Whether I am in a meeting or talking to a group..at the end I am asked for some tips. So I share some of the shares in which as a family we have investments. Believe me in shares like Tata Steel, Hindalco, etc. we may have under-performed the market (sensex) by a big margin. In shares like ITC, Monsanto, MRF, (current position nil) selling off looked good recently, and not so recently…
So the first wrong question: GIVE ME SOME TIP.
Does not work that way. You need to create a lot of screens on management quality, consistent returns, decent market share, area of competence….and then worry about timing if at all.
Second wrong question: TELL ME A GOOD SHARE FOR A 20 YEAR HOLD
There is no share which is a 20 year hold…you buy a good share and keep watching the Quarterly results. When the results are good, and the company is doing well, you keep adding more of the same share. It is perfectly possible to buy a good share at various prices and keep increasing the value of the portfolio depending on the money that you have. You build a portfolio over a lifetime not just buy on one day. You need patience and knowledge to build a portfolio.
Third wrong question: WHAT IS THE GUARANTEE THAT EQUITY WILL GIVE GREATER RETURN THAN DEBT?
Well, I do not see why I should give you a guarantee that equity will perform better than debt? It is your call in what you should invest. However, given the fact that equity investors are those who take higher risk, they will DEMAND a higher return – or money will not be available. So understand the basics – the equity of a well managed company will surely outperform debt of a good quality company.
Fourth wrong question: You bought Hdfc, Colgate, etc. when it was cheap.
Completely wrong statement. None of these shares called me up and say ‘today our pe is going to reduce so please buy’. When I bought many shares in my portfolio, they were still selling at a HIGH PRICE EARNING RATIO. No issues.
Fifth: PLEASE SUGGEST SOME CHEAP SHARES TO BUY
Completely wrong. I have never, ever bought any cheap share ever especially for keeping for a long term in my portfolio. So please do not ask me for a ‘cheap’ share. If you mean inexpensive shares, then it is a different story. Once upon a time companies came to the equity market at not very high prices. For example Hdfc bank issue was at par. As shareholders of Hdfc Ltd. we got 200 shares at par. Hdfc bank listed at Rs. 40 and we could buy it. Now Icici Prudential Life Insurance was issued at Rs. 33o. Will it give you a 20% CAGR over the next 20/30 years? MY LEFT FOOT.
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