Reader: Sir is Hindalco a good company?
Dharni: Yes, of course.
R: Good i bought it at Rs. 240.
S: Hmm good. What is the price of the share now?
R: Such a good company sir, I thought you would know the price! It is Rs. 174 now…(not sure about the date – a few days ago)
S: Oh! so you are at a loss….
R: No sir I further averaged at Rs.180…so my cost has gone down…and this time I bought 200 shares.
S: What is the price now?
R: Sir the price is Rs. 147, I bought another 200 out of my last 2 months salary and by selling some Reliance Industries shares..I have bought some more at 124…now my average cost has come down quite dramatically.
S: so you at least made money on Reliance?
R: Sir you must be joking. I bought Reliance Industries at 1243…and sold it now at 834 Rs.
S: OMG….why did you sell Reliance?
R: Sir it is not increasing at all.
S: what is your time frame for Hindalco?
R: Sir long term sir…I will be invested for 2 years sir. My first purchase I am already holding for one year. I am sure in 3 more years at least, I will be able to sell on a no profit no loss basis.
R: Sir I listened to all that you said – a) bought a good company with good management.
b) As you have been recommending averaging (SIP) I have averaged also.
c) I do have a long term horizon – more than one year. (My CA and my broker told me that 1year is long term).
Still I am losing money……………what to do sir?
Readers willing to answer are welcome….I will share my reply after a few days..
Source:Subramoney.com