Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Roller coaster

with one comment

One thing to say buy and hold, another to practice it. One thing to say buy as if stock market is shut for 10 years, another to avoid looking at stock prices for one week.

One of the stocks that I have held through TWO 40-50% drawdowns is Muthoot Capital over the past five years. I have done it once with few other stocks but not twice. Question to ask: Will you do this with 30% portfolio weight on a single stock. Having trading mentality is a good idea in these cases. Or if you really have the confidence, will you add more after price is more than 50% down? Its a question one should ask before buying.

Here is another look at an Australian counterpart, Bellamy’s Australia, into infant milk/foods, about which I wrote twice https://lifeandequities.wordpress.com/2015/11/07/organic-trend-has-no-end-trilogy-new-zealand/ and https://lifeandequities.wordpress.com/2015/09/16/organic-food-long-term-trend/

all within two short years, the range has been 1 dollar to a steep 16 dollars, then lost 75% of the market cap to trade at less than 4 dollars.

Insider trading, lack of growth in China, imposition of duties etc. were the chief reasons.

ASIC (equivalent of SEC / SEBI) is quite weak and feeble institution, Bellamy’s has paid a fine of mere of 66,000 AUD, less than peanuts.

http://www.sbs.com.au/news/article/2017/10/11/bellamys-pays-fine-conclude-asic-claim

Company is back trading at 10 AUD. So, your returns are dependent on your entry price. I think sometime it pays to be medium term oriented rather than long term. “Holding forever” is certainly a bad idea.

BAL

 

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Written by amitdipsite

October 11, 2017 at 2:35 am

Posted in Uncategorized

One Response

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  1. You had shared a very nice note on United Nilgiri Tea Estates. It is on upper circuit since two days. Please share your fresh views on the same. I have a hunch that there may be a possible takeover.

    mg108

    October 27, 2017 at 10:33 am


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