This article is a reminder to me that focus and conviction is important in investing. Here are the examples where I could have acted rationally but done otherwise.
Example 1 2012-13 : As mentioned in a previous article got to buy huge quantities of Indo Count at around 7-8 Rs only to offload major part before the major gain happened. It's a 120 bagger. Here conviction was there but focus was not. So diverted the funds elsewhere to achieve meagre returns.
Example 2 2013-14 : There was a unheard microcap company called Arrow Coated which was bought at around 8 Rs. Though the quantity was not that huge but could had impacted my portfolio had I continued to hold it. Here also I sold at meagre profit. And bought again back at higher levels. And then acted like a trader and accumulated losses. Few I'm still holding which was again bought at higher levels. So some times exactly opposite to one want and believe. It has become a 50 bagger since my first purchase.
Example 3 2014-15 : Yes 2015. Everybody knows pharma is a safe bet. On searching for a value buy came across another under research company named Mangalam Drugs. Bought heavily at around 11-12 Rs. And as there's strong conviction hold for next few months and sold a major portion at 2.5 times. At on point felt happy with extraordinary gain. Diverted the funds to buy another stock (investor ??). Within next few months it became another 4 bagger from my selling price. It is a 10 bagger now from my original purchase.
These were the few examples where I didn't ride the full even after identifying right companies quite early. Though can self boast to identify the first and third company when everybody ignored them. But lack of focus and some what trader approach for quick gain killed the investor behaviour.
Though all these incidents looks natural in hindsight some lessons can be learned:-
1. Be focused and work in circle of competence.
2. Back you conviction once you convinced.
3. Remember that one is investor.
4. Invest only that money which one don't required for next few years.
5. Best stock to buy is mostly what you're already holding if one follow the above points.
6. Avoid noise.
7. Understand ones behaviour and create a check mechanism to behave rationally. I'm still searching for one:)
Example 1 2012-13 : As mentioned in a previous article got to buy huge quantities of Indo Count at around 7-8 Rs only to offload major part before the major gain happened. It's a 120 bagger. Here conviction was there but focus was not. So diverted the funds elsewhere to achieve meagre returns.
Example 2 2013-14 : There was a unheard microcap company called Arrow Coated which was bought at around 8 Rs. Though the quantity was not that huge but could had impacted my portfolio had I continued to hold it. Here also I sold at meagre profit. And bought again back at higher levels. And then acted like a trader and accumulated losses. Few I'm still holding which was again bought at higher levels. So some times exactly opposite to one want and believe. It has become a 50 bagger since my first purchase.
Example 3 2014-15 : Yes 2015. Everybody knows pharma is a safe bet. On searching for a value buy came across another under research company named Mangalam Drugs. Bought heavily at around 11-12 Rs. And as there's strong conviction hold for next few months and sold a major portion at 2.5 times. At on point felt happy with extraordinary gain. Diverted the funds to buy another stock (investor ??). Within next few months it became another 4 bagger from my selling price. It is a 10 bagger now from my original purchase.
These were the few examples where I didn't ride the full even after identifying right companies quite early. Though can self boast to identify the first and third company when everybody ignored them. But lack of focus and some what trader approach for quick gain killed the investor behaviour.
Though all these incidents looks natural in hindsight some lessons can be learned:-
1. Be focused and work in circle of competence.
2. Back you conviction once you convinced.
3. Remember that one is investor.
4. Invest only that money which one don't required for next few years.
5. Best stock to buy is mostly what you're already holding if one follow the above points.
6. Avoid noise.
7. Understand ones behaviour and create a check mechanism to behave rationally. I'm still searching for one:)
