Standard Chartered PLC IDRS Message Board (Page 1)

ravi bangalore,

thx a million again.
noted all.
yr advice was logical & to the point.
specially about the time averaging.

thx

329. Mary

You need not be brilliant to outperform indicies. If you go for brokerage reports, they might have vested interest & hence, you may run the risk. However, history says, even seemingly out of fashion stocks could give a recent return over long-time. But, you should follow the basics - i.e. either to use stop-loss or time averaging.

If you don't like using stop-loss, use time-averaging technich i.e. typically invest in four instalements over one year (with three months gap).

Here, there are two possibilities: -

After you invest 25% capital in 1st instalement, either your portfolio will be in profit or loss.

In case of loss is wider (say more than 20%), buy those stocks again after three months. In case your portfolio is in profit, go for different stocks (& in different sectors).

Typically don't invest in more than 10 - 15 stocks as tracking becomes difficult.

As I am busy right now, I will give you list of underperforming stocks. You can choose among them.

It will take some time as many websites does not adjust for bounus, stock-split etc. In that case, you may end up choosing wrong stocks. Hence, I need to check for yearly chart before taking decision (to know whether it is adjusted for bounus / stock-split or not). Some stocks have lost more than 80% also from their peak - Educomp, Aban etc.

dear ravi banagalore,

thx again.
essaroil is still there.
wilco soon.
how long shud one wait for underperformance to
become concretised...for an investor.
thx
rgds
m
---

323. Mary

Today I bought Essar Oil @ 134. I am holding for short-term for a target of 139, 148+ with a stop at 126.

In case you have exited, just forget. Stock market will not close from tomorrow. You get opportunities in some other scripts. In market, cash is king.

Suzlon (57.80)

Rights issue priced at Rs.61 i.e. above prevailing market price.

The zone between 57.8-53.5 is no trading zone for short-term traders. However, for investors as long as it holds 53.5, every dip is buying opportunity.

Above 57.9, it becomes bullish. Target 61.5 (normal high), 67.95 (extremely high) or even 71.75+ (most extremely high). Stop-loss 53.50 for traders.

Below 53.5, it has support at 52.1, 47.65 & few points below 43.25.

323. Mary

If your scripts are underperforming, exiting at one go & investing in better companies is good idea.

Gross underperformance is a signal that stock selection & investment style need to be re-looked.

As you don't keep stop-loss, time averaging (investing in four instalemtns once in three months is very important). In 2008 bear market (mother of all bear-markets in history), bearishness lasted from January to October i.e. in 10 months. Considering this, I advise to invest over one year time frame in instalments.

If you go for price average, it is not possible to decide which is low or high. You may agree that some Reliance Group comapnies, real-estate & many small-cap comapnies lost more 90% value from their peak. In such cases, you may throw money to drains while doing price average.

dear ravi bangalore,

thx a million, once gain.
for the brief but excellent explanation.
and valuable advice.
hope we will be in touch.
thx
rgds
tc
mary
--------

323. Mary /K.K.Natarajan

Invest 25% of capital in Suzlon, Reliance Capital & DLF. Every three months invest 25% capital & thus you will be fully invested over one year period.

You need not invest in these companies itself. You will be investing your capital at different cycles of market. No matter even if market is up after three months, you invest another 25% in different scripts.

Thus you invest your capital at different market cycles over one year. As you don't like to put stop-loss, this is a good idea. You don't get struck with all your money.

In case you get struck with 50% of capital, you can keep rotating balance amount so that your cost price will be close to prevailing market price. Moreover, downside is less in these stocks as it is already beaten-down.

Remember, todays underperformers are tomorrows outperformers & today's outperformers are tomorrow's underperformers.

dear ravi bangalore,

thx a ton for the edelweiss info.

will exit ntpc/essaroil/grasim as advised.
shud i exit in 1 go?

where is the best buzz available?
on moneycontrol?

are there any beaten down in group A?

thx
rgds
tc
mary
------

320. Mary

My dear friend Mr Ajay Ghosh told that Edelweiss has bonus & stock-split news. If it is true, then exit as soon as it becomes public. There is adage- BUY on rumours & SELL on news.

If you like brokerage stocks, prefer India Infoline or Indiabulls Securities. They are not only beaten out-of-shape but also have operator's fancy.

Meanwhile, it has unexpetedly become very bullish & crossed even third target (most extremely overbought zone). Keep in mind some price level to exit if it start falling unexpetedly.

You should concentrage on getting your investment back, not grudge on any stock that you lost in Edelweiss & you should get in that stock only.

Don't love or hate any stocks. We loose because of our own home-work & decision.

320. mary

You need to buy when they buzz. Otherwise, they may keep falling 1% or 2% whenever market falls.

Buzzing is a kind of confirmation that some big investors are accumulating. You might have noticed that buzzing started since 15 days. However, buying in three instalments over 18 months (once in six months) is better idea. This strategy preferable as I believe you don't like putting stop-loss. As you don't want to put stop-loss, you don't buy in lumpsum.

dear ravi bangalore,

thx a million again.
noted all the gems.

now awaiting the gems on beaten-down
stocks in 'A'.

shud the loss-booking be done without
regard to any adjustment on STCG which
may or may not be available at the time of sale.

thx
rgds
mary

318. K.K.Natarajan

Wait for sometime.

Ravi, Bangalore,
For the benefit of new comers why can't you suggest some beaten down stocks in Group A. Aban, Educomp, DLF, Unitech, Suzlon, GMR infra, etc., all fall in this category, aren't they?

"Honey, if I lost everything, would you still love me?" I'd love you, but I sure would missu you".

At a time when the valuation seem to be stretched, it can be a better idea to buy the beaten down stocks.

When compared to market's historic / trailing valuations, the current valuation seem to have captured the expected growth. History shows that in the long run, even the seemingly out of fashion stocks have the potential to do well. However, prefer A Group stocks.

Investing in beaten down stocks can yield handsome returns. But you should buy in at least three instalments over 18 months period (once in six months - it is call 'time averaging'). This strategy is described as "buy low" or "going against the tide".

While we invest in markets, we need to be prepared for market risks & volatility. You can make the market works for you the best by investing in instalments. Time avaraging is better than price averaging as market has no top or bottom.

313. WiseOwl, Perth

Warren Buffet's Fund is not No.1. George Soros Quantum Fund (trader) & many hedge funds (short-term funds with one buy & another sell strategy) have outperfored Warren Buffet.

Mr Warren Buffet is a safe investor. But we cant easily outperform Warren Buffet if we stick to basic money management rules.

313. WiseOwl, Perth

You need not be accountant to study fundamentals or mathematician to study technicals. Simple money management technich could help you to beat benchmark.

Simply buy beaten-down A Group stocks in three instalments over 18 months period (with six months gap), you beat benchmark. Only 10 stocks with different sectors is good enouch to beat benchmark. That is consistent & can be easily practiced by novice also.

HDFC mutual fund ka vice pracident choori karta pakada gaya hi, investors kay paisay say jua khal raha tha, cbi,sebi, govt. And amfi ko batana chahiy ki kiya action liya gaya.

@305 Ravi, Bangalore,
Agree with your views, that both technical and fundamental analysis have their place.
I was merely making the point that Fundamental analysis is not difficult to do, even for individual investors and was sharing a formula that I use that combines a lot of fundamental analysis and bit of technical analysis and collective wisdom of brokers.
Both technical and fundamental are chasing the same thing. Fundamental analysts (or insiders) get on the boat first, and cause the price to start trending in up or down, and technical analysts try to recognize the patterns to find good entry points.
By the way I read in one of your posts that you manage a return of 10-30% in 6 months – is that consistent? Mr. Buffet can manage only ~20% but consistent for 40+ years, and a shocking statistic is that about 70% of professional fund managers are unable to beat the benchmark index. You belong to Greenwich, Connecticut not Bangalore.

311. Mary

Booking loss is painful decision. However, my personal opinion is hold Bharti, JP Associates, SJVN.

Exit counters like Edelweiss, Essar Oil (some other good stock is preferable over this), Grasim & NTPC (it is slow mover, you can pick much better stock).

With whatever amount you get, invest in beaten down 'A' Group stocks in two instalments in staggered manner (with three months gap) during market correction (let us say when Nifty corrects 100 - 150 points).

Don't chase any news-counters e.g.:- bonus, stock-split, dividend, AGM / EGM, order-flow etc.