Stocks for the long and short term portfolio

[victory]

Another stock worth a look: Wockhardt. CMP 890

It will be super cheap in the band of:

Rs. 250 to 400


The only reason for purchasing this stock is because its upswings are likely to be monstrous.
The company has shown resilience in the past. Has seen many downs and a few ups. I hope these guys have a plan for future.

@362 - do you suggest us to wait still further downside.......

 

[jamit_05]

Balrampur chini is vry much near to ur reco price - am gonna take a plunge - any advise

Make no mistake, this is a big opportunity, but to gulp it down one must have a determined approach. Wavering mid way is not an option.

To further affirm our resolves lets look at what lies ahead of us, if we chose to invest in BC.

1) This stock has a tendency to be subdued for prolonged periods. So do not go in with expectations. The mind should think

"I am doing the right thing, it is a good company. The return will come whenever it has to."

2) The price can go further down to Rs.9. But, that is not a problem because we have only Rs.21 on the way down. On the profit side, we may clock in Rs.150 plus whenever the sector becomes hot... 3yrs or 5.

Now read the following second very important part of the strategy:

Strategy to Deploy Cash into Balrampur Chini

1) Do not invest more than 5% of your entire investment capacity in any one stock. Think, what if it does belly up. It can happen... and it will happen. So plan for it.

2) If that 5% comes down to say 5 Lakhs. Put this money into Liquid Debt Fund. It will give a return of 1% every month. Put that 1% into BC religiously. (Yes, SIP!). And when the stock crashes on a given day... take 10% Principal out of the Debt Fund and buy More.

The above method will keep check on several levels. And give the investor a major advantage. If the stock runs away, don't worry. There will be others. Don't chase the price (it is one big mistake investors make).

 

[jamit_05]

Amit, do you smell the killer price around the corner

Nope, will have to wait longer. Around 1 more year. Patience is the investors best friend.

 

[jamit_05]

@362 - do you suggest us to wait still further downside.......

Yes, further downside is almost certain. But, I am somewhat shaky on the way Wockhardt responded to the ban.

Give this stock a pass for now. We will see future quarterly reports to re-rate this company. Price is secondary, quality is first.

 

[Mr.G]

Hello Friends,
I am working as a clerk in a public sector bank. I am 43, married and my wife is also a Bank clerk. We have a ten year old daughter. We are settled at Trichur in Kerala

I started investing in 1988.My first investment was in IPO of Ispat Profiles and Esab India. I got allotment of 200 Ispat Profiles and 100 Esab. Sold Ispat profiles at 17/- immediately on listing and Esab at 36 within 3 months. Cool profit of 4000/- .Then my salary was 1200 pm and Sensex just crossed 800 points. That night I had dinner at Windsor Manor Sheraton.

Those were the days of CCI (Controller of capital issues, many new investors may not know) and all IPO s were at par. I was making multiple applications for all good issues and book profit immediately on listing.

Later CCI was abolished, and market pricing started .Mardia chemicals was the first company to issue shares at 90 Rs. People started losing on IPOs. And many issues undersubscribed. Infosys was firm allotment. All the applied people got allotment. I had 500 original allotted shares of Infosys. All shares were sold when it doubled within a fortnight. If I didn�t sell it, now including bonus shares it is worth many crores. �Mother of All Losses�

When IPO s became less attractive, I started playing secondary market. Did all sort of short time speculation and made a lot of money during the Harshad Mehta Bull Run.
Then lost almost everything on the Big Bulls fall.

A lot of changes took place after that. NSE was established. Screen based trading replaced the open outcry system where the brokers shouted and auctioned the shares on trading floor . Investing became transparent and now you can trade through the net sitting comfortably in your drawing room.

I was desperate and depressed after the wipeout, and quit the market for a year or so. During the period I happened to read some books on stock market and learned the importance of proper research in investing. I was acting blindly on hot tips. When I wanted to buy a 1200 worth mixer-grinder I consulted many friends and checked the various brands and their prices. But I was committing 25000 without even knowing what the company is making.

I started investing in secondary market again. This time doing research about the companies where I invest. Slowly I developed my own style of stock picking which I improve upon constantly. I have done so many things foolish and lost money in the market. But I learned something from those mistakes. On an average I could get a return of around 25% which is not bad I think. I have pulled out money from my investment to purchase a house plot and to construct a small house.



From my experience what I learned are

1. Never speculate
2. Never Play the market with borrowed money
3. Market will( in the looooong term )always move up
4. Nobody can predict the direction in the short term
5. Don�t listen to experts and their tips. Must do our own research
6. Invest only what you can afford to lose
7. Open mindedness and willingness to admit and correct mistake is a must
8. Always play for a meaningful stake
9. Invest in individual stocks .Market is not relevant. You can find some stocks moving up in a bear market and some falling in bull market.
10. A stock qualifies either as a buy or a sell. Hold a share only if it qualifies as a buy.
11. If you cant find any undervalued shares ,leave the market and sit pretty on cash
12. You need not be correct all the time. 5 out of 10 is enough to beat the market
13 When.the guys who approached you for tips starts giving you tips, it is time to
Worry and get out.
14. Fundamentals move a stock in the long run. In short term it may move in the opposite direction.

Now let me continue the story. I did my own research and picked up stocks. All were fundamentally sound companies. But most of them did not appreciate as I expected. After holding for a long period I lost patience and sold out. The very next day they started moving up

I learned that in order to move up, apart from fundamentals market sentiment is also important. Market should also recognize the value of stocks you own. It may take time and my limited funds are locked up in them without any return till then.

So I identified the shares but didn�t buy till it started moving up. This dramatically improved my performance as an investor. I was using financial analysis only but decided to learn TA to time the market. A combination of TA and FA, I believe can give you better returns. Now I am learning the ABC of TA from Traderji.

Here is my method of investing (May change again)

Basic Strategies

1. I invest for a period of 6 months ie I give the company two quarters to prove itself. If it is not showing improved financial results I sell




2. My target is 20% appreciation in 6 months. I review it after six months and will only hold if I believe it can appreciate 20% from the current level. If it gains 20% before six months, I will do the research again and hold only if I am confident that it will gain 20% from the new price level or else I will sell

3. When in doubt get out. I constantly watch the invested company. Any adverse development should be researched. If I think some factors will affect its bottom line
adversely I get out (Even at a loss)

4. Always remain invested .never skip watching the market .If you skip your routine morning walk for a week, chances are that you will discontinue it for ever. So be active in the market always

5. I limit my portfolio to a maximum of 10 stocks. Very difficult to follow more than that

6. I fix and earmark an affordable amount for investing in stock. Whenever my portfolio value exceeds the limit, I sell and pullout the excess money from the market.(don�t sell winners)

For example I had 100000 in index stocks. When the index went up to 12000 from 8000 my portfolio appreciated 50% and I pulled out that 50000.Now index fell 25% from the peak to 9000. And my portfolio is now 75000+ the 50000 which I withdrew. Even after the crash I am up 25 %

7. Be prepared to accept losses. Profit and loss are two sides of the same coin. Do your homework and try to shift the odds in your favour.

8. I prefer shares priced less than Rs 200/ as I am looking for % gains. Small companies make big moves.

9.I do not bother about the number of shares I buy. I invest an amount say 10k,25k etc. and always play for a meaningful stake.

10. I keep away from derivatives and don�t know how to sell short. And no stop losses so far
11.I Consider investing as a hobby and I enjoy it.


Dear friends, I have just started learning and a long way to go. I request the Traderji family members to post their stock picking ideas here so that we can learn together.

I will post the method which I follow to select the stocks for investing on next Sunday.

Regards
Niranjanam

I found this post in the archives. This guy got it all sorted out. Wished to share it again with everyone.

 

[jamit_05]

2. My target is 20% appreciation in 6 months. I review it after six months and will only hold if I believe it can appreciate 20% from the current level. If it gains 20% before six months, I will do the research again and hold only if I am confident that it will gain 20% from the new price level or else I will sell

1) An objective of gaining 20% in 6 months is a good theme, but does not apply anymore. Sure one can buy stocks at current time and hope for a gain... but the market is equally likely to fall. Days of one-sided Teji are over!

2) Exiting in 6 months is more like trading. Purchasing Shares instead of Future Lot doesn't make it Investment.

3) Having ones entire portfolio in Mid-Cap is a risky bet; not a sane investment strategy. Several good mid-caps have reached 2008 Lows in this fall from 6200 to 5400. Imagine what will happen to them in the next round, which is from 5400 to 4500!

To each his own really. All I say is do not make investments with sky-high expectations like of 40% annually. Even Warren Buffet won't make the cut. Bershire Hathway earned 18% last year and held a big celebration in Omaha! His firm beat most Fund Houses in entire American market....

Be mature. Clearly separate Trading from Investment in your minds.

 

[Mr.G]

1) An objective of gaining 20% in 6 months is a good theme, but does not apply anymore. Sure one can buy stocks at current time and hope for a gain... but the market is equally likely to fall. Days of one-sided Teji are over!

2) Exiting in 6 months is more like trading. Purchasing Shares instead of Future Lot doesn't make it Investment.

3) Having ones entire portfolio in Mid-Cap is a risky bet; not a sane investment strategy. Several good mid-caps have reached 2008 Lows in this fall from 6200 to 5400. Imagine what will happen to them in the next round, which is from 5400 to 4500!

To each his own really. All I say is do not make investments with sky-high expectations like of 40% annually. Even Warren Buffet won't make the cut. Bershire Hathway earned 18% last year and held a big celebration in Omaha! His firm beat most Fund Houses in entire American market....

Be mature. Clearly separate Trading from Investment in your minds.

Same here! You know sometimes I'm not even concerned with my capital gains. I just want my dividend returns to increase every year.

 

[aj4567]

Mate,
Excellent thread for new investor like me yet to make the first trade...

Would you recommend MARICO for the long term..

What would your recommended buy price for HUL and ITC...

any other good stocks you can think about in the fmcg sector

 

[manojborle]

image hosting picasa

What about this ?
Is it okay to invest here based on this wolfe wave ?

 

[Mr.G]

Mate,
Excellent thread for new investor like me yet to make the first trade...

Would you recommend MARICO for the long term..

What would your recommended buy price for HUL and ITC...

any other good stocks you can think about in the fmcg sector

Please check older posts for your query.