Most people sell the stocks that have risen while they are unable to sell the losers.
My besetting sin is entirely different. I research a stock and buy it, but quite often I lose faith in it if it falls or even when it meanders along. I start questioning my judgment. One example is West Coast Paper, which to me appears one of the cheapest stocks. When it did not do much, I started asking myself, “Are the days of paper over?”. I may look back at my decision in future and regret.
Similarly, I bought SKM Egg Products recently, as it seemed to me quite cheap in FMCG sector. Then the promoter sold some equity. And alongwith some other investors on Moneycontrol, I also wondered, “Should I keep a stock if the promoter himself is selling?” Within 20 days the stock rose by 20%.
Similarly, some months back I had scoured the list of shares at their 52 week low, and found PCBL. I bought it. Later I bought some for my daughter too. I again lost faith in my research because while the tyre shares were rising, it was not. So I sold it. Luckily I don’t tinker with my daughter’s portfolio. So, now it is 278 from 169.
My selling C G Power which I had bought cheap will rile me for a long time.
So, what lesson do we draw?
Unfortunately, I am unable to draw any lesson because one buys other shares and in a bull market the portfolio easily does well.
I keep reading about investors keeping their faith in a stock which keeps falling and then is stagnant for several years. My doubt is, need we wait for the Pardesi to return, like the heroines of the old films did, till our hair is gray? If the stock is down, shouldn’t we take another look at the company? Why wait at the platform when faster trains one could board keep going by? May be, I can enter the stock again later, when it inspires more confidence?
The meme is a light reflection on the fact that we really don’t reflect on our strategy till we are doing well.
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