Power of Holding Power - Personal story

investor1984

investor1984

Manager - Equity Analytics

Posts : 213
Equity Stars : 5418
Reputation : 36
Join date : 2011-01-29

About one month ago i bought some ALUF, I did no research , I had no idea i just bought it on a rumor, rumour was group of people were pushing it... Well news seems to be ok, it gained few rupees after i bough it.... Then the unthinkable happened....
Directors wrote to CSE saying they are in serious position of lack of capital... Big fish just exited, i was just left with the going down, going south ALUF... I try to average buying more, any way prices kept falling and falling and falling...
But fortunately i had cash... I knew this a crappy share... a real piece of junk.. Yet i was not in a mood to give this away in a loss... so i just kept it their and forget it...
back to present day.... Now i don't know for which reason ALUF is up again ( may be bcoz of right issue, may be due to manipulation yet again ) , i am not in a loss anymore, i was used to be in a 50% loss on this share...
What i have learned from this is... If we are in position to HOLD , If we got CASH, if we got Patience... No matter how dull , bitter or Red the market is we can WIN it... This is my personal story my dear friends ( by the way pls do not buy junk shares, don't follow rallies , specially fake ones, which are manipulated )

CHEERS

Last edited by Quibit on Sun Jul 10, 2011 12:02 pm; edited 2 times in total (Reason for editing : typing error)

Mon Jul 04, 2011 8:10 pm by optimistic · Mon Jul 04, 2011 8:10 pm by optimistic

congrats on your achievement. you got guts. if i were you, i would have panicked at the announcement of serious loss of capital. because we all know this is a useless share and it would have been reasonable for one to have run like a headless chicken. but holding on to fundamentally sound stock during such bad times could be justified. ofcourse, only if you dont want to realize your losses. the ability to hold a share and the return you gain from the share is debatable. because holding on to non-performing stocks is an opportunity cost. that money could have been invested else where where you'd be guaranteed that you'd receive this amount at the end of such time. with stocks, you never know when you could break even. but i guess that is the risk we take. depends from person to person.

Mon Jul 04, 2011 8:17 pm by investor1984 · Mon Jul 04, 2011 8:17 pm by investor1984

optimistic wrote:congrats on your achievement. you got guts. if i were you, i would have panicked at the announcement of serious loss of capital. because we all know this is a useless share and it would have been reasonable for one to have run like a headless chicken. but holding on to fundamentally sound stock during such bad times could be justified. ofcourse, only if you dont want to realize your losses. the ability to hold a share and the return you gain from the share is debatable. because holding on to non-performing stocks is an opportunity cost. that money could have been invested else where where you'd be guaranteed that you'd receive this amount at the end of such time. with stocks, you never know when you could break even. but i guess that is the risk we take. depends from person to person.

Definitely the opportunities i have missed bcoz of holding in to this is huge... Anyway my mentality is I never sell a share in a loss ( wich is wrong ), To justify my decision i always argue with my inner self and say " hey what if the share i am gonna buy after selling this goes down too ??? " .. " So better to keep this " ....

Mon Jul 04, 2011 8:21 pm by optimistic · Mon Jul 04, 2011 8:21 pm by optimistic

yes. i agree with you. your mentality recalls a principle that i've read of warren buffet.

rule #1 - never sell a share at a loss
rule #2 - never forget rule #1

Mon Jul 04, 2011 8:54 pm by ShareShares · Mon Jul 04, 2011 8:54 pm by ShareShares

Never sell any share when the overall market is at the bottom (if one cannot judge the bottom shares may be trading at a comparatively much lower level than it was earlier) best thing is to hold on if there is holding power. Shares sold at the bottom cannot be purchased later on at the same price. For most of the shares current levels at the CSE looks like in the bottom. Chances of going up are greater than chances of going further down at the moment. Most of the shares have a tendency to move up. I am not discussing any specific shares, in general terms never sell when the overall market is down.

Mon Jul 04, 2011 9:31 pm by Chabbi · Mon Jul 04, 2011 9:31 pm by Chabbi

optimistic wrote:yes. i agree with you. your mentality recalls a principle that i've read of warren buffet.

rule #1 - never sell a share at a loss
rule #2 - never forget rule #1

Buddy small clarification

Sometimes i made wrong decision ... Bcz its human nature ...

u knw last week i bought OGL 1st day @ high price & sold with loss on same day

Now i'm very happy with my 2nd decision if i hold this share i may lose huge amt since its keeps on falling Sad

I think time to time we need to change our rules ???? dnt u think ??

Mon Jul 04, 2011 9:58 pm by optimistic · Mon Jul 04, 2011 9:58 pm by optimistic

[/quote]

Buddy small clarification

Sometimes i made wrong decision ... Bcz its human nature ...

u knw last week i bought OGL 1st day @ high price & sold with loss on same day

Now i'm very happy with my 2nd decision if i hold this share i may lose huge amt since its keeps on falling Sad

I think time to time we need to change our rules ???? dnt u think ??

[/quote]

first of all, please be informed that i'm no expert but i am only going to share my thoughts on your issue buddy.

warren buffet said "buy stocks that you are happy to hold even if the market closes for the next 5 years" . he also invested in the business model rather than on a stock (which, i'm sure most of us do) . were you very familiar with OGL's business? did you like the way it was managed and how it was utilizing its financial resources?

i dont think warren buffet would apply that same principle to OGL. you bought it at a very high price which was not justified by its fundamentals. i really have no idea where OGL would be in 5 years. but i think your decision to sell OGL at a loss was a good decision. that money could be invested in a share that could deliver investor expectations. a lot of fundamentally strong shares have fallen a lot in value. i think this is due to general market conditions and also because retailers dump good shares to chase after speculative shares, not because those stocks were bad.

and we should also keep in mind that not all of warren buffet formulas can not be applied to the CSE. our strategy has to be different from stock to stock and from time to time. hope i got my message across to you clear.

by the way, i did not copy paste these from anywhere and i didnt try to sound like another Marketwatch. thats the last thing i would want to do Very Happy

Last edited by optimistic on Tue Jul 05, 2011 12:03 am; edited 1 time in total

Mon Jul 04, 2011 10:11 pm by Chabbi · Mon Jul 04, 2011 10:11 pm by Chabbi

@ optimistic

Thnx for your concern Smile

buddy u knw i was followed couple of Finance companies Introduction & I thought this wud act somthng Smile

but whn it was fake rally i was exited Smile

I ddnt much study on OGL till to bottom Smile

But with thr infor whc i got frm thr web it sounds good & Major holder was a well establishment Smile

Fundamentals share's were stacked badly .. i too believe recover soon Smile

I'm going with upcomming IPO's since mkt falling badly Sad

I think hv to wait till Nov to pickup Best share Smile

Cheerz Buddy Smile

Tue Jul 05, 2011 8:26 am by cse.alpha · Tue Jul 05, 2011 8:26 am by cse.alpha

optimistic wrote:yes. i agree with you. your mentality recalls a principle that i've read of warren buffet.

rule #1 - never sell a share at a loss
rule #2 - never forget rule #1

Warren Buffet's exact rules are slightly different:

Rule No.1: Never lose money.
Rule No.2: Never forget rule No.1.

This does not mean that Buffett never sells at a loss, or that Buffet never loses money.

He probably means to avoid large losses, cut losses before they get worse, and to avoid losses on average by making more money from your winners than losses from your losers.

Tue Jul 05, 2011 9:07 am by **Leo_pold** · Tue Jul 05, 2011 9:07 am by **Leo_pold**

Well, after two months to the market I have learnt a few lessons the hard way.

1) Never buy shares with money you do not own or money that you may need for something else. That will push you to sell at huge losses. And always keep some money with you as soon as you buy something, it has more chance to go further low Smile

2) Be patient. Very patient as anything that goes down has to come up. When something goes down don't blame the the gods but thank them. keep on buying to minimize the average. And sell when it goes up.
3) When a share goes up sell as you go. Do not expect it to reach the stars, since it never will. Same story as above. One goes up has to come down.
4) Buy when bear, sell when bullish.
5) Put the buy order a little below the current buy and put the sell a little above the current sell. (This is not for you expert guys but a newcomer like me always used to sell at the current buy and buy at the current sell)

Here are some of the lessons I learnt so far. So much to learn. A long way to go. Hmm...

Tue Jul 05, 2011 9:09 am by kiwi · Tue Jul 05, 2011 9:09 am by kiwi

There is a big difference between "Never sell a share at a loss" and "Never lose money". We are all human and we all make mistakes, even Warren Buffet - see link below. One of the most memorable things that my father ever thought me about investing in shares was that "any idiot can buy shares but only a smart person knows when to sell"

http://www.gurufocus.com/news/137224/buffetts-billion-dollar-mistake-with-moodys

Tue Jul 05, 2011 6:20 pm by optimistic · Tue Jul 05, 2011 6:20 pm by optimistic

thank you cse.alpha. i stand corrected.

leo_pold, interesting principles for a beginner Smile

. the best teacher we could find is our own mistakes. hope your mistakes will be a learning experience to you and enable you to minimize your losses and be a winner

thank you kiwi for the interesting article. it seems like even the worlds greatest investor was not perfect enough to make the right decision at the right time.

Tue Jul 05, 2011 6:22 pm by **mark** · Tue Jul 05, 2011 6:22 pm by **mark**

nice one,if you sure of a stock and you have the holding power,then hold without panic,doesnt matter its a manipulated or illiquid share,you may win someday,bcoz history repeats,in CSE its defa repeating. Very Happy

Tue Jul 05, 2011 6:30 pm by **MarketResearch** · Tue Jul 05, 2011 6:30 pm by **MarketResearch**

I have the same experience with GREG and I was able to average GREG @ Rs.63.50 recently and I believe that it will reach at least 70/= in coming days.I have 17,000 shares.It is enough for me.With the present market conditions we can not depend on stock fundamentals or fundamentally strong shares.We must find the tactics and strategies to overcome the different situations.

If you need, you must withdrawn from the battle field until the correct time.

Tue Jul 05, 2011 7:23 pm by UNI · Tue Jul 05, 2011 7:23 pm by UNI

is he a player in the sri lankan stok market?

Tue Jul 05, 2011 7:43 pm by **MarketResearch** · Tue Jul 05, 2011 7:43 pm by **MarketResearch**

UNI wrote:is he a player in the sri lankan stok market?

Life is a Drama.We are the Actors.

Life is a Play ground-We are the players

CSE is a Market-We are the Traders

As we all know CSE is not a Holy Place.

Laughing

Tue Jul 05, 2011 7:48 pm by stumpy · Tue Jul 05, 2011 7:48 pm by stumpy

Good thing is "MarketResearch" back again!

Tue Jul 05, 2011 7:49 pm by **MarketResearch** · Tue Jul 05, 2011 7:49 pm by **MarketResearch**

stumpy wrote:Good thing is "MarketResearch" back again!

hahahah Thanks Stumpy....

Mon Jan 02, 2012 9:11 pm by Kumar · Mon Jan 02, 2012 9:11 pm by Kumar

MarketResearch wrote:

UNI wrote:is he a player in the sri lankan stok market?

Life is a Drama.We are the Actors.

Life is a Play ground-We are the players

CSE is a Market-We are the Traders

As we all know CSE is not a Holy Place.

You are 100% correct.

Tue Jan 03, 2012 12:41 am by kaka · Tue Jan 03, 2012 12:41 am by kaka

Kumar wrote:

MarketResearch wrote:

UNI wrote:is he a player in the sri lankan stok market?

Life is a Drama.We are the Actors.

Life is a Play ground-We are the players

[/b]

You are 100% correct.