Is this a time to book profit on Reliance Shares?

 

18^th October 2020

Is this a time to book profit on Reliance Shares?

Dear Fellow Travelers,

Namaste! I know, when you have to choose between loss and profit – you can take that decision easily. But when the decision is between two profits - more profit or less profit, most guys get confused. Arjun was a brave fighter but when he faced his relatives in the Kurukshetra war – he also got confused and decided not to fight.

You are not ARJUN and I am not KRISHNA but one thing is for sure – most guys goes into indecision when they have to choose between two good options.

How to deal with your selling decisions when a stock looks good as per MEDIA reports?

What LORD KRISHNA said in GITA chapter 4, VERSE 40 :-

 

अज्ञश्चाश्रद्दधानश्च संशयात्मा विनश्यति ।

नायं लोकोऽस्ति न परो न सुखं संशयात्मन: ।।40।।

 

ajnyashchaashraddadhaanashcha samshayaatmaa vinashyati |

naayam lokosti na paro na sukham sanshayaatmanaha || 40 ||

 

Above is the most BEAUTIFUL SLOK and I always think of this whenever I faced the situation of taking a DECISION.

SAMSHAYAATMAA is a person with INDECISION. It says INDECISION takes away your happiness and you always remain in PAIN in this WORLD and in the NEXT WORLD.

Lord Krishna says - you remain in INDECISION due to IGNORANCE AND LACK OF FAITH.

Most investors are ignorant of the detailed knowledge of the market working point of view. Since they are ignorant, they have no faith in their decision. So, they remain indecisive. Simple.

What is the biggest ignorance 90% of the investors have?

They don’t know why they have invested in Market or Particular Company. All they know is some concept of making money than bank FD or other small savings. Now, when their shares move up by 50% from their purchase price in a short period, they look at the media, and when the media talks about a more likely increase in the prices of their shares – their mind is taken over by GREED. They want more and more good things.

I know people who have not sold Infosys at 16000/- / who have not sold Reliance in early 2008 at 3000/- / did not sell ACC at 10000 in 1992 / did not sell Unitech or Suzlon or K-10 stocks or Reality shares in 2007 when they were hitting new highs every day. They all were crying long after that.

How the SMARTEST people make decisions?

They know WHAT THEY REALLY WANT from their investments. They operate out of SENSE of URGENCY all the time. They want it NOW and not tomorrow or the day after. If they get what they want NOW, they don’t want to waste time in waiting further.

When normal clients ask me about selling any stocks in which they are making a good profit – I immediately sense their fear of missing out on future returns or Greed to make that extra money.  This is NORMAL for normal investors.

You must also know what is  NORMAL in the Market? What you sell will move up and what you buy will go down.

What is the way according to me?

Go back to the time when you invested in that company. What was your expectation at that time? Have you got that returns or more than that? If yes, why you are not selling it and enjoying your profit?

I have observed a unique trait in the middle class or newly rich people – they buy some of the best things and keep it in their house to use it someday in the future.

Say they have got the best and the costliest crockery. Now if the maid is washing them – they may break it. So, they will not use it or if at all they use it – the lady of the house will clean that crockery herself. Since she does not want to clean them daily, that crockery will be used once in a while. What a waste of money and place?

Same is the case with your shares. You bought it for profit, you are getting that profit – sell it. Do you need an MBA degree for this?

Let other guys who buy from you make some money, who buy from you. They will bless you if the prices move up after they buy from you.

This way you have made two wise decisions – your have enjoyed your profit and you have earned the blessing of the buyer, in case shares moves up from his purchase price.

If you don’t sell and prices come down – all your efforts in investing and holding will be a waste like buying a costly Crockery.

Most of the so-called long-term shares in a normal investor’s portfolios are nothing but the mistakes of not selling them at the right time. Since he is not ready to blame himself, he calls them Long Term.

The reality of Share Market: -

There is a saying – “Bulls make money, Bears make money but pigs get slaughtered”

So, always be clear about your investment purpose. If you lose the money, you will recover them. But if you lose the PURPOSE, you will lose the Juice of LIFE. 

Let your genuine purpose of investing always be your guiding force all the time and not the MEDIA reports. If you are unable to find the purpose, the share market is not for you. 

Wish you enjoy your profits.

Follow me on Twitter @hiteshmparikh Or on Whatsapp - +91-9869425399.

Live With Passion…Invest With Passion.

Hitesh Parikh.