Sunday, July 10, 2011

Hold the winners..........

Friends,
I sometimes gets an itch to write something and when it is trying to educating small investors I get that fever very fast.....lol. Because I know there is no one to discuss what a small investment can do to their entire life.
I had tried my best and I has given out everything I have to my readers.I will keep on writing whenever something will come up to my mind.
The main subject here will be holding on to stocks.I have written many times and today I am writing again , "HOLD THE WINNERS"....these are the stocks your decision had come correct.Most of the investors has the experiance of stock going down invariably after buying.Well, that isn't the case with us, even a highly successful, I can put him with WB, Peter Lynch has also experianced that.
He has spoken somewhere , and if one try to write Peter Lynch in "search"tab here at my blog one will be able to open that post wherein he has written 10 out of 8 times the stocks has gone down after his buying.
That is a universal phenomenon.Don't get perturbed by it but let me tell you , there are stocks which never went down after buying.That is a catch here.Don't sell that shares.If your price is not coming back from where you bought , it means that after our buying the momentum has started and if the stock is fundamentally good then hold on even after it doubles.Wait for further upmove and then sell part, maybe 25% and not 50% to make the holding FOC(Free Of Cost).
Stock not coming down after buying is an excellent situation which doesn't come to all.That is a rare achievement or stroke of luck.It says that as soon as we bought the operation started.
I have written many times here that for any stock to run the floating stock needs to be dried up.Unless that doesn't happen the stock never runs.I am not writing how that paucity of floating stock happens , one need to read between the lines.
The mistake small investors make is , they sell stocks which is in profit and hold on to the losers.That is a wrong way of thinking.Hold on to the winners.These are the stocks which has coincided with your LUCK.These stocks are LUCKY for you.Where you are making LOSS is not your LUCKY stock.Then why one need to stuckup with such UNLUCKY stocks?Hold on LUCKY stocks.
Ofcourse one need to see what will be the future of the Co and how much more it can go up, but don't hang on with losers.Simple.......
Even one stock can change the fate of a small investor.It can wipe out the entire losses made in stock market.Yes, only ONE stock can do it.It has happened to me.It has happened to many others as well.
One stock can give such a big return that one can buy a House from it.One can pay for children donation from that.
I was talking with a friend from India and he was telling me that he has invested in stocks which are not speculative amd hence he is at ease.I told him, man, stock market itself is speculation, how come some stocks are speculative and some are not.The thinking itself is speculation.
Let me explain.When we say this stock is not speculative and this is speculative, we assume it and the assumption itself is a speculation.Whenever we assume something it is a type of speculation.
Anyway, coming back to stock market , speculation is a part of life as well.When we will take our last breath no one knows.When a word no one knows comes, it becomes speculation.We keep on assuming we will be there the next day but no one knows the next day fate.
The stock goes up and down and that is speculation.Someone buys because he thinks it will go up.That is speculation.Some sell it because he thinks it will not go up that is speculation.What is F&O?That we assume and buy futures and we assume and buy Calls/Puts.
It is all speculation, speculation and speculation.........

5 comments:

  1. Hi rajeev,
    Thanks for this post. Could you plz let me know if Rathi Steel(Me holding from Rs.24) is still a Winner?
    Thanks,
    Ramki

    ReplyDelete
  2. Hi Rajeev,
    Giving below one simple common-sense example for the message you are trying to convey.
    Dont remember where I have read / heard.

    In your garden, the most logical thing you do is to remove the weeds and preserve the flowers.

    So the common-sense thing to do is to sell your losers and hold on to your winners.

    But usually people do the other way around.

    Water the weeds and pluck the flowers.

    i.e. sell the winners & hold onto losers.

    So to become extra-rich, you need to HOLD ON TO YOUR WINNERS.

    Regards,
    Vikas

    ReplyDelete
  3. Hi Rajeev

    What is your view about Tecpro Systems?

    Regards,

    ReplyDelete
  4. Rahul, Tecpro Systems looks good.

    ReplyDelete
  5. Dear Ramki,

    I am not only holding rathi but adding aggressively around 13. My average price is also high but I am not bothered as I am seeing massive accumulation taking place. I have a strong feeling that this will give huge returns over the next 2-3yrs.
    Remember in the year 2005 it had shot up from 20 odd levels to 250. So anything can happen once the accumulation is over.

    Ofcourse Mr Rajeev has written a lot about it in the past and can always throw more light.

    I HOLD CLOSE TO 30K SHARES OF RATHI AND AM BIASED BY MY VIEWS

    ReplyDelete