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deepinsight
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   Posted: 07/May/2007 at 9:54pm |
Originally posted by basant
But that is why we could keep looking at ideas two in an year is good enough and we do get two in a year. |
And the other question is what -if anything- should one do with one's portfolio if it becomes overvalued?
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"Investing is simple, but not easy." - Warren Buffet
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deepinsight
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Posted: 07/May/2007 at 9:56pm |
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Always used to think what must be going on in the head of guy like Philip Fisher who held some stocks e.g. Motorola and Texas Instruments for decades with amazing results.
Edited by deepinsight - 07/May/2007 at 9:56pm
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omshivaya
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Posted: 07/May/2007 at 9:57pm |
If it's a growth stock, there would definitely be moments when the stock would look expensive. Then one should see just how much can the company scale up. The idea is to hold on, if the market is pretty large(in case of Pantaloon, TV18),since earnings should catch up. This is applicable to sector leaders only or the firms having leadership position in their niche area.
But that is all one can do as there cannot be general rules as per me. Gut plays a vital part in any such decisions of mine.
Edited by omshivaya - 07/May/2007 at 9:59pm
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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deepinsight
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Posted: 07/May/2007 at 10:05pm |
Originally posted by omshivaya
If it's a growth stock, there would definitely be moments when the stock would look expensive. Then one should see just how much can the company scale up. The idea is to hold on, if the market is pretty large(in case of Pantaloon, TV18),since earnings should catch up. This is applicable to sector leaders only.
But tha is all one can do. |
Omji: Its the same with Nucleus - while you were insightful to buy early @ 15 times trailing you will be more hesitant now@ 30 times trailing- future appreciation is purely dependant on operational results and leaves little margin of safety for a new buyer.
If earnings have to catch up- we are borrowing returns (capital appreciation) from the future and the price appreciation has had no meaningful impact unless we are selling as we are going to hold for the long term operational performance anyway.
The bind is - we cannot sell - we cannot buy - we have to just hold.
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basant
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Posted: 07/May/2007 at 10:28pm |
Originally posted by deepinsight
Originally posted by basant
But that is why we could keep looking at ideas two in an year is good enough and we do get two in a year. |
And the other question is what -if anything- should one do with one's portfolio if it becomes overvalued? |
Sit tight and ignore the weightages and look for better ideas but I never chase ideas just keep looking for them Chasing invariably gets us to the wrong destination.
Edited by basant - 07/May/2007 at 10:29pm
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omshivaya
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Posted: 07/May/2007 at 10:28pm |
Yes I did buy Nucleus earlier, but now it should be expected to be a growth player. I would look at its price appreciation after every 6 months, to even start analyzing if earnings will catch up with the price.
Nucleus I would not be hesitant to buy at 900 levels, bcoz I expect an EPS of 52(conservative) out of it for FY08 and would give a decent 25 PE trailing to it, so price target for me would be 1300, a decent 44% grower in a year. But If I have a better story like TV18 and Pantaloon, I wouldn't go for even that.
Let me illustrate a bit(it is my investing style, and may not be suitable for everyone. To each his own):
I for example have a yearly target, where my portfolio should be after 1 year. If some stock reaches the price I expect out of them before the timeframe of 1 year, I dilute some off it, and put it into something which is underperforming...for the moment. Like if Network18 reaches 800 bucks(which is my FY08 supposed target) anytime soon, I would dilute some off it and put that extra amount into Pantaloon(if it is still trading around these levels by then). It all comes down to the target I have set my portfolio to be in 1 year's time. But overall, in next 3 year's time frame I would not look beyond the current concentrated portfolio I have. After 3 years....maybe!!!(If something better comes up).
Edited by omshivaya - 07/May/2007 at 10:31pm
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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basant
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Posted: 07/May/2007 at 10:32pm |
Originally posted by omshivaya
I for example have a yearly target, where my portfolio should be after 1 year. If some stock reaches the price I expect out of them before the timeframe of 1 year, I dilute some off it, and put it into something which is underperforming...for the moment. Like if Network18 reaches 800 bucks(which is my FY08 supposed target) anytime soon, I would dilute some off it and put that extra amount into Pantaloon(if it is still trading around these levels by then). It all comes down to the target I have set my portfolio to be in 1 year's time. But overall, in next 3 year's time frame I would not look beyond the current concentrated portfolio I have. After 3 years....maybe!!!(If something better comes up). |
In case we have some part of the portfolio that is underperforming this is the smartest thing to do.
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omshivaya
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Posted: 07/May/2007 at 10:35pm |
In case we have some part of the portfolio that is underperforming this is the smartest thing to do. _____________________________________________________
That is also one of the benefits of having a concentrated portfolio in that, we can keep track of almost everything in a focused manner.
Edited by omshivaya - 07/May/2007 at 10:35pm
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