Thursday, September 16, 2010

Opportunity Cost Is Too Much

So you may ask first question itself that what is opportunity cost? Opportunity cost is the cost of an 2nd alternative that must be forgone to pursue 1st one. In more layman term, by opting for one choice (out of two/multiple choices) what is the loss that we are incurring for not opting for another one.

You may remember, in last couple of trading sessions Sensex has regained its 19000 mark from January 2008. And market bottomed in March 2009 around 8000 levels in Sensex. From that level present level Sensex return is 137% considering 1900 levels in Sensex.

When market was bottoming out around 8000-9000 levels, I (in the sense many people would) have identified certain well known company's stocks like Axis Bank, Aban Offshore, SBI, Tata Motors.

Now if you take these kind of stocks' returns over the same period, from March 2009 to till now, you can see the kind of return Market has given over the same year & above mentioned individual stocks

Stock Name March 2009 Price Present Price % Return
Axis Bank 200 1400 600
Aban offshore 250 850 240
Tata motors 200 1000 400
Stae Bank of India 900 3000 233
Market 8000 19000 138


will continue tomorrow because I am feeling sleepy...

1 comment:

Unknown said...

Hi bro, got d glimpse of blog for first time... N it feels to get involved more in it though i m illiterate in share market..;-) It is very informative.. But as a common man, i lik everybody need to kno hw to raise my/our profit... N ur blog helps there.. Rt at bulls eye..:-) seems lik i m in a wrong profession.. I too would ve made some mark if i was in technical field..:-) keep on postin bro,