One of the typical attributes of a young, impatient and a restless investor is to desperately look at new investing ideas when the existing ones look as promising as the rest. So the moment you meet someone the first question that comes to you is �Aur Naya Kya liya� (What did you buy new?). Isn�t that strange? Why do people want new things in life � always? So many families could have lived happily had people not looked for the new? Likewise so many investors could have stayed and become wealthy had they not tried identifying the new. Spare a thought for the guy who having bought Wipro in 1980 looked to exchange his stock for something new in 1981. A Rs 10,000 investment in the company would have grown to over Rs 350 crores had he just stayed with the old.
So does it mean that investors should do nothing and just sit back after an idea has been identified? Certainly not, all ideas need introspection and a constant monitoring vis-avis the new ones that come in every day. The only cost of investing is opportunity cost. So if Company A is doing well and someone whispers to you about the prospects of Company B then try comparing Company B with Company A before committing your money. If A is still better then B then buy A until you hi the 15% open offer limit!
Peter lynch says that the best stock to buy could be the one you already own.
Suppose you were running a restaurant, or a casino or a hotel, would you have looked at putting more money buying a new business each time your existing business threw back cash or would you have tried to consolidate your position in the business that provided maximum return for capital? Money has no emotion, given a free run it would flow to the spot that provides it maximum return but the emotions of the person in whose pocket the money resides allows it to do foolish things in the garb of looking at something new.
Many people look to buying something new to avoid the pitfalls of putting all eggs in one basket but one should remember that as long as the basket is strong and capable of holding the weight there is no harm in putting several eggs in one basket and if the basket is weak then even one egg can break the same. The idea is look for strong baskets not necessarily new ones.
There could be months where a smart astute and serious investor would not get new investing ideas in that case it would be prudent to analyse the existing stocks in the portfolio rather then hold cash and wait for new ideas. If a stock that he holds does not qualify as a buy then he has no business holding it in the first place.
It's really great information. That's why I keep buying what I already own!! Sriram Transport finance.
Dear Chandra whats your take on ramky post CBI raids on them due to investments in YSR/Jagan cos?I am stuck in it @ 450.
Vivek
CBI Sought information on some of the projects awareded during YSR Rule during 2004-09. As the Chairman was close to late YSR, it would have had a bearing on the CBI seeking information.
Basant ji,
I actually agree with your thought but i was just thinking of people who dont book profits at a stage when the stock gives them phenomenal returns ie maybe 100 or 200% in a short span of time.And then something happens like a sector collapse like the IT sector bust and they cant even recover their invested amount.I dont know about the valuations but they repent a lot after that.Just a thought....
[QUOTE=TCSer]Dear Chandra whats your take on ramky post CBI raids on them due to investments in YSR/Jagan cos?I am stuck in it @ 450.
Vivek
[/QUOTE]
Jaganmohan Reddy met Sonia Gandhiji in a cordial atmosphere where the discussions were fruitful and productive. Sonia Gandhiji directed the CBI not to harass Jaganji from now on......according to a newspaper 'The Hindu".
Jagan I suspect has to eventually merge his party with the Congress-I. So no IT raids by CBI on Jagan!
Whether and to what extent to look for new ideas surely depends on the state of the economy, and right now the economy is seriously in flux worldwide. We have been trying for decades to balance it on an inadequate base of consumer demand as wages paid for work have declined, and now it has broken down. Governments are floundering in trying to fix the problem, and popular protest movements are arising. There is no way to predict where things are going from here.
Under conditions like that, a prudent investor surely will avoid getting stuck in a rut.
i think active pessimism like the one stated by torrance ,is shared by most people presently,so the stocks in some pockets are available at attractive valuations!of course the state of the world affairs is surely in doldrums,but you want stocks cheap then how will you get them if everything is going great?
will the consumers of world"s companies stop eating food,wearing clothes,consuming things---?there can be slowdown massively but then there is our real task and art of identifying cos to invest with certain parameters and allocate capital prudently.historically there have been problems in the world periodically,whish then seemed herculan e.g. -ww1,the great depression of 1930 , ww2 nuclear cold war,iraq war,but as mankind has to survive,the world tends to come out of it eventually.
[QUOTE=siloni]i think active pessimism like the one stated by torrance ,is shared by most people presently,so the stocks in some pockets are available at attractive valuations!of course the state of the world affairs is surely in doldrums,but you want stocks cheap then how will you get them if everything is going great?
will the consumers of world"s companies stop eating food,wearing clothes,consuming things---?there can be slowdown massively but then there is our real task and art of identifying cos to invest with certain parameters and allocate capital prudently.historically there have been problems in the world periodically,whish then seemed herculan e.g. -ww1,the great depression of 1930 , ww2 nuclear cold war,iraq war,but as mankind has to survive,the world tends to come out of it eventually.[/QUOTE]
its not my attitude mr.ted.it is a fact of life.
Posted on:9/8/2011 10:37:58 PMgurleen
Really great Information Post. Please keep sharing more and more information . You really doing great job.Keep it up.