slstock wrote:X,
Yes, short term/medium term trades can become long term holdings if we don't monitor the share movement daily or control our emotions.
Specially penny shares losing 10 cents even can mean 10% loss . Ex : If you buy Y share today at Rs 1 for a day trade and missed to sell same day and then couldn't check market for 3 days, maybe now it could be down 30 cents. ( 30% loss). Then day trades can become long term holdings.
It has happened to me too.
It happens to me while back when RAL sold Richlife I miscalculated capital gain for RAL and bought maybe 500,000 or 1Mn shares around 5.5/= share. it was SLS asked me how did you come to the figure and then all of the sudden I realized that I haven't considered acquisition price of Richlife and then sold out around 5 I guess.
anyway, in addition to my above comment, most of us in CSE are not long-term investors, where even Dr. Senthilverl is a trader. common investors just like myself may put 5Mn, 10 Mn max to CSE because FD rates 10-12% per annum is not enough for us at the beginning of the investment. hence, I daresay, every person here is a trader at the beginning. when you are passing the stage I mentioned in the above comment, and reading and seeing other investors talk about long-term, fundamental stocks, and the Buffett, then with the overall frustration of trading losses you start to believe that we are now mature and in long-term investment.
we read about Buffett and his famous quotes like
Warren Buffett wrote:Do not put all eggs in one basket
Warren Buffett wrote:Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years
Well, Uncle Buffett is like Dhammika Perera they buy companies to control. so it doesn't matter market is closed for them or not. besides, there is another quote from Buffett,
Warren Buffett wrote:Diversification is protection against ignorance. It makes little sense if you know what you are doing
Warren Buffett wrote:If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes
Buffett himself is a wonderful investor who can identify good companies way before they perform. but would his strategies suite common investors like us? rather not, we if diversify our small capitals among 10-15 companies its very unlikely you get annualized return over 15% including dividant. baskets Buffett referring is not shares, what he meant was equity, real estate, and industries (financial and non- financial) and with his size capital (when he declare that wisdom in quotes) probably he can diversify in hundred of different baskets with controlling power.
so, here comes us. ordinary investors/ traders at the most illiquid market (as my experience) there are few players who push shares up and down, too much dependency on foreign purchases, declined economic development and controversial deals. therefore, in an unmatured market like CSE, even growth stocks are in cyclic waves. so, being a never sell investor is a hard but poor choice. just like being a virgin.
for example, let's say someone bought JKH at 50 Rs at 2009 Jan. if he is a never sell investor as of now his capital return is 200%, 20% annualized return while if he bought at 50 in Jan 2009 and sold it out in Oct 2014 ( let's not take 300+ fancy figures for selling, at that time JKH was supposed to go beyond 600+ with casino and warrant prospective- rather, in 2014 Oct seasonal investor would fundamentally and technically see headwind) at Rs. 250 he would have around 450% return on investment, annualized 75% return from JKH.
so there will be plenty of opportunity to in and out for people like us, that can be 1 month, 1 year or 5 year doesn't matter. the important point is the art of picking up the right companies and art of selling at right time, right price.
another example is, LFIN is a good solid company, we all agree I guess. in 2010 I bought LFIN at around 140 Rs and sold it for 250 in one week. 80% return in one week. perhaps people who bought LFIN in mid-2011 would see around 30% capital appreciation for all these 7 years.
therefore, like many things, there are no universal rules or holy grails for investing or trading. mastering own method and doing it better than other will make you a successful trader/ investor.
Cheer!
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