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Buffet, Lynch and other legends - Investing Strategies
 The Equity Desk Forum :Market Strategies :Buffet, Lynch and other legends - Investing Strategies
Message Icon Topic: Why not to look for new ideas – always? Post Reply Post New Topic
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ferrari
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Quote ferrari Replybullet Posted: 19/Apr/2011 at 12:07pm
Dear Basant ji keep posting such words of wisdom for the benefit of people like me.

I've learned a lot for this site, just that I need more discipline in practicing them



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Dundun
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Quote Dundun Replybullet Posted: 19/Apr/2011 at 12:17pm
I rellly rellly like it :-)
Basant ji, it's very true what you said, probably I'm also in the same category....would try to exercise some discipline.

Thanks,
Dundun
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Quote jigneshk Replybullet Posted: 19/Apr/2011 at 12:37pm
Basant, Your best point is investor must be open and constantly evaluate existing stocks vis-a-vis new ones. Out of 5000 scrips we had 1 wipro, 1 Infosys etc. Bluechips of yesteryears like bombay dyeing, orkay,baroda rayon, century fared poorly in comparison. Due to same reason one doesn't know if the stock he is holding is THE stock of century like Wipro:-). A friend of mine doesn't follow WB/Value/Buy & Hold style of investing but still made 40 times returns in last 5 years which is 109% CAGR against Wipro's 53% :-).
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ajayganmohan
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Quote ajayganmohan Replybullet Posted: 19/Apr/2011 at 12:45pm
Good one. Each time I learn something new from your comments. Do keep writing more often.
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Kabootar
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Quote Kabootar Replybullet Posted: 19/Apr/2011 at 1:03pm
@Basantji: When I first saw the title , I thought it might be a typo and you actually meant the opposite. But I stand corrected after reading the whole write-up.
Verbal diarrhoea! A most deadly disease.
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Kalyan
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Quote Kalyan Replybullet Posted: 19/Apr/2011 at 1:57pm
Excellent.
kalyan
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abhishekbasu
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Quote abhishekbasu Replybullet Posted: 19/Apr/2011 at 2:30pm
Originally posted by basant

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.



Wonderful post. However, I am not sure I agree 100% with the last line.

There are lots of reasons why people buy and hold stocks. Peter Lynch sometimes bought stocks just to be keyed in on its business. The thought behind it is that you tend to watch the companies that you are invested in more closely than others. Same for Rakesh Jhunjhunwala in India.

The last sentence seems to me contradictory to the overall message of the post. "If a stock that he holds does not qualify as a buy then he has no business holding it in the first place" -- implies that one should SELL any stock one holds that is currently not on his buy list.

Taking the Wipro example, there were times when Wipro performed extremely well (1999). If an investor would have sold out then, the record would perhaps not been as stellar. (Unless, of course, he had the foresight of putting the money into some other extraordinary stock).

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wiseowl
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Quote wiseowl Replybullet Posted: 19/Apr/2011 at 2:44pm
Originally posted by abhishekbasu



 
There are lots of reasons why people buy and hold stocks. Peter Lynch sometimes bought stocks just to be keyed in on its business. The thought behind it is that you tend to watch the companies that you are invested in more closely than others. Same for Rakesh Jhunjhunwala in India.




Today there are several other ways to stay clued in to the business ; buying a stock is not a necessity. Annual reports are freely available on a company's website (and in many other places) and so are transcripts and audio recordings of conference calls. There are several business newspapers and news channels. Watching from the sidelines is more easily possible these days than earlier. Of course, one needs to have patience.

"If you don't feel comfortable owning something for 10 years, then don't own it for 10 minutes."  - Warren Buffett



You alone are responsible for your actions.
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