Friday, January 18, 2008


Market went down so, so terribly today. I believe I am a Long Term Investor. My principle is -Buy good stock and don't bother about these daily ups and downs. But like thousands of other Indian Homemakers, I am a CNBC TV18 -addict, and today everyone on CNBC sounded so gloomy, I wondered if I was wrong in not selling...

I was making good money, am making, a little lesser, but still good money...should I take my profits, hold the cash and wait for the bottom. It does look like there is a lot more downside.
My husband was teasing me just days ago, he said he dreamt that the market went down four thousand points, which means it will reach 21,000-4000 =1700!!!! At the time I had laughed and said I was all set to accumulate some more of Reliance capital, Larsen & Toubro, Reliance Communications, HDFC...that I was quite looking forward to some such crash. I am just not a happy seller, I love to buy and keep for good...I guess Udayan Mukherji will call my treasured stocks, 'Family Silver'. I hope my grand children will enjoy the perks of my long term wisdom! Well, we have done pretty okay till now...but I know I have a selling phobia because I sold, State Bank at 975, Bharti at 360, Reliance Communications at 200, Tata Power at 535...and many other such heart rending stories.... after the May 2006 Crash. Reliance Energy I kept, because it had R E L I A N C E in its name, and seeing how Anil Ambani was going to supply electricity in Uttar Pradesh, UP has so much darkness if somebody sells candles there, they have to make money... not the most appreciable logic, but I was lucky.

Maybe people like me should only buy Mutual Funds and somebody else do the thinking and planning for them. I also read somewhere that the only way to be RISK FREE in the stock market is to be a long term investor. So now why is my heart sinking because the market closed below 19000...

At least two of my friends sold everything in their portfolio (both kept L&T) and applied for Reliance Power. What if the market bounces beautifully back and Sensex makes newer highs? (THANK YOU, THANK YOU! THE WORDS SOUND LIKE SUGAR, HONEY, WHISKY, SODA, 2900, 3200 ETC. IN MY EARS TOO!!) and what if Reliance Power opens with a ssssss sound? Please don't curse me, I too have applied for the maximum i.e. 225 shares and hope to make a killing...but frankly, my selling-phobia might keep me from selling even one.

I believe the only thing making the market plummet is the astuteness of Indian retail Investors who have sold all their 'paper gains' (their words) and applied for Reliance Power. A part of me wishes I was one of them...but I am not too sure. My cousin who is studying Investment Banking in the US says, anybody who has held on to their stocks for ten years or more makes good money. This fact applies to all times, including the Depression in the US, and there is no reason why it should not apply here now. BUT I ALSO READ THAT STOCK MARKET HAS A MIND OF ITS OWN AND IT DOES NOT FOLLOW TRADITION. LOL : ) I am feeling a little better after writing all this. Every time I bragged to my dad, who has sold all his NTPC, Nagarjuna Fertilizers etc. about how much money (paper money/virtual money on my three dmat accounts) I had made, he sounded both angry and concerned, "It's your money only when you've sold." He warned.


Devaki said...

Hmmm... I am the exact opposite. I have a phobia to 'buy'. In fact, I have a strong aversion to anything to do with the stock market. Just seems too risky to me, despite the numerous golden windfall stories people around me keep telling. (I can see you've some of them too!)

Anyhow, the husband and I still have a long way to go (barely 4 years out of college), so hopefully we'll get around our risk aversion and start investing sometime soon.

And your dad is right. Aren't dads always right? :-)

Indian Home Maker said...

Yes he was right. Lost nearly all the gains...more than 80% profits are gone now....but it's market it will come up again and hopefully make newer highs:)
I like being part of a good company, like Reliance Industries. Buy and stay. Then it isn't a gamble.