Posted by:  knair on ( 03-Jul-08 17:12 )
| | | Price : BSE: Rs 33.35 ( -8.38 % ), NSE: Rs. 33.35 ( -8.50 % ) | dineshsahay:
This refers to your reply to BUBBU64 and a reply given by RGUNTAPA.
While your view is in right perspective, bubbu64 has also been correct in what he said. To that matter what rguntapa too.
We have been given lessons by EXPERTS and PUNDITS how a long term investor should act. Technically and fundamentally they all may have been correct in what they have been teaching. But pratically how things are moving? Let us look into some aspects:
1) When RIL was moving from 2000 level, almost everybody advised us to get in as it is going to touch the sky (becoz of so mny activities in which this co. was involved). People started buying it even after it crossed 3000 level. Most of the experts advised us to stay with it and accumulate more. No doubt that RIL is the biggi and mover of the index, the top most quality stock. But a simple question - where are those people who accumulated RIL from 2200 to 3200 level?
2) Experts may say - don`t worry, the future is good. A LT investor should not see day to day fluctuations of the mkt. They should remain invested and to add when the stock is available at cheap price. (Cheap price means that it may go further down from todays price and may reach (may be) 1500 level or near to it. Another question - when we get it at 1500 it may be good but what about the 3000 we paid? Dead money?
3) OK, let us presume that we will get RIL at 1500 and the mkt remains stagnated for a long period and RIL goes to 16 or 1800 and no more. Experts may say - a LT investor should have patience.
He should avg it. One more question - when the money invested is not growing but reducing year after year, then what patience is going to pay?
4) No doubt that RIL is too good and making profit. But if the money invested is lying unmoved for a long time, what a long term investor is asked to do? Book loss and get out or remain invested for further extended period till it gets 5000 level to pick up gains?
All put together in 1 to 4 is as under:
One Mr Ram bought 10 RIL at 2000 (Rs.20000). He added 10 more at 3000 (Rs.30000). Then when RIL came down to 1500 he added 30 (Rs.45000). Total investment 95000.
Mkt not moved. After 3 yrs it moved to 1900 and and his total period of investment is 4 yrs. He lost patience and sold his 50 shares at 1900 and took his dead capital of 95000 back. What he earned for such a long time? What that money if he had put it in bank FD?
These may be silly questions from an innocent retail investor. Considering all the factors discussed here, can any one help the poor fellow?
knair |
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