The biggest risk in life is overconfidence. It kills. While crossing the tracks or the road when you are overconfident that you will beat the train or the car – can actually kill.

In portfolio management – it is not what you do not know that kills you, it is what you CONFIDENTLY know, but is COMPLETELY wrong that kills you.

And the worst is a bunch of people who not only don’t do what they do, but they confidently tell others “don’t worry, I will look after your portfolio too”. OMG that is worse, is it not?

When I tell people I have held a share for 40 years ….this is how it goes:

I bought this share in 1979 and have held it since then….

Eager beaver: wow…can you suggest some shares that I can buy now and hold for 40 years?

Me: I do not know…

EB: but you just said that you held a share for 40 years did you not…

Me: but I look at the results every quarter and decide that it is not worth selling..well at least not this quarter so I hold

EB: What if the results are not good one quarter?

Me: What do you mean not good one quarter?

EB: I mean what IF IT UNDERPEFROMS THE ANALYST’S projections?

Me: I never ever see the ANALysts’s projections.

EB: then how do you evaluate a company’s performance?

Me: I see the annual report and the quarterly results

EB: are you always right?

Me: No. I am wrong very often.

EB: Ha! then what do you do?

Me: I found MRF at a high pe, rubber prices high, and therefore I sold at Rs. 49,000. Then it went up..not sure how much

EB: See, this is what I mean.

Me: Hey joker I bought it at Rs. 800 a few years ago. Does it matter whether I sell at 49k or at 62K?

EB: Oh so..you are happy with this kinda performance?

Me: Yes.

EB: Is there anything else where you missed the top?

Me: Yes of course. I bought Apollo Hospitals at Rs 9 and sold it at Rs.135. …

EB: See…now it is at 1250!

Me: Yes, I realized my mistake and bought it back at 235..and am still holding it. Missed the rs. 100 of the ride!

EB: but if you had not sold …you would have made that Rs. 100 also..

Me: Yup, dumb me.

EB: what happens if the results are not good? do you sell?

Me: Well Orkay produced poor results, I sold. I sold it at Rs. 180…then it got delisted!

EB: Any other monitoring mistakes?

Me: Not sure. I bought Sun Pharma at 300..right up to Rs. 830..but did not sell at 1200. Bought Bharti airtel at Rs. 80 and sold at Rs. 1200 (but only 200 shares!). Yes such things do happen.

EB: any other MISTAKES in your portfolio?

Me: I have done not less than 4 posts on my equity mistakes…but I can tell you some of my portfolio ..whose cost is in single digits or sub Re1 because of the bonus and split…like Colgate, Siemens, Supreme Industries, Hdfc, Hdfc bank, Cholamandalam, Carborundum Universal, Tata Motors, Eid Parry, HuL, PnG, Cummins, Nestle, GSK, Bajaj auto, Bajaj finance, Kotak, …………

EB: how do you monitor so many shares?

Me: I do not.

EB: then who does?

Me: I don’t worry on a day to day basis….well not even on a Q to Q basis….

EB: then HOW DO YOU MONITOR IT?

Me: I don’t monitor it. I just sleep over boring results over a few quarters….