A couple of months ago somebody asked me for tips – on Twitter. Frankly if somebody asks for ‘tips’ in general, I can ignore it. This person was telling me “I have bought EiD parry for 320” or something like that and he almost wanted me to endorse it.
Now comes the difficult part. Most of the people who read my blog know that I have been holding EiD parry for a real long time. In fact the first time I bought it was in 1986. I am still holding it. HOWEVER, you should remember that I hold Reliance, Tata Steel, Hindalco, Eid Parry, …and a few other commodity stocks including shares like Hindustan Oil Exploration.
These holdings of mine are divided into Investment and Trading. In case of EiD parry when I was asked this question, I had zero trading position – and a very small investment position. This investment position is more like a hedge – ‘what if my reading of the cycle is wrong’ kinda position. Zero conviction but a hedge against OVERCONFIDENCE. I will continue to do that and that was the only position that I had.
I was, in market language SHORT on EiD Parry. Since I never play the short game – no put options for me, this was the closest that I had come to cleaning out my sugar portfolio. Even now I am happy to buy as a cover – I have sold sugar in general, and Eid in particular at almost Rs. 90 more than the current price. Not a big willing buyer, but like to close deals while capping my greed and protecting my portfolio.
The best thing that I can do is of course ignore the tip asking readers. However, it is embarrassing when somebody says “I have bought…I hope it is a good buy”. Sure EiD could be a good buy at Rs. 300 especially if it reaches Rs. 600 in 4 years time (it still might) but it could be a far better buy at 225 than at Rs. 300. Commodity cycles can be brutal and long drawn. Politically UP and TN are ready for the next election, and 2019 general election could become 2018 general election, if BJP wins Karnataka. In a political year it is the farmer who will be favored, not the mills.
You need to remember all this while dealing in commodities. I own another commodity company – Deccan Gold – which I have been holding for the past 10 years. One court decision, one political change, one legislation – anything can upset gold. Most politicians look at gold as some amazingly profitable business – actually it is not. So one needs to trade in Deccan Gold too. No I am not telling you what is my position today.
Only if I were running a PMS or an equity advisory will I be answerable to my CLIENTS (not readers) about my portfolio. I am not a PMS provider..I have no obligation to tell you what I am doing.
YOU cannot run your portfolio by reading my blog. More importantly even if I tell you “I am bullish on xyz” it is a statement with a date. I could change my mind on Monday morning.
There is no way how you will know that I have changed my mind. So please read my views about equities and about some shares that you have picked up from my blog, but don’t expect anything very useful from this blog. I am sometimes a day trader, a delivery based trader, investor, value investor, deep value investor….I wear many hats.
Another important recent lesson is I do not understand valuation. I tried valuing Flipkart – I did not arrive at a value that Walmart paid for it. Ageing I guess.
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