When you end a relationship it causes some pain. Normally.

And when you end relationships which were 28 and 35 years old, the pain should be more, right? Well, not really. You need to look at the good times, happy times and say ‘three decades of relationship is enough’.

Ok let me break the suspense. Last year I got rid of Hero Motors (erstwhile Hero Honda), and this year got rid of Bajaj Auto. Real long term association, and a happy one at that. No regrets at all.

The portfolio has also seen a lot of churn in the MNC portfolio that I control – sold Gillette, Wheels India, Ricoh, …all new positions taken some fully closed and some partially closed.

Taken and closed independent positions in Hdfc, Carborundum Universal, EiD parry, – again clearly maintaining a difference between a trading portfolio and an investment portfolio. It helps me.

Is it always a win win situation? Let me explain. If I have say 12,000 shares of a company in my portfolio, as an Investment, I may trade in that scrip.

If I find it is still a good buy, I buy another 3000 shares (25% of the owner position) – and will be happy to trade in at a 20% upside. This upside could happen in 3 months or 6 months. By the time it is 6 months and nothing is happening I might sell it off. Simply because it is not giving me a trading opportunity – and this share is a poor trading habit.

Suppose the share was all bought at 700 and it goes up to Rs. 1000, I sell off without any regrets. However it the share goes to say 1200, I have no regrets – my 12000 shares are doing even better, right? so what if I do not have a trading position?

Similarly I had bought Reliance (trading position) at Rs. 700 and when it immediately went to Rs. 900 I sold out from 900 to 925. Then I watched it go to 1145. Not much regret, but felt that I could have waited it out. However waited it out…and recently bought it again at a price HIGHER THAN THE PREVIOUS sale price. This ¬†does not bother me. Buying RIL at 700 and selling at 900 was one transaction, now this is a new transaction. The fact that I had sold at 900 is irrelevant.

Such transaction teach you that like entry can be in stages, even exit can be in stages – like I did in Hero Honda. I exited partially in Monsanto Chemicals…and then fully exited it!!

As long as you get an IRR with which you are happy, do it.

 

I have an open position (at the time of writing) in Phoenix lamps – and in a few of the MNCs where one can expect a buy back soon (market rumors, do not believe them) types!

 

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