A lot of big investors are humble.

Do you know why this happens? Simply because they keep an investment diary. It is your investment diary and your real life kids who keep your ego in check.

If I go back and recollect why I bought certain shares, I feel it very funny. I am an incorrigible value seeker – and for me value HAS to come from cash compensation in the holding period. This normally means dividend, because my only asset class is equities. If my equities were to be taken away from me and my immediate family I would be devastated.

Let me tell you some of the mistakes and wrong calls.

1. Bought Cholamandalam at 65: Happy with the call timing (could have been far better, it was also available at 47). I thought it would be 5 bagger when I bought it a few years ago. Was compensated on the way by way of decent dividends (about 5% yield). However NOT SELLING NOW could be a mistake, only time will tell. However partially sold a few shares ….and I guess if it does become a 10 bagger, I hope to live to tell the tale.

2. Kajaria Ceramics: Have said this in the past: One of the worst things one can do is buy a small lot and sell on the up…and be left with 500 shares without the heart to buy at this price.

3. Bharti Airtel: First time bought it at 80 and sold it at 1200. Sadly a very small lot. Now hopefully will ride it from 257 to Rs. 500 at least – even if it takes 3 more years. Thankfully size is decent.

I could just go on and on. If you maintain a diary and you write down why you are buying (Subra told me, Subra’s barber, doctor, driver, reader – told me, whatever be the reason. When you maintain it in excel sheets you can also set targets, benchmarks, etc.

You write down the reason and go completely wrong. Whenever there is a BIG MISTAKE take action. I bought Crest Animation BECAUSE Vallabh Bhansali joined the board. Forgot to sell when he quit. So, so, so damn stupid.

Having a diary, writing a diary, seeing the DIARY REGULARLY for what action to take – all these are required.

I did not do it diligently, I wish I had.

Please listen to the rants of an old man…..

 

Related Articles:

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

  1. I wanted to understand how gain/loss is calculated in case of sale of shares.

    If I bought a share A in three lots of 100 each at prices 100, 120 and 150 and sold 150 shares at 130 what would be my gain? How is the acquisition cost calculated for tax purpose? FIFO or Average cost?

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>