Self Learning continues - Paid significant tuition fees this time
Above was in Oct 22…6 months hence, in between I kept adding Nykaa in very small quantities, so all this while in the fall it maintained an around 1% of my Portfolio as a “Hope” bet…only to finally make a complete exit today at loss of around 50%
It was painful. Booked loss of around 1% of portfolio…largest so far… as I am hardly a quick seller and tend to wait for company/business to recover rather than book losses…
I replaced it mostly with a dull, boring, traditional HDFC AMC (added around 51% to my already existing holding).
Also, took small exposure to new Hope bets in traditional businesses - Max India (Healthcare related) & Nelco (Satellite Communication) & added negligible quantity to Spencer Retail (Traditional Retail). I had been eyeing them since many months and they are also significantly down from their respective peaks, so made the switch.
What I learned about myself here is -
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I started my investing journey with One up on wall street by Peter Lynch - Buy what you see etc. I am glad I did that but over last decade, my mistake had been that I did not take time to read Graham’s Intelligent Investor. - Margin of Safety . Although not reading it right at beginning did help me somewhat as otherwise I would not have even looked at some companies which did really well for me - that’s probably because we do not understand complete essence in the book. So, with just few pages into it, I could so very well relate to the “narratives” hype etc. etc.
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I made a mistake of paying too high for an ordinary business which looked extra ordinary because of the narrative & timing of the IPO.
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Although decent time in Market prior to IPO and even later, I made mistake of getting trapped in the entire ecosystem of New Age businesses and next decade(s) belong to them blah blah.
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I sold late and kept adding on falls. Saving’s grace, did not exceed total holding at 2% of portfolio by cost.
Conclusion and Oath:
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Never ever again fall for any “Narratives” , “New businesses/New Age companies” or any other hype/ideas/wave of change.
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They may do well but it will not be a cakewalk.
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Opportunities will be immense for incumbents as well.
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No wave of change would go in straight line whatever be the narrative
Precisely that’s why chose to replace it with the most boring company from the best possible Management & sector in extreme distress at the moment - HDFC AMC.
Disclosure: Above is not a buy/sell recommendation in any of the stock names mentioned. I am invested & hence extremely biased. Post is only for academic purposes and learning. I can be wrong in all my assessments. I am not eligible to give any advice.
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