Yet again a new post on some Sunday thoughts...
The most important thing in any investment or trading business is to SELL !!! ....Coz otherwise all money theoretically on paper only isnt it !!! Well i dont believe so in case of investment !!
According to the investment rationale which is that u are not buying a stock trading at X price but you buy a BUSINESS , their Model and a share in the revenues .. .. So as u start a business u dont stop it when sales decline but when u feel the business no more worth ur investment and time !!
I remember people telling me can u suggest me a multibagger !!!Well it will take time to be a bagger but are u ready to wait for it and give it time , And if u sell before it aint a bagger for u !!!
I remember in such cases people end up with the line " Yaar I m a short term investor !!!!!!!!!!!!!!!!!!!!!
I have never ever understood the definition of that ... For example the other day i sat with a business man and asked him if u open a shop how much time do u think u would wait for it to breakeven he said 6 months !!! ... The same businessman would want his bought investment to be giving super gains in 6 hours !!! this is where the stocks business goes wrong !!
The biggest problem i generally face in recommending stocks to my clients , friends , relatives etc has been to make them not book profits and rather add to winning investments !Its a difficult task to cut their urge to SELL ...
Some common situation i have faced :
Friend : Nooresh tell me something which i should buy for long term gains
Nooresh : Hey buy walchandnagar inds at 1800-1900 levels and forget
Friend: Dude i have it yaar u told me at 1500 .. tell me something else i was planning to sell getting some bucks ...
Nooresh: Abbe c..... tera jo business hai gold ( XYZ) ka usme 3 dukaan kyon khol raha hai ... Start a Vada pav stall, something else is good , right na dude !!!!
It shows in business people would make good returns things better but in stock exactly opposite rather they go worse think of stopping good things !!! ( Walchandnagar is trading at 4500 today , just an example )
So this is how it goes SELLING is not the greatest thing to do in a long term bull market which every person is a bit aware of the India Story ...
For example , In all my replies to people who asked me about reliance , rnrl , rpl queries my answer was never sell only buy and forget ...I still maintain the same ... if u remember our grandparents keep passing over the gold ornaments to the next generation marriages, have u ever sold ne of them 🙂
Well my emphasis on NOT SELLING lies only on good stocks and not pennies 🙂
Every investors dream of having a 5 bagger or a 10 bagger isnt it....But how do u get a 5 bagger in ur portfolio ...Is it by research , is it by news , is it by luck no its not .....The basic thing abt it is not to sell till the company has changed tracks on the working side... Half of the street is so happy with the 10% move they can never imagine a 10 bagger ...
So the bottomline is only way u make it big in investing is by developing the art of NOT SELLING !!
Another thing on the personal front is i am not the one who gives a short sell on a stock easily .. The last time i gave sell calls were when we declined frm 14700 to 12300 ..Now u will ask why ... The simple thing is in my short period in the market i have only seen huge eqty stocks like ifci double in a week or RNRL 35 % up in the day but not a stock go down 40% in short time and that too by giving a chance to short .... And above all my calcualtion factor for recos does not fit well in shorts ...
Comments on the above posts are welcome !!! there is a commenting tool on blogger !!! Also http://nooreshquery.blogspot.com
Best Regards ,