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basant
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   Posted: 18/Dec/2006 at 6:58pm |
Originally posted by kulman
Incidentally I re-read some chapters of P. Lynch's book over this weekend. Just wanted to re-produce one interesting thought from him (may not be relevant on this thread though):
Even the most thoughtful and steadfast investor is susceptible to the influence of skeptics who yell ‘Sell’ before it’s time to sell…We’ve all been taught the same adages: ‘Take profits when you can,’ and ‘A sure gain is always better than a possible loss.’ But when you’ve found the right stock and bought it, all the evidence tells you it’s going higher, and everything is working in your direction, then it’s a shame if you sell. A fivefold gain turns $10,000 into $50,000, but the next five folds turn $10,000 into $250,000. Investing in a 25-bagger is not a regular occurrence even among fund managers, and for the individual, it may only happen once or twice in a lifetime. When you’ve got one, you might as well enjoy the full benefit.
-- Peter Lynch, in One Up on Wall Street
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Modestly I accept to having been an investor to these 25 baggers but believe me apart from money they give you a sense of tremendous joy and satisfaction. They also carry a silent message about the relationship between the investor and the stock and that relationship is termed "conviction". In all the time that I held on to that sacred 25+ bagger I never looked at it like most people do "my cost price is so low what can it take away from me but at all points I looked at the current market price to understand the potential loss in case the stock falls". That helped me in not being overconfident (arrogant) and also to understand the risks a bit more closely.
Any one can sit on a big multibagger with the thought that the purchase price is so low but in that case there are two possible scenarios
a) They stock has a small percentage to the portfolio
b) He is looking backwards rather then forward.
I am interested in my cost price only as much as I am interested in the 2003 EPS of the big Multibagger that I am setting on.
Edited by basant - 18/Dec/2006 at 7:00pm
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kulman
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Posted: 18/Dec/2006 at 7:09pm |
Any one can sit on a big multibagger with the thought that the purchase price is so low but in that case there are two possible scenarios
a) They stock has a small percentage to the portfolio
b) He is looking backwards rather then forward.
Hmm....Sage from Salt-lake is at it again!! and words of wisdom have started flowing again....I'm listening/reading very very carefully......
Edited by kulman - 18/Dec/2006 at 7:10pm
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Life can only be understood backwards—but it must be lived forwards
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xbox
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Posted: 27/Dec/2006 at 11:11am |
In this market if you give someone Rs 5 lacs and if he is smart he would be a crorepati in 5 years and also vice versa.
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Basant jee, tell address of this 'someone'. I have business for him. Or please pass some scripts that I (we all) can buy and become business for somebody.
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Don't bet on pig after all bull & bear in circle.
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basant
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Posted: 27/Dec/2006 at 11:52am |
Vipulji: These things just happen. I have done a lot better then that but at the time of investing I did not think that I could make a 55 bagger in Pantaloon or a 9 bagger in Tv18. But generally my process has been expedited by the stream of multiple multibaggers. For example I made a three bagger in HTMT then made 40% in NDTV then a 9 bagger in TV18 so the final answer looks very good. I doubt if anyone could say with a great deal of surety whether his investments would become a 20 bagger in 5 years but for me it has been a lot better then that and if you ask me whether I can do it again my answer would be - I hope so but the last time it just happened and the next time it happens I will tell you. Cannot be sure on this.
In my initial days I was expedited by leverage which I had explained in this section..
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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basant
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Posted: 09/Jan/2007 at 10:27am |
Over the past few years I have realised a particular thing. That no body just no body in this world will buy you a free lunch. SO even you are interacting with some of the better known fund managers across the world please be sure that while all that conversation could make you feel proud of your contacts they are actually worth nothing.
1) They would never tell you what they are bullish on until the stock has moved at least by 50%.
2) When they sell out they would raise an alarm only after exiting their position.
This applies irrespective to how close or far you are to them.
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kulman
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Posted: 09/Jan/2007 at 10:54am |
Yeh zindagi ka kadwa sach hain! Naa baap bada naa bhaiyya....sab se bada rupaiyya!
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Life can only be understood backwards—but it must be lived forwards
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BubbleVision
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Posted: 10/Jan/2007 at 12:20pm |
That no body just no body in this world will buy you a free lunch.
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Absolutely true.....This world of markets has NO FREE LUNCH...
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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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basant
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Posted: 10/Jan/2007 at 12:26pm |
I think that it is important to know this concept of "no free lunch". My strategy revolves around not in trying to know what they are buying (because that in any case would not happen) but in trying to sell them what you are bullish on.If the logic makes sense then the person at the other end would be interested and interest for a midcap could drive prices like crazy.
Edited by basant - 10/Jan/2007 at 12:28pm
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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