Beauty of the market is both buyer and seller thinks they are acting correct. Whenever you want to sell stock because of its price down think like "You don't have that particular company shares in your demat account, you know the company business very well and you have enough money".Now what is your decisions? Obviously in most of the cases its BUY.
So the same YOU acts in different ways depends on different circumstances.

There are different reasons for the fall of the stock price. Mostly its based on macro factors. Remember what happened in September 1st week. All shares were down by 20 to 30% because of global cues. If u had followed stop loss obviously u had to sell most of your stocks. But after one month market almost recovered. So you would have lost money if u followed stop loss.

In my opinion instead of following stop loss we must track the factors and if factors belongs to that particular company then we must take decision accordingly.

i am not an expert on sugar but being cyclical a change an uptrend in the cycle will definitely give good returns.
BUT i seriously doubt that the returns will be similar to those as in previous cycle like the one in 2005-06.
The sugar cycle is not purely market based and is severely distorted by the government due to fixing of very high cane prices.
even if there is a sharp rise in sugar price, a part of the cash flow will go in paying off the debts to the farmers. At present the total debt owed by sugar industry is about 12000 Cr +
Also the govt in all likelihood will remove the export subsidy and other incentives given to sugar industry in such case.
The farmers may start demanding higher cane prices which their unions have been doing anyway.

Still since the sugar stocks are quoting at historical lows , the returns can be exciting depending on the jump in the sugar prices.

Disc : Invested in Kesar ent and Triveni eng

rakesh junjunwala is invested in the name of rare enterprises

I have been buying (since the last 2 years) EID Parry and DCM Shriram on dips (and boy, do they dip!!). The attraction is a) Sugar Business in both cases is only 30-40% of their total business b)their other business (Coromandel and Bioseeds, in the case of EID Parry, and Fertilizers, Seeds, Alkali and Plastics in the case of DCM Shriram) are extremely well run and well regarded c)debt levels are quite reasonable.

My logic is (was) that I have no control over sugar prices. However, the history of Sugar Prices has been that every few years, these companies have a real blockbuster year. However, even in bad years, these two companies don't go into a loss, their debt remains under control, and they give dividends. So there is no risk to survival. Frankly, if sugar prices were to stay at current levels for a couple more years, than Shree Renuka iwill not the only one in deep trouble.

The flip side is that you don't get as much of a bounce if Sugar Prices go crazy. But that is the price I am willing to pay for Margin of Safety.