I recently sold Mahindra Holiday Resorts for Rs. 430, Goodricke for Rs. 208, and EiD Parry for Rs. 202, and Kwality foods for Rs. 122.

All reluctantly. All at extremely good trading/ investing profits. All because my broker said so – and listening to him has been far more profitable than my own philosophies – 9 out of 10 times he has been correct, at least over the long term. Maybe I should have sold much more, much earlier..I stuck to Reliance too long and Tisco has been a great trade item instead of an investment item. My stubborn ‘buy and hold philosophy’ has cost me some serious opportunities. I stuck with Hindalco too long…the big names. Even fund schemes staying long has been fine, but one fund house is on a fast down hill, so one needs to keep reviewing.

Your portfolio should not become an advertisement for indexing!! be careful. Thanks to my broker MORE than my own skills, my portfolio is doing well.

Why am I saying all this? Just to say that we tend to get confused between a short term goal and a long term goal. We forget that our long term goal has to be ‘buying great stocks at fair prices’. We keep buying good stocks over long periods of time hoping that a good company cannot do badly..or some such notion. I am happy that I did not add Dr. Reddy’s lab beyond 2700..but did not sell at 3800 either. Fine. My long term aim is to build a good portfolio (my short term aim to book some trading profit is conflicting here?). So be careful about your trades. Booking profits is nice, but it should not impair your longer term goal. So my Mahindra Holiday Resort profit booking has helped..I NOW HAVE A CHANCE to pick more shares at say 360. This ensures that my short term goal has helped me in my long term goal of accepting that partial booking of profits (tax free) is not so bad after all.

Over the past few years people have been willing to pay a lot, lot more for growth stocks. Look at shares like Essel and Kajaria – the way they have shot up makes it attractive to at least partially book profits. However whenever I have booked..it has flown higher! Stubbornly sticking on to MNC FMCG could make you miss Dabur, Emami and Godrej Consumables, right? Remember Baba Ramdev is making fast inroads into the fmcg market too!!

All this exercise is just to tell you that you should keep reviewing your a. Goals b. Strategy and c. Implementation.

I found 2 of my biggest shortcomings (which I am trying to overcome) have been a) inertia to sell companies which have had a brilliant past performance: Colgate, Cummins, Siemens, HuL,..) and b) not booking losses in my investing portfolio (held Crest Animation too damn long) and c) getting biased favorably to a management i know / met recently.

Working on all three weakspots.

What are your weak spots?

 

 

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  1. three things
    1.balance sheet
    2.cash flow statement
    3.income staement
    one need to study
    before investing
    i cant understand how people can decide price of a stock without knowing the market cap and financial analytic,this is complete suicidal!
    dr m surendra nehru

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