Types of Investment mistakes
Let me enumerate some of my investing mistakes…or let me tell you how I have made amazingly stupid mistakes…
- Mistakes of commission: buying the wrong stock for the wrong reasons. I knew the promoters of Silverline, Patheja Forging, Krishna Filaments, Shaan Interwell, Indiana Dairy. All turned out to be shit. Luckily for me not much quantity got out pretty fast, and did not lose much. REASON FOR BUYING: KNOW the promoters, so I need not do research. Mistake corrected: Do not buy shares of companies where I know the promoters too closely. Let my broker decide.
- Bought low and sold very high: Bharti Airtel..cost price Rs. 80 and selling price Rs. 1200. Loved the deal, not the quantity. I was convinced it was a good buy. I could have bought it on the way up and sold. Even picking up more shares at 900 would have been fine. Every time I saw the share and liked the numbers I told myself “I already have it”. I had 200 shares. Very very unlike me, but mistake of omission rather than commission!
- Bought for a wrong reason, and held on despite the change in circumstances. I never liked the balance sheet, promoters or the management of Crest Animation. So I used to be a trader, rarely an investor. Then Vallabh Bhansali joined the board, so I bought a decent quantity. DID NOT SELL WHEN HE LEFT. Well, did not sell everything…still holding shares, it is worth zilch.
- Traded did not invest in Essel Propack..currently holding just 500 shares…originally had much more. Traded out completely and did not buy it back. No major regrets…but not holding enough.
- Missed opportunities: Maruti suzuki did not buy on listing. Learnt lesson bought TCS on listing.
- Bought Infosys 400 shares @300..and quickly sold off at 700. Lesson learnt: held Hero Honda 1985 to 2013.
- Sentimental – still holding Reliance, Tata Steel (imagine the original shares had JRD Tata’s signature on it), Ta Mo, Hindalco.
- Sentimental good: PnG, Colgate, Hul, Siemens, Cummins, GSK, Novartis (sold recently), …cannot do an honest review. Bias
good mens rea kinda post….
VK
Although I am largely into MFs., I very much like these series of your posts. Would have been nicer if you could dwell it on a bit more! For instance, would you have expected TCS to do a Satyam? Would that have changed your stance? Although many people continue to remain frustrated with Airtel (for that matter all service providers!), what made you see value in it – whatever little positions you took – They had/have no moats that one can think of?
subra
God please! i am not an investment theoretician. I have made money in commodities – Supreme, Coro, Cholamandalam, Eid parry – no ‘investor’ worth his salt would touch these companies.
I saw growth in Airtel, did not see enough. Of course bought later on..and still made much more money than my telephone bills for the next few generations. Moat? god these theory guys have taken it just too far.
quality of management? to me that is the ONLY thing.
subra
ha corrected one more mistake sold Reliance..1977 to 2015..end of relationship
Sreekanth Yelicherla
Subra sir, with your comment on Reliance, I suspect at least a part of your readers may decide to exit from Reliance too 🙂
aparoop
Subra sir no lessons from your HDFC relationship
Ajish - UAE Exchange
I am new to shares and such investments. Could you tell me which companies are best for starters? My budget is below Rs.5000/- as a starter.