Dear Readers,
The Market is swinging in an annoying manner on global cues and subsequent profit booking ... It is continuously testing the patience of investor community by last few sessions. I wish to say, please don’t be panic on this flux and treat the instance as a simple self balancing tremble by the market prior to stand solid. History says, it is a common episode with every developing market/economy/country. Instead of getting mystified, long term investors have to exploit this opportunity by accumulating good scrips in better valuations, but in small batches.
This Post is primarily intended to my clients who are subscribing the Portfolio Advisory Services. The recent fluctuations in the indices put few of them in bit confusions and are reflecting in their mails/calls. I have received few mails also enquiring the relevant strategy at such occasions. I am using this venue to clarify my stance towards the queries.
I usually specify the buy range for every recommended scrips to my clients. Reaching that price range figures are associated to various stock specific fundamental/technical issues as well as the then market conditions. Try to enter at the lower price levels at your best and having a stock at the cheapest rate is simply your smartness. Buying at 1 or 2% higher from the upper levels of suggested buy ranges does not make any impact as we are likely to invest for few years rather than trading. I would like to refer the following precious post of my friend Mr. Viral Rajnikant Dholakia as a better guideline for the buying strategy in such market conditions. The great accumulation theory in the following link will always work better for you and especially in the ongoing spell.
http://stock-mkts.blogspot.com/2009/03/strategy-for-investment.html
The Market is swinging in an annoying manner on global cues and subsequent profit booking ... It is continuously testing the patience of investor community by last few sessions. I wish to say, please don’t be panic on this flux and treat the instance as a simple self balancing tremble by the market prior to stand solid. History says, it is a common episode with every developing market/economy/country. Instead of getting mystified, long term investors have to exploit this opportunity by accumulating good scrips in better valuations, but in small batches.
This Post is primarily intended to my clients who are subscribing the Portfolio Advisory Services. The recent fluctuations in the indices put few of them in bit confusions and are reflecting in their mails/calls. I have received few mails also enquiring the relevant strategy at such occasions. I am using this venue to clarify my stance towards the queries.
I usually specify the buy range for every recommended scrips to my clients. Reaching that price range figures are associated to various stock specific fundamental/technical issues as well as the then market conditions. Try to enter at the lower price levels at your best and having a stock at the cheapest rate is simply your smartness. Buying at 1 or 2% higher from the upper levels of suggested buy ranges does not make any impact as we are likely to invest for few years rather than trading. I would like to refer the following precious post of my friend Mr. Viral Rajnikant Dholakia as a better guideline for the buying strategy in such market conditions. The great accumulation theory in the following link will always work better for you and especially in the ongoing spell.
http://stock-mkts.blogspot.com/2009/03/strategy-for-investment.html
I have placed a screen shot of Portfolio Management Screen maintained in moneycontrol.com by one of my small scale investor client from Pune, Mr Kedar Raghunath. He is a student at his 23 and a fresher to market. He is investing by the savings from his pocket money. Just see how he is brilliantly accumulating a stock with his limited fund levels.
The Rupee Cost Averaging is an established theory and you can apply this tactic without any hesitation on the scrips recommended to you during the course of this service. Don’t get panic on abrupt falls on any of the scrip as I have firm reasons for that. It is a matter of time and you have to make use of every such opportunity. I am closely watching the market conditions and the fluctuations happening on each and every recommended scrips. As a rule, I recommend stocks to my clients only after exhaustive homework by considering various fundamental aspects as well as the future prospects of the company. Nearly all of these companies must have eminence in their respective fields and their growth potentials must be in the pink. Recommending a stock to my client means, I am keeping a robust faith on the Company/Management and the stock is rationally competent to deliver superior returns in the long run. Such stocks can falls too with the collective emotions, but always recovers faster when the trend favors. The every moment between both of these points, fall and recovery is yours and you have to use at its best according to your cash reserves.
Another sort of stocks, few small caps including Pennies are excluded from the above category, which may have not adequate histories to track or may be with thin technicals. Still, I suggest these stocks after the same amount of exertion, by analyzing the industry perception and available statistics. The age factor and risk tolerance level of the client is an important aspect which influences the small cap/penny recommendations. If you are a person above 50, I barely recommend you any penny stock unless you asked for. Penny stocks can be turns to massive multibaggers or may bestow you good fortunes, but equally disastrous. Please refer the following links for a better picture on my previous recommendations.
http://www.stockinfos.in/2009/04/penny-passion-part-i.html
http://www.stockinfos.in/2009/12/historic-year-2009.html
http://www.stockinfos.in/2009/09/review-on-my-recommendations.html
Let me conclude this post here as I hope, I have answered collectively to the queries.
God Father Buffet says “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it”.
Shabu Thachat – sthachat@gmail.com
The Rupee Cost Averaging is an established theory and you can apply this tactic without any hesitation on the scrips recommended to you during the course of this service. Don’t get panic on abrupt falls on any of the scrip as I have firm reasons for that. It is a matter of time and you have to make use of every such opportunity. I am closely watching the market conditions and the fluctuations happening on each and every recommended scrips. As a rule, I recommend stocks to my clients only after exhaustive homework by considering various fundamental aspects as well as the future prospects of the company. Nearly all of these companies must have eminence in their respective fields and their growth potentials must be in the pink. Recommending a stock to my client means, I am keeping a robust faith on the Company/Management and the stock is rationally competent to deliver superior returns in the long run. Such stocks can falls too with the collective emotions, but always recovers faster when the trend favors. The every moment between both of these points, fall and recovery is yours and you have to use at its best according to your cash reserves.
Another sort of stocks, few small caps including Pennies are excluded from the above category, which may have not adequate histories to track or may be with thin technicals. Still, I suggest these stocks after the same amount of exertion, by analyzing the industry perception and available statistics. The age factor and risk tolerance level of the client is an important aspect which influences the small cap/penny recommendations. If you are a person above 50, I barely recommend you any penny stock unless you asked for. Penny stocks can be turns to massive multibaggers or may bestow you good fortunes, but equally disastrous. Please refer the following links for a better picture on my previous recommendations.
http://www.stockinfos.in/2009/04/penny-passion-part-i.html
http://www.stockinfos.in/2009/12/historic-year-2009.html
http://www.stockinfos.in/2009/09/review-on-my-recommendations.html
Let me conclude this post here as I hope, I have answered collectively to the queries.
God Father Buffet says “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it”.
Shabu Thachat – sthachat@gmail.com
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Another nice post Shabu Sir !! "Be cool" is exact words to remember when we start seeing our investing going other way round..:)
ReplyDeleteI just want to add few golden statements to sum it all on how to look the market or the stock we hold .. :-)
"Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years" - Warren Buffett
"This market right now is moving on nothing more than emotions. Guess what? It almost always moves on emotions" - David Bach
Regards
Venkat
Dear Shabu,
ReplyDeleteIt's a privilege that you found one of my old articles worth referring and making its presence felt on your wonderful blog. Thank you for reminding us that some strategies of buying/selling are ever-green and could be intelligently used in various different market conditions.
Sir,
ReplyDeleteAccording to me, if we have deep knowledge about our stocks, we can buy them at lower levels and if we can control our greed, we can book partial profits at higher levels. We should invest with long term view. But it is not possible to hold all stocks for 5-10 years. So it is important to book partial or full profits in stocks which give good returns in short term. If a stock don't go down after we sell, then it is better to forget that stock because there are lot of other good stocks available at cheaper rates. We should not worry about market going down because even when market going down some of our portfolio stocks goes up. Stocks like Sharon Bio-Medicine made new 52 weeks high when market was going down.
Hi Shabu, Another nice article indeed...one other point to note is that the brokerage charges while acquiring in small quantities as some brokers charge flat amount if the transaction amount is less than a certain minimum amount which would make that acquisition cost higher...a very nice article once again....
ReplyDeleteDear friends,
ReplyDeleteThanking you all for the encouraging comments.
Jagadeesh sir's point is right. But I think it is difficult for students to keep money in hand because friends will compel them to spend money for parties. I think it is better to spend Rs. 30 or so for brockerage than to spend Rs. 500 or so at pub or bar.
ReplyDelete