Buying is more important than Selling!

Discussion in 'Professional Video Production' started by ronald, Jun 10, 2008.

  1. ronald

    ronald Guest

    Buying is more important than Selling!

    Most investors tend to crib when the market is going down. I find this
    very strange, because most of the money that I make is made when the
    markets go down and I buy.

    When I buy a stock cheap, I am keeping my downside limited and am
    leaving more room for the upside. One of the most important things
    about getting substantial returns on your investments is not really
    selling but buying.

    Several people pay undue importance on selling at the right time, but
    fail to give importance to buying. For example let us say you invested
    in Unitech in 2002. Would that decision have more value or would the
    decision to sell in 2007 or 2008 have more value? Yes, there might be
    some minor differences in the stock price between 2007 and 2008, but
    most of the money would have been made when you bought into Unitech
    after finding out about their huge land bank which was relatively
    unknown at that time. Every Rs 10,000 put at that time would be worth
    over Rs 1 crore today.

    If you have done your buying wisely, selling would not really be
    something to think about. Warren Buffett had once said that investing
    is simple but not easy. No matter how much people are told about
    buying when markets are going down, they still will continue to panic.
    No matter how much people are told to stay balanced and not rejoice
    because markets are going up, they will still continue to rejoice
    unnecessarily.

    For example a few days ago when the markets were going down, I bought
    more into a small company which will benefit from India’s huge
    infrastructure demand. It is much cheaper than what it was say two
    weeks ago and that is why I bought into it more. I bought into it
    simply because of fundamentals and the huge business opportunity
    available. Now the irony is that when such companies are available at
    cheap prices, very few people will look at them. But when after a few
    years they quote at prices several times of today, people will rush
    behind them and say things like Rakesh Jhunjhunwala holds it, let us
    buy into it. They forget that Rakesh Jhunjhunwala bought the stock
    much cheaper than what they are buying it at. Once again does it mean
    that since I bought it today, it won’t go down tomorrow? Of course
    not, it can certainly go down or go up in terms of its stock price,
    but what we can do is try to make sure that we are investing in a
    company whose fundamentals we understand.

    Over the years after making mistakes I have learnt a few basic
    principles which even though might sound simple are not always easy.
    One of them is that it is best to buy when every analyst and reporter
    is talking about doom.

    We do have challenging time with crude oil moving up as well as
    inflation all across the world charging ahead. The Indian rupee has
    depreciated quite fast and lots of our foreign exchange is being used
    to fund the rising oil bill. But the world has been through more
    difficult phases and this too shall pass.

    A few sectors will surely be affected by this, however there are
    several sectors which don’t have a lot to do with all this. Why not
    look at such sectors? Domestic consumption is rising and I personally
    like companies which can benefit from domestic growth.

    Happy buying and wealth creation!

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    ronald, Jun 10, 2008
    #1
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  2. ronald

    Rick Merrill Guest

    ....

    Horse crap. For every buyer there is a seller.
    Hell, you can even sell stuff you don't own!
     
    Rick Merrill, Jun 10, 2008
    #2
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