Technical Analysis of Indian Equities by Nooresh


New Video on Sensex Analysis ….. and Sunday Thoughts

Sunday post for a change πŸ™‚

Have made a new video on the analysis i posted for the run starting from 15950 ..
Link to download

Check for more videos....

Might try to post a detailed long term and short term view on Sensex with probable scenarios.

Sunday Thoughts :

Portfolio tracking and Money allocation anomalies:

After putting brief notes on tendency to buy some amount of shares , Stoploss lets take another topic thats portfolio tracking and money allocation ... There would be whole lot of books written on the above but would pull out some things which we do and what can be done to optimize.

Portfolio Tracking :

I believe not many of the investors use portfolio management or tracking softwares and many have a simple note of paper or excel sheet and some just rely on the back office softwares of brokers or just the demat details.... So cant really say what ppl use but there are certain things which i find intriguing in this process..

The first thing a person tends to see is the overall profit loss , most biggest loser , gainer generally ...
At times we miss out that there might be a 10 % loser which is effecting a major loss to the portfolio coz that might be biggest allocation done...

When i discuss with whole lot of traders one thing comes out common : Should i average the stock...

The next question comes to my mind Is the existing holding worth keeping in your portfolio , averaging is the second part !!!!!!!!!!!!!!

How many of us ask this question while deciding on reshuffling or reviewing the portfolio ...

Some will say I DOUBT it !! other will say YES i definitely feel the stock is great and should do much better in days to come and i have enough cash reserves also and i highly believe in the potential of the co ...

So next thing is if u DOUBT it find something which u believe in and if its YES
How much do u have , wat price and cmp ? is the next question that pops...
Say reply is 1000 at 80 rs and current mkt price 40.. !!!

Even me before asking next the investor would say i would rather pick up 1000 shares tomorrow as this is the worst it can stay at tomorrow and my average would come to 60 .

Earlier the same investor was ready to put in 80k and is now doubting 40k !!! .... If u believe in the stock and u have good cash reserves then u should actually be alloting 80k no matter if the price is 40 or 50 !!! is what i believe terms well mathematically .......And the average would to 53 and u could actually bail out some allocation at 50 -55 levels !!! and make ur risk go down substantiallly ...

Now coming to the simpler point which never comes to our mind.......Why do we tend to think this way ..... I believe its just coz its a human fixation with the COST PRICE of the stock and never the money allocation ..... While averaging one may keep putting more and more money to bring down the cost but would forget to realize a stock which was 10 % of the holding may scale upto 25% of holding with a big loss....

The simpler way that comes to me naturally to track my portfolio and i believe many of money managers, some of the readers would be doing !!!
Simply put if i just remove the COST PRICE column from the excel sheet or my software and just replace it with CURRENT MARKET PRICE and just check the overall portfolio value now to what it was at start or at some period back ...

The thinking process now gets so simple !!!
Only question i need to ask is >... Is the stock ABC worth keeping in the portfolio at this point of time , if not how much allocation should i reduce or add ?

"" The logic behind the question is We are not married to a stock or like the stock is plain serious business of wealth creation and i stay with the particular stock only if it makes business sense for now or the future or not !!! ..... It doesnt matter if its a gr8 co or CEO is a visionary all that matters is whether it can create wealth or not ....""

Put it simply Everytime we follow this approach the portfolio would tend to be more clear and the normal human ideology of BOOKING big LOSS or BOOKING small profits which stops the mind doesnt ever come into the picture πŸ™‚ and we get unbiased ( most difficult thing to do naturally )

Do post your comments on the views and give ideas to make all of us decide about trading and investing easily !...

Best Regards,



Article by Nooresh Merani

Nooresh has written 2771 articles.

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