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Vivek Sukhani
Senior Member
Joined: 23/Jul/2006
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Posts: 6675
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   Posted: 22/Sep/2006 at 3:33pm |
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Mr. Prosperity, instead of putting in money he has pulled out money. The point is, it is very easy to be confident and convinced durin g the bull run, but I assure you, let the cat be set among the pigeons, water and milk will get separated.As far as your Q1 is concerned, I think the answer may be a very big positive or a very big negative. If he has sold out stocks like Essarand Ispats during 1994, he would have saved a big fortune. Note they were in A group at that time...How many feel confident about asian electronics when it is struck repeatedly by lower filters. What happened to people who were so supremely confident about Bata and Liberty Shoes( buy what you see stories).I dont want to sound sarcastic, but then I assure you you cannot form formulas and live in stock markets. There is a thing called flavour, and you have to encash it. Mr. Basant can easily recall the Net replacement theory which was being put in use by the experts then... and for your kind information even some of the Blue Chips are yet to reach their valuation of that time. And let me also take this opportunity to tell you 1 more thing, in this market if you try to walk with your back too starightened and heads raised, your back will get cracked in no time. Most of us are yet to see what can a bear market do, but I can assure you that those horror stories can make the bravest of all shudder...
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Vivek Sukhani
Senior Member
Joined: 23/Jul/2006
Online Status: Offline
Posts: 6675
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Posted: 22/Sep/2006 at 3:48pm |
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Also, oy is to be remembered we talk of impact of corporate profits on stock prices, there is a theory of relexivity as well which will tell you the impact of stock prices on corporate profits. That is the time when all your fund raising plans go yo jeopardy ... all your targets go hayware... all your plans get crushed. And dont call me a follower of Doomsday Cult....I have been privileged to see some bear markets although I was not active then and I have seen how my dad and grand-dad had made a killing just before that. My grand-dad got out of Nicco corporation when it was 140 rupees per share(he sold 8000 shares on a single day, and now I have just 3000 left) and today even 40 rupees appear a bombastictarget for that company.And for heavens sake, dont say why didnt he sell the entire lot.Its very easy to sound great afterthe event has happened, but to play the game, requires different sets of skill altogether than being an observer.
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prosperity
Senior Member
Joined: 01/Sep/2006
Location: India
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Posts: 546
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Posted: 22/Sep/2006 at 4:04pm |
With due respects to you Vivek, here is what i have to say -
Any fundamental investor like me, should book profits only if the stock has run "substantially" ahead of its fundamentals OR if we can find a more appealing fundamental business/stock..
Before any long deep bear phase, (which you rightfully said is very scary and tests the real guts of investors) there is a period where stocks runs "substantially" ahead of its fundamentals - This is what happened just before dot com bubble bursts..
I 100% agree in these situations, one should book profits..
But India is currently experiencing structural bull run for past 3 yrs from 3000 to 12000 sensex runs .. earnings have also run up and hence the valuations are NOT way ahead of its fundamentals ..
My strategy is simple - Enjoy the ride on my portfolio as long as the stocks does NOT run ahead of its fundamentals .... and if does, just start getting out of the market..
And this prevents me from entering into long deep bear phases coz that would HAVE TO precede by excessive valuations - irrational exuberance ..
I do not call the may crash as long deep bear market ...
Hope it clarifies - its prudence, cautious and yet non-scary 
Cheers !
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basant
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Joined: 01/Jan/2006
Location: India
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Posts: 18403
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Posted: 22/Sep/2006 at 4:08pm |
if you try to walk with your back too starightened and heads raised, your back will get cracked in no time. Most of us are yet to see what can a bear market do, but I can assure you that those horror stories can make the bravest of all shudder...
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Vivek, sometimes I do not like your language. It could be your style but I think that it is directed. If it is the former you may ignore my comment. There is no need for you to say whose back would be broken and who would have a spineless back. We all know what happens in a bear market and secondly it is naive of you to suggest that most of us have not seen a bear market. Please do not make such sweeping statements.
Now tell me how does selling some shares and buying some of another company reduce losses in a bear market. The losses are reduced when you change the asset class. from equity to debt/cash. Funny you did not mention that.If you sell a bit of Tata Steel and buy some ACC no matter what happens you will lose money when the markets fall.
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kulman
Senior Member
Joined: 02/Sep/2006
Location: India
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Posts: 9319
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Posted: 22/Sep/2006 at 4:14pm |
The person I'm talking about got 2000 shares of SAIL (cyclical) at 7 odd, then promptly moved out partially by selling some 1000 at 30 odd. He says balance, he will gift to his son...inheritance...also earn div yield (if SAIL remains profitable of course)
There are successful people adopting "hold forever" strategy like RJ...but look at their entry price...they have heavy margin of safety. And they are rare breed.
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Life can only be understood backwards—but it must be lived forwards
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Vivek Sukhani
Senior Member
Joined: 23/Jul/2006
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Posts: 6675
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Posted: 23/Sep/2006 at 1:43pm |
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well, basant it may be directed but thats an accident. My only aim is to remain realistic in this market where hype is ruling the roost.I intend no slights against anybody and I beleive its normal to get over-heated in an argument at times. We belong to opposite camps and hence our arguments will clash with each other. Actually, I intended to support the person in question who Kulman has described. I intended no slights on you or any one else. Although, I agree there is no need for me to say whose spines will be broken and whose will not, yet the only intention was to pinch the forum members into being more aware of the pitfalls of this market.And pinch is also a wrong word, I wanted to coax them to become realistic. It was my mind and I spoke it without any fear. I very well knew that my comments will raise eyebrows but thats what I intend to do, and that I beleive should be the purpose of any oracle. But Basant, I didnt expect the aggression from you, for I thought by this time you must have been well aware of my sarcastic style or frustrated style as Pranab Bhattacharya(pkb2000) says. No slights meant, and please drop all mis-givings...will try to be more polite in my future posts.
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reetesh
Senior Member
Joined: 01/Sep/2006
Location: India
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Posts: 793
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Posted: 23/Sep/2006 at 2:15pm |
Kulman Ji,
I like the way you narrate these real life stories. Good keep it up.
Point No. 5,9 are two points where I will strongly disagree but everyone has his own way of doing things.
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When going gets tough, that’s when tough (people) gets going.
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reetesh
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Joined: 01/Sep/2006
Location: India
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Posts: 793
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Posted: 23/Sep/2006 at 2:27pm |
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Most of us dont know the advantages of long term investing and very scared about market fall but I personally like market which does not rise or make big moves on daily basis and have periodic fall (I am getting scared of the way market is moving again, I think we must fasten our belt something and someone will give(n)) because investor with cash will always use those opportunity to buy. "Investment made during BEAR market will give you biggest return" We all say we are investors but none of us have INVESTOR TEMPERAMENT not long term anyway.
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When going gets tough, that’s when tough (people) gets going.
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