So continuing from my yesterday's point, I am trying to tell that traders will always be looking out another best opportunity in the market. So basically they want to churn their portfolio. But in this churning process they end up doing many things like...
1. Paying more brokerage
2. May not able to buy back the shares which they sold after booking some small profit. Take a example if I buy Axis Bank shares @ 250 and sells them at 300 or 350 thinking that 20% to 40% profit booking. But if starts moving beyond 300 or 350 what a common feeling will be is if it comes below that we will buy it back but most of the time we will not buy back it.
3. Meanwhile they try to find one more stock which is going up & may end up in buying over bought stock.
If you would have invested 1 lakh in each of the following stocks which I mentioned in the table in 2009 March of total 4 lakh. Now it would have become around 19 lakh like 7 Lakh from Axis Bank, 3.5 Lakh from Aban (Even though Aban went upto 1600 & presently trading around 800 odd), 5 Lakh from Tata motors & 3 from SBI. Which is almost 5 times your principle in Just 2.5 years. But this kind of return you will get only in recovery from recession bull markets.
So what I want to say that, if you believe in any idea/stock please hold onto it with proper trailing stop loss, sector watch & overall market movement.
And before concluding some updates from economy...
1. Monthly inflation data released recently is 8.5% according to new WPI series which is reconstructed by changing base year from 1993-94 to 2003-04
2. Today, I mean yesterday Reserve Bank of India (RBI) increased Repo & Reverse Repo by 25 & 50 basis point.
3. IIP data which released recently was 13.5% was way beyond the analyst's expectation.
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