I would like to throw some light on my bad calls today.
I have given many bad calls like Allied Digital, Rathi Steel,Ennore Coke, Nutek India, etc etc
Let me discussed it.
Remember first thing.Always try to find things on your own.Don't follow someone blindly.Mistakes are bound to happen.We are all human being.
Second, in stock market be always on toes.
Always look out for Promoters selling,Eq expansion,sales, NP and diversification of Co.
These are ares where one needs to be very very agile.
1)Promoters selling is a very very big negative for any stock.So every quater go to bse site and look whether promoters stake has decreased or not.Any selling over 1-2% in promoters holding says something is wrong .......try to find out why that is happening.
2)Eq expanasion is a second very big thing one needs to lookout for.Whatever stocks you hold, click on all annoucement on bse everyday to see if there is any annoucement from the stock you are holding and if you find one click on that and read what is written there.If Co is dilutiing eq then become agile.If the sales is not good and if eq dilution is taking place then you need to sell such stocks immidiately.eg.Nutek India.
3)Always look for sales qr to qr and year to year.If sales remains stagnant and profit remains stagnant it is OK but sales going down and hence NP also going down then ALARM BELL needs to ring in your EARS.As soon as sales is down we need to understand that something is wrong here.Start selling that stock unless you see some reason why that happened and you are confident that sales will be back to normal.
4)If bottomline is going down then again that is a khatare ki ghanti.Why the NP went down?That is the first question one needs to ask yourself.If raw materail price has gone up then it means that Co is not able to passon the cost to consumers.That is a bad productline.
5)Alawys be on alert for any diversification in business of any Co.See what they are trying to do.If you feel that Co will not be able to maintain the new business it is time to sell the stock.
See friends,stock market is not for those who wants to buy and sit on it.Ofcourse one can do that but then one needs to buy stocks which are already bluechip like Siemens, L&T, BHEL, ABB, Areva, Thermax, Bharat Forge etc etc where the business has already been established.These Cos already have big name and hence they have no problem in selling their produict.
But for Midcaps and Smallcaps one needs to be on constant vigil.
It is not possible for me to keep writing things for each and every calls I made here that this Co is not doing good or the sector has gone out of favour etc.
So please keep track on what you possess and take decision immidiately.Don't wait for anyone.
The best thing to me to do is, sell stock which you bought goes down by 15-20% immidiately even if it is in a LOSS.Because once stock goes down by 15-20% then there needs to be real bad news coming up otherwise market(read operators) are very smart not to sell such stocks.
Once stock goes down by 15-20% then that is a downtrend and it becomes very hard to come back.So sell as soon as stock goes down by 15-20% and if feel that stock is good ,buy lateron.
The downtrend can be of various type.The momentum is broken and the momentum gets broken for a perticular stock even when there is bull market.The overall sentiment is not good of the market and hence stocks are going down.
Most probably, when a stock goes down by 15-20% then it is time to sell even if it is a LOSS.It may happen that some stocks may deceive you and come back again but they are RARE.Most probably if you sell stock on 15-20% down from your buying price you are going to be right.
Again I reiterate, this is my view and I maybe wrong.Take your own call.