Fundamentally Sound Stock / Idea is always the CAUSE of LOSSES to the masses. So beware.
Tuesday, April 25, 17
Fundamentally
Sound Stock / Idea is always the CAUSE of LOSSES to the masses. So beware.
Greetings from Hitesh! It has been a
pleasure to see my posts are being circulated, read and appreciated. I thank each and every reader. I am sure most
of you would get skeptic with the above sentence. If you look the larger
picture – you have been advised to invest in Fundamentally good stocks, buy
branded products, do friendship with good people and things like that. I am
talking 100% agsint these beliefs.
How
many of you believe that HOUSE Prices will keep on increasing permanently?
I am sure all would agree on this premise
that HOUSE price would keep on increase. Many would give me an example of
buying a land at Rs.10 per square feet by his grand father and now the same
place is costing Rs.50000 per square feet. He would not agree with me. Many
other can also give such examples of their house buying and prices have hit the
roof in last 15 years.
It is universally accepted belief that the
value of houses was certain to increase over time. This premise has created the BUBBLE.
The bubble is created when a large
percentage of population buys into some originally sound premise (as mentioned
above) and it is quite interesting how that develops – an originally sound
premises that becomes distorted as time passes and people forget the original
sound premise and start focusing on PRICE alone.
This caused the bubble in USA and we have
seen what happened in 2008.
Almost in all the countries it is believed
that HOUSE prices will move up and the post effect of that belief is still
causing MANDI in USA, EUROPE and other countries. They are still struggling to
come out even after 10 years.
Have
you observed your portfolio?
If you are in the market from HARSHAD MEHTA
period – you will still find ACC in your portfolio which made Rs.10000 per
share/ If you are from KETAN PARIKH time you would be holding INFOSYS which
made Rs.16000/- HFCL making Rs.2200 / If you are from 2004 – you would be
having UNITECH or J P Group stocks or RELIANCE GROUP stocks.
I have no doubt that the companies mentioned
above were 100% good at some point of time. But you focused on the PRICE alone
and did not check the PREMISES that are they good when you bought or if you are
still holding?
Reliance made Rs.3000 in 2007 and went to
Rs.670 and after 10 years it is showing sign of revival (with a HUGE
DEBT)!! If you are our old readers – we
were the first to hint get out at 2500/- (most guys were talking about Rs.6000
at that time).
In the current time they sold D MART at 40
p/e through IPO and most guys applied that shares. They all become happy when
it got listed at 65 p/e and now the stock is at around 100 p/e. Infosys was also
traded at 100 plus P/E in Ketan Parekh’s time and we know what happened later
on.
If you invest for SOUND reason or some
FUNDAMENTALLY STRONG MOAT – make sure that MOAT or SOUND REASON remains VALID
for the FUTURE also.
In
economics / finance / technology – things take longer time to happen than you
think and then they happen faster than you thought they could.
So, look at all your investments regularly
and check whether they are still backed up by SOUND REASON or not?
Let
us look at the EDUCATION:-
Here also all would agree that EDUCATION is
a BIRTH RIGHT of every KID. Just look that how the bubble has happened in this
area also. The premises of EDUCATION have become DISTORTED over a period of
time and it has taken away the LIFE of budding KID from one class to other
class and money of parents. Many parents take loan to finance the education and
the end results today are PURPOSELESS education and JOBLESS Youngsters. Children
have become the DREAM FULFILLING machine of the parents.
The
BASIC premise of EDUCATION for all is the NOBLE and BEST but see how it has
take a shape now a days.
How
to apply this learning to your investment success?
I have always followed that investment is
not just a study of a company / industry or demand and supply prevailing at
particular point of time. Investment is study of the MASS SOCIETY. How they
behave, what they believe and what they will do next?
The
catch here is once you know what they want / they believe or they behave – you
do 100% reverse and go to sleep.
Those, who sold in 2006 and 2007, made
billions in USA. Same way we asked to buy in the DEEP MANDI of 2008 DECEMBER
and we all made tons of money by March 2009 and beyond!!
You will not be able to do this unless you
KNOW yourself very well. Most guys coming to me are well equipped with the best
of the education, experience but they lack SELF KNOWLEDGE. They are high IQ
people with CONTROL C and CONTROL V type.
I know many of my friends TRAVELLING by
TRAIN in MUMBAI in spite of having more than one CAR. They do not travel by CAR
as it is painful to drive in TRAFIC and to find PARKING PLACE. These are
copycats. They want CAR because their NEIGHBOUR is having. What the society
people would talk about them? Many of they have bought the car on LOAN and they
are travelling with OLA or UBER!! These people are always under stress as they
are coping their fellow neighbours.
It is very difficult to make them look with in
as they are not ready to understand the difference between their BELIEFS and
themselves. They act out of BELIEFS or COPY only.
What
NEXT?
I am interested in you and your lasting GROWTH.
If you want to GROW yourself without STRESS - you are welcome to explore
yourself under my supervision.
I give you a guarantee that being with me
for 3 years will be the best investment you will be making in yourself.
Make your CHOICE.
Happy LEARNING.
Live With
Passion…Invest With Passion.
Hitesh Parikh.
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