Money management Dilemma

A question about money management I have been pondering for quite some time.

Case:
Suppose I narrow down on a growth stock X, quoting at a slightly expensive valuation ( naturally).
I have Rs 100 currently and want to invest up to Rs 1000 in it (by saving from my future salary per month-- upto 1 yr to achieve Rs 1000)
Three situations :
a.Start investing Rs 10 every month,upto 10 months and if this stock corrects down due to any reason in between, put the entire Rs 100 plus the future savings upto that point into stock X.
b.During investment of Rs 10 every month, stock appreciates further , in which case I continue with monthly SIP (OR wait for it to come again and put all the savings upto that point when stock corrects ?). Continuing SIP seems more prudent according to me.
After situation a or b
Complete investing Rs 1000 as planned every monthly as stock gradually rises towards the last instalment,then the inevitable happens. The stock collapses 50-70 % due to begining and the midst of bear market. NOW would have been the ideal time to have had invested entire Rs 1000 and more . But I dont have any surplus cash.
What to do ?


I believe in super concentration and have currently 60% of my portfolio in top 3 shares out of total 9 scripts. Target is to have 75% in top 3 stocks, so a bear market will cost me dearly.

Solutions are invited .

 

there should no fascination for any single stock, there are 1000s of stocks to choose from...if you want to invest in any stock just look at valuations, time horizon and then take a call...SIP is never a good option for individual stock , it is used for MFs and that too for a time horizon of not less than 5 years...

 

Growth company valuations are always at slight premium, but my time horizon is 20 yrs .

 

Thank Meenakshi. But I agree with Bholu now that an automated plan where money keeps getting invested (like SIP) will not give exceptional results. Automated plans are best left for mutual fund investments.

I am a Philip Fisher fan and believe in super concentration.
( Investors should put most of their money into fairly big growth stocks, Fisher maintains. How much is “most”? It could be 60 percent or even 100 percent, depending on the investor......
- Philip Fisher )

I found my solution from the "margin of safety" principle , thanks bholu !

Thank you all for your responses.

 

Can you name the stock if you do not mind ...I am really curious to know which stock can give continuous growth for 20 yrs ?

 

Hmmmm... I cannot disclose my holdings. But for your curiosity...

"Absent a lot of surprises, stocks are relatively predictable over twenty years. As to whether they're going to be higher or lower in two to three years, you might as well flip a coin to decide."
- Peter Lynch

 

Twenty years is too long a time, and it is the performance in the short term which lays the foundation for the long term, after all you want to enjoy the benefits of your investments...time is of great importance , everywhere ...but thank you for introducing me to Peter Lynch ...however I am sure he too must have rotated stocks periodically or else he could not have beaten the index so consistently...my portfolio is out there , I do not hide anything

 

I never said stick to the same stock for 20yrs unless you are satisfied with periodic progress of that stock.


"A healthy portfolio requires a regular check-up perhaps every six months or so......"
-Peter Lynch

 

I replied on the basis of your quote, which you wrote in response to my query.... and whether you or any other genius says so no sensible investor would stick to a stock if the outlook for the next few years was not promising or the valuations become unfavorable.

 

If your time horizon is 20 years and you are confident of your script, I think then you shouldn't pay attention to daily market volatility. One cannot predict the market or could say when a particular stock would go up or down. In the event of a crash where your script has fallen 50-70% then if you have extra money you could average it else you should continue to hold the script. Although your theory of concentrating your entire money in just few stocks seem risky , I suggest that if you want to maintain this strategy you should review and do a thorough analysis of the company preferably once a year to see that they are on the same growth path and nothing else has changed that could affect their profitability.