – say ‘I have 200 shares of Kajaria Ceramics which I bought for Rs. 20′ – now it is quoting at Rs. 74’.

So why do you not BUY MORE OF THE SAME share? what if the best share is already there in your portfolio? If you hear that ‘good financial companies will do well’ is it necessary to buy LnT finance? (just giving an example). You may not need to if you have say Hdfc, Hdfc bank, Cholamandalam. You wish to buy more NBFC / BANK? why not MORE of the same shares?

I have added Essel Propack from Rs. 17 to Rs. 80 and then sold off everything at Rs. 92. This was in the earlier ride, this ride I completely missed. So I have Tata Global (I had it even when it was called Tata Tea!!), Tata Coffee, Tata Investments – shares which I have bought so many times and sold so many times that I have NO CLUE about its average cost. I find it easier to buy and sell a share that I already have (positional trade) – which allows you to buy at lower prices and sell at higher prices.

Having bought shares like Cholamandalam at much much lower prices today I am in a position to sell it, if it spikes.

Why can’t people buy MORE of a share that they have in their portfolio beats me. Especially if they have taken the trouble to build a good portfolio. This creates a habit of selling shares – just buying does not make you cash, does it? Even shares like Asian Paints, Nestle, etc. have given me a chance to sell at higher prices and buy back at lower prices. Of course that is a double edged sword – if I had sold Cholamandalam at 350, 380 and 385, I may not have the heart to sell more at 400 – simply because I have not had the chance to cover the shares already sold.

What does one do in such cases? Wait for the market to come down. In my case I have say 10,000 shares of a company I sell NOT MORE THAN 500 (5%) in one lot. So I would have sold about 1500 – which means I still enjoy the rise on 85% of the stock. Not bad, eh? and in most of the cases, the market does oblige 🙂

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  1. Easier to buy-sell a share you already have — very true! I find it more comfortable than running after each and every company listed on the exchange!

  2. I am not sentimental about any share. I sold Cipla recently after a long hold. I went to zero in Hero Honda (Hero Motors) when Honda pulled out. I shifted from Infy to TCS bcoz TCS was now available earlier it was not.

    I do not track more than 30 companies – and almost all bluechip category. I had about 11000 Chola – i have recently sold 1500 at rising prices – but now will not sell because the current price is higher than the last price sold. I sold at 390 and cannot now buy it at 390….so will wait for it to come down so that I can buy. Simple.

  3. In day trdg. 95% lose, only 5% win. Dabble in few stocks and gud research thru moneycontrol.com site.

  4. Dear Mr.Subramanyam,

    Your experiment with Deccan Gold seems to be working quite well.
    The company has obtained a mining lease and the share price has also shown good appreciation.

    Kind Regards.

    Ashfaq

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