I have been thinking!!

8th december 2006
When should you sell you company?
You should sell when you find that the company loses on its fundamentals, when the company is overpriced or when the management becomes poor or selfish. You can also sell when you need urgent cash. You can sell when you find companies which you feel have more value than the companies in you portfolio.

1st december 2006
Correction, Crash and Worse
How long shold one wait to buy?
Well stepping into the value investor's shoe, if you find a good company with solid fundamentls and shareholder friendly management, you can buy it. The question when arises. If you feel if the price of the stock is overvalued, then probably wait for a correction. A correction can be loosely defined a fall of 10% or more of market index. A 20% fall or more can be termed as bearish . Similarly a 30% or more fall or more would be extremely bearish. Then the next question can be "how long will it take for a correction?". Well it might take 2 or 3 years for a correction, and more for a crash. But you cant be sure.

Market ignorance is Good!!!
A long term investor need not keep track of the market price, economies and peer tips. In the short run all these factors play a crucial role. Prices of good companies fluctuate, economies rise and fall, and tips work or misfire. He need to look for strong companies which head north in the long term. He should study and understand the characteristics of those companies. Company research is a continuous process. Good charatcteristics include selfless management, strong financial strength, owner friendliness and competiveness. Tendency to buy and sell relates more to market movements than the performance of the company. The greater the frequency of watching the market fluctuation, more the tendency to do [buy/sell] something with the stocks. A good investor would spend more time in understanding the company character, instead of worrying about the market fluctuation. Iam not saying the you shuld completely ignore the market. You need to look into it only to find out whether the company you are tracking is available at a bargain price [margin of safety].

Believe in what you see (just for picking prospective companies)
Time and again people invest in companies that they dont understand. You might have put your hard earned money in biotechnology, power and lot of other companies which have an attractive name. I have come across few name like crazy infotech, alchemist and aeonian investments(in fact i bought some). Well those names are catchy! I have been watching crazy's stock price go crazy from Rs 30 and am still watching it. Within a matter of few months it touches Rs 110. When this is now a three bagger as peter lynch would have called it. But Dont invest in something you dont know. Research then invest. Or else you might not know when this company goes crazy again and fall to Re 1. I am not telling this company is good or bad. I am not asking you to understand a comapny before investing.

Bigbaggers are found in your backyard!
You dont need a professional stock picker to advise on what to buy. You can find one in your backyard. It might be the one whose product or service you would have enjoyed. Buying top companies is like buying jeans at lewis. You can get the good jeans from downtown at a price much below.