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Feb 18, 2012


Have courage to take loss.........

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Friends,
I have been writing time and again that take loss.One need to be ready to take loss.It is not all profit in market. It is not said casualy that if one makes 20% return in market then you are a good investor.
Remember one thing.There is no exit in stock market.Once you are in, you never come out.That is why I keep on saying, don't keep on putting all your money in market.It is not a good idea to put all your money, rather saving , in stock market.Keep some money in fixed deposit that one will need in bad times.Never borrow money and invest that is a very bad idea.Hope of making the loss is very bad thing to do.It never helps.If atall one wants to make up the loss, invest in bluechips which have been beaten down or pick good Cos with good management and good future.Investing in smallcaps never helps or  averaging will never help.Once the stock is down it is very hard to go up in next bull run.
Either you keep on infusing money to recover the loss or you keep on putting money to invest more.
Every new bull run has new favourite stock to give multibaggers returns.
Once a stock becomes a multibagger and starts showing loss, it is gone.Some other stocks takes its place.
If one has bought a stock at high price because of whatever earnings or great future it had and then in bear market it goes down, and it starts showing bad results , then most probably it is out of favour stock.
Why players will let investor make up the loss?Once small investors are in at high price , why they would let small investors make their money back?Had they gone mad that they would let small investor come out of it and they buy it and take a loss?...NO...that is never possible. Ye bahut hi simple bat hai .....ek bar small investor ko phasa diya hai , penny stock mian jo bahut upper gaya hai , koi story ki vajah se, usko phir se upper kyon le jayenge?Pagal kutte ne kata hai un operators ko, ki wahi stock wapas upper le jake , small investors ko nikal ne ka mauka dega?Vo tumko kyon nikale ga jis main tum high price pe leke phas chuke ho?Unless, they have interest in certain stocks, they will never take interest in it again.
Understand the market.How players play it.Our makret and even world market is played at the whims of players.Have you seen what happened on Wednesday last week?In 1 hr market showed a volatilty of 400 points and that is 125 points in nifty! It still says that our market is in hand of players and it will remain forever like that.
Always be ready to take a loss.Sell stock as soon as it goes down by 15-20% unless you are convinced about the future of the stock.
I have been saying time and again, it is not easy to make money in stock market and it is a dangerous game.Even when a master like Nemish Shah says that 2 or 3 stocks can give huge return out of 10 , then what to say of ourselves?We have seen that Nemish Shah of Enam Sec, hold Rico Auto since many years, he holds Super Spinning since many years, he holds Kar Mobiles since many years, he is holding Investment and Precision Casting since many years and still they haven't run at all, and he is the master in terms of even Rakesh Jhunjhunwala then just imagine our fate in stock market!Even Peter Lynch has said the same thing.Not all stock gives multibagger return.
Try to understand the risk in investing in Midcap and Smallcaps.......
Only 2 or 3 stocks become successful call out of 10 and that happens with the Masters who are  there in the market everyday and know the pulse of the market and what is happening in our market and internatioanl market then just imgane our fate!
One need to be ready to take the loss and sell the stock and should be able to buy something else which can give better returns.Get ready to take the loss of 50% OR  even 60% and switch over and make sure you buy a good Co.If you buy again a penny stock you will see the same fate.
Friends, I am no GOD. I also make mistakes and hence don't take my word as a final word.Pathar ki lakir nahi hai jo main likhta hun.
Loads of stocks has not performed on my given call.It is all how Co does and what market thinks.