Familiarity Bias is difficult to get over with. We tend to develop unfounded liking and affection towards company, its products and promoters when we study the company. Thats natural. For that very reason, you should have one eye on the price chart also, while studying fundamentals. I love Astral and use its products wherever possible and recommend too. In recent investors interaction, I remember , promoter saying that stay with Astral for next 10 years and then see the results. I was emotional about the company and couldnt sell it even though it was slipping below 40 week EMA, but somehow I managed to overcome the emotional bias and sold it recently. May be I can go wrong. But I know that company well, I can anytime buy it when it comes in stage 2.
Most important is, I am totally against trading frequently, but I want to invest in fundamentally good companies who are also good on charts, thats it. This is just another and very crucial dimension to check while entering or exiting in the company, just like we check ROCE, Promoter holding, Debt levels, Just check where the stock is headed. This will make us nimble-footed.
Also , always remember, as retail, we are the last people who gets the information on fundamentals. Before us, promoters know it, analysts know it, Fund managers know it, speculators know it, …We always get the information last and most times just to fool us. So these guys who have got the information early, take steps of buying and selling and that is reflected on chart. There is no other way of knowing any fundamental info earlier than these guys , than following what happens with the chart. Thats why it becomes important. Always remember what Warren Buffet says…When dumb money acknowledges its limitations, it ceases to be dumb
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