It’s been close to 6 months since I published my last post. And it feels surreal to be back writing to you folks.
These months were tumultuous, market-tested both low (15600) and high(18400), startups dried up, cryptos went from boom to bust, great nations started competing for interest rate hikes, and big tech companies fired great engineers.
Also, personally, I met with an accident and had to go under the knife. The rehabilitation is still going on, but that’s not an excuse for not writing. I want to thank many of you for your wishes which helped me overcome a tough time. And if you had encountered any misfortune during this time, I pray, you shall overcome it soon.
Sometimes when things are not going as planned, hanging on to the status quo is all you need. The same goes for the market as well.
I hope you have used the bull market plan to the best of your wisdom and having invested in both lows and highs, would be sitting on a handsome gain. If not, do read it once again.
Now time to Move on! as usual
I have got a few queries during this time, regarding how to manage stocks that are giving good profits, and also what to do with high losses where the entry was made on top and the stock is 40-50% down.
While there is no generic answer to this, as the decision depends on multiple factors including your personal finance, stock business, overall industry, etc. But I have a few pointers to help.
Identify which type of stock you are holding, an easy way is to go through this list from legendary investor Peter Lynch.
Once you identify the type of stock, reset your expectation accordingly. For example, if you have to say ITC in your portfolio, you know that it’s a slow grower, and once the cycling effect is gone, it can maximum grow in single digits.
Similarly, if you own stalwarts, like Vinati organics, you know it can be held and added to give stability to your portfolio.
Or if you have latched on to a turnaround like Bajaj corp, you know the wait can be longer but returns can be greater.
Once you know the stock, the decision to sell, or add more becomes comparatively easier.
Also, please prioritize your personal debts, loans, and life necessities over investing, since the recessionary effect can leave all of us wanting more. Time doesn’t remain the same, either good or bad. So be prepared for both.
All-time high, now what?
As per our plan, we would have invested 30% of our money in the last six months (15% each at 15600 and 18400), so basically we are still sticking to the same plan.
I know it's kind of boring, but trust me, money is made in boring times only. Euphoria mostly draws us towards getting things at a higher price, panic forces us to exit at lower prices but boring times create wealth silently.
Since the market is at an all-time high, we cannot rule out the possibility of 20400 in the near term, but there is no hurry, and no need to jump the gun, market will do things at its own pace, so let’s get along and be there with it.
I know sometimes money sitting in the bank account or the Diwali bonus, might be tempting to invest more, but there is no fun in losing money as well.
So let’s do the boring! wait it out. Remember when you are waiting, your existing investment will still grow, so no fear of missing out.
What to buy next?
This is the most interesting part of any post, everything is fine, but what to buy next?
For the last six months, due to obvious reasons, I couldn’t do much research, but some of the thesis around stocks like Bajaj corp is still intact. Do read and reflect.
Also, apart from financials and PSU, the winter is on most of the high-growth stocks like IEX and NGL. But if the business is intact, we shouldn’t worry much about it.
If prices of these get stabilized, they can turn out to be a good bet. But please watch for performances regularly. No blind faith in fallen names.
What’s new?
I am planning to start a fortnightly/monthly portfolio scanner. Since many of you send me your portfolio for opinions, I felt it will be good to share the finding with all folks.
Since I am not a professional/registered advisor, and I do not run any paid services. Please take them with a pinch of salt. Also, it will be purely for educational /informational purposes. Best, my time spent will be used and recorded and you may get a few names to double-check before putting in your money.
Hope to write more, soon!
Keep investing,
Swapnil