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05 July, 2007

‘LARGE’-ly Lucky?

Stock market is a complex system, many factors plays their own part in it. There are so many variables that can influence the next second of it. At times they work for us and at again work against us. That is what traders believe as luck. So basically investing is stock market is to be at a place where one does not have to change his position of because of compulsion.

But generally greed takes over after some time with a growing stock. Being confident in ones position is a way to mask his greed. It is the human nature.
Do not marry your stock” well said but investor generally do not marry his losing stock, only the slow moving stocks.
In the name of investment RSHI generally sit on their dead money hoping his money will grow at least as fast as the market. Are they at sea after investing in a good stock? At least that is true for me. I become so attached to my stock, that I can not even look beyond. Anything other looks bleak to me and I am not certain if the new stock will perform. I ignore, though aware, that if it does not perform, I can exit my position at any time.
Investing long term for small investor is a good way to increase his capital. But there is a better and safer way out, the mutual funds. They give good returns; even they beat some very good index stock over a year. The reason is simple; they are managed by professionals and have a hell lot of money (our money) in their kitty. They can effort to diversify and hence take risk. Long term investors should take recourse in mutual funds.
Really Small and Helpless Investor (RSHI) is in market to multiply their money as fast as possible by minimizing risks.

So far in this blog only Mid-cap and Small-cap stocks were discussed, as they are at a better position to grow. But in Indian market the Large-cap stocks are also as potential as Mid-caps as the market shows time and again.

Click to see the last three months rally of these Large-cap stocks

RELI: intrinsic value?
L&T: possible demerger?
BEML: diversified order book?
HDFC: merger on card?
SBI: split on card?

Are these stocks are still buy at dips?

Sensex/ Nifty are going too fast. It is too hot for RSHI to take a position more than a week even. Tread cautiously and book profit.
But if it goes even higher RSHI will miss the rally.

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