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kulman
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   Posted: 21/Sep/2006 at 9:50pm |
I remember having read this recently:
Investing is more of an art and less of a science. Investment decisions are made by human beings and are therefore prone to subjective judgement and human error. As long as we do not have a universally agreed system of pricing stocks, leaving room for subjective judgement, and as long as investments are made on the basis of hope, fear and greed, returns will vary from one person to another and the market will be highly inefficient. Three hundred years of irrational behaviour including Tulip mania, South Seas bubbles, real estate and gold rushes, concept stocks, dotcoms and Asian Crises have shown that investor psychology can move the market violently both ways.
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Life can only be understood backwards—but it must be lived forwards
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basant
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Posted: 21/Sep/2006 at 9:50pm |
I still maintain my views because that is what I have practiced and gained from. Coming to the theory of partially selling under "ignorance and doubt"well that was a reason I had put down in my first post.No arguments if that is a cause for selling!!!
If an investor can research his company well he would never fall into this dialema which brings us back to where we started.
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kulman
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Posted: 21/Sep/2006 at 10:00pm |
Basantjee
Some Gurus also advise "not to fall in love with your stocks" or "do not marry your stocks".
What does it mean?
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Vivek Sukhani
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Posted: 21/Sep/2006 at 10:07pm |
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Basant, I am not doubting your investing philosophy. Its simply that I dont want myself to be over-confident that I practise this trick. There are people who have made tonnes using this partial profit-booking style. Investing requires constant value discovery and unfortunately, capital is a scarce resource. We have no other to book some gains and re-invest it somewhere.
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Vivek Sukhani
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Posted: 21/Sep/2006 at 10:07pm |
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Good question, Kulman
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basant
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Posted: 21/Sep/2006 at 10:08pm |
Hey, I am not asking an investor to marry his stock all I am saying is that he would book partial profits only when he does not know why it has gone up. I did advocate a full sell out when fundamentals did not appear conducive and partial sell off is in no way not marrying neither divorcing. It is like divorcing but still living together (on a lighter note).
I am not aware of any guru except SIr John Telpleton who recommended partail profit booking. Sir John Templeton's case was different he used to run a mutual fund so I am not sure whether this strategy was innitiated by regulations or design.
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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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Vivek Sukhani
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Posted: 21/Sep/2006 at 10:14pm |
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well basant, I dont think ordinary mortals like me are any way near to gurus.... and most of us( meaning other forum memebers and general investors) are like me, so we cannot try to be a guru. And also, we get new gurus every 10 years. May be this will be the policy of a new creed of gurus...
Edited by Vivek Sukhani - 21/Sep/2006 at 10:18pm
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basant
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Posted: 21/Sep/2006 at 10:21pm |
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To the best of my knowledge I was talking about Buffet, Lynch etc.Can you name any such new creed of gurus!!!
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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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