This example will help us to understand the following things
1. The power of holding a turnaround story ie power of conviction to hold
2. Never to sell a winner
3. Retail investors can make big gains
4. And 100 baggers are real
In May 2012, I came to know about a company from the money life magazine. It appeared in the undervalued growth companies list in their microcap category. At that time the price of stock was around 8 Rs. It was going fast YOY due to turnaround. When I discussed about it with one of my friend, a veteran in the market, he reacted positively that this company was quiet known about 10-15 years back. But nobody bothered as this was operating a sector wjich was out of flavour long back. With this background I bought few thousand shares.
Now for few months the share traded in the same range but the company continue to appear in the list of money life. As the stock is showing sideways movement I really stopped tracking it daily. Instead start searching for other avenues. But this company remained in my portfolio.
After about 16 months, I observed that I have got a 100% return stock as it was trading around 18 Rs. I was happy and sad that I could have bought more. But due to anchoring to my purchase price I avoided the addition. Instead I started to think of selling it. But my laziness came to rescue. My hunt for some multibagger continued ignoring the stock in my own portfolio.
The stock continue to appear in the list with many other companies of original list of money life.
Fast forward...
In Jan 2014 the stock was trading around 40. Now it became a 5 bagger for me. Still I was hunting for multibagger going through mmb, blogs, magzines etc. As of Feb 14 nobody bothered to talk about this company. On April 14 when money life launched its new paid subscription of small cap it appeared in their list along with some good names. The stock was trading around 60 Rs. Now I added few hundreds again, after it became a 8 bagger for me already. Every body was speculating that if new government with new prime minister win the election, the sector in which this company operates will get a boost as this sector is one of the biggest employment generator. Few analyst indicated that this will be next sector which will lead the next bull market.
In Dec 14 the share was trading around 320 Rs. I was happy to identify a 40 bagger and sold most part of my holding, retaining only few hundred shares. Everyone in my circle congratulated me for this achievement. I stopped tracking the company as it was only tiny part of my portfolio.
Last month in July 14 I observed that it is trading around 720 Rs. I got excited knowing that it become a 90 bagger and 12 bagger from my first and second purchase respectively. I wondered whether to become happy or sad as cashed out at around 320 because of profit booking without observing the fundamental which remained strong and the company continues to perform well.
Now yesterday's closing price was 910, after touching a high of 1030. That makes it a 120 bagger in approximately 40 months from my initial purchase. Though I missed a massive wealth creation but learned a few things and got a hope the 100 baggers were real in a developing country like India. Last 7 years had given us lot of 100 baggers, if we'd had belived in ourself and bought and hold on.
I will continue to hold my balance shares of this gem named Indocount, which had put a stamp again that retail investors can find multibaggers, 100 baggers. Salute to Peter Lynch who first publicised the idea through his wonderful book "One Up On Wall Street".
1. The power of holding a turnaround story ie power of conviction to hold
2. Never to sell a winner
3. Retail investors can make big gains
4. And 100 baggers are real
In May 2012, I came to know about a company from the money life magazine. It appeared in the undervalued growth companies list in their microcap category. At that time the price of stock was around 8 Rs. It was going fast YOY due to turnaround. When I discussed about it with one of my friend, a veteran in the market, he reacted positively that this company was quiet known about 10-15 years back. But nobody bothered as this was operating a sector wjich was out of flavour long back. With this background I bought few thousand shares.
Now for few months the share traded in the same range but the company continue to appear in the list of money life. As the stock is showing sideways movement I really stopped tracking it daily. Instead start searching for other avenues. But this company remained in my portfolio.
After about 16 months, I observed that I have got a 100% return stock as it was trading around 18 Rs. I was happy and sad that I could have bought more. But due to anchoring to my purchase price I avoided the addition. Instead I started to think of selling it. But my laziness came to rescue. My hunt for some multibagger continued ignoring the stock in my own portfolio.
The stock continue to appear in the list with many other companies of original list of money life.
Fast forward...
In Jan 2014 the stock was trading around 40. Now it became a 5 bagger for me. Still I was hunting for multibagger going through mmb, blogs, magzines etc. As of Feb 14 nobody bothered to talk about this company. On April 14 when money life launched its new paid subscription of small cap it appeared in their list along with some good names. The stock was trading around 60 Rs. Now I added few hundreds again, after it became a 8 bagger for me already. Every body was speculating that if new government with new prime minister win the election, the sector in which this company operates will get a boost as this sector is one of the biggest employment generator. Few analyst indicated that this will be next sector which will lead the next bull market.
In Dec 14 the share was trading around 320 Rs. I was happy to identify a 40 bagger and sold most part of my holding, retaining only few hundred shares. Everyone in my circle congratulated me for this achievement. I stopped tracking the company as it was only tiny part of my portfolio.
Last month in July 14 I observed that it is trading around 720 Rs. I got excited knowing that it become a 90 bagger and 12 bagger from my first and second purchase respectively. I wondered whether to become happy or sad as cashed out at around 320 because of profit booking without observing the fundamental which remained strong and the company continues to perform well.
Now yesterday's closing price was 910, after touching a high of 1030. That makes it a 120 bagger in approximately 40 months from my initial purchase. Though I missed a massive wealth creation but learned a few things and got a hope the 100 baggers were real in a developing country like India. Last 7 years had given us lot of 100 baggers, if we'd had belived in ourself and bought and hold on.
I will continue to hold my balance shares of this gem named Indocount, which had put a stamp again that retail investors can find multibaggers, 100 baggers. Salute to Peter Lynch who first publicised the idea through his wonderful book "One Up On Wall Street".
No comments:
Post a Comment