My bad eggs: hatch or throw?

Dear Members,

When I had begun investing directly in stocks, some of the shares that I had bought were as follows


If you ask me the investing rationale, frankly speaking there wasn’t any, besides some elementary calls of IOC being in a “good space”, VEDL will “obviously do well”, etc. Yes, thanks to the advice of some amazing VP members, I possess shares of many amazing companies like asian paints, hdfc bank, laurus labs, etc. However, the bad eggs highlighted above are dragging my portfolio down. My question to the experts is - What should I do with these eggs?

A simple thought that comes to my mind is book the losses, and try to cover up the difference some other way? is it even feasible (opportunity cost, take 10% growth into consideration, etc.)? I don’t think so. In such a situation, what are the options do I have? I would appreciate if I can get some guidance.

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Once you have concluded it’s a bad investment or your hypothesis is not working out the sooner you get out the better it is irrespective of the price. And my view is investment should be done with objective of growing capital with businesses that you understand and pass your filters. New Investment should not be made with objective to cover up losses on bad investment…


Thanks for your inputs, appreciate it :slight_smile:
Unfortunately, booking a loss of approx 60k (that too majorly because of vedl which if I am not mistaken, is undergoing a reverse book building process) is making me jittery :frowning:

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Another way of looking at losses is to look at them w.r.t your overall net worth and future investments. The loss could be big right now, but if it is small compared to your net worth and future investments, this loss could be affordable. Book the losses, take these as lessons and move on. Affordability is needed here.

If not, know what’s happening and stay put for some unexpected tailwinds for as long as it takes. Patience is needed here.

Hi Eshan

Would you buy any of these at CMP if not part of your portfolio? Hold, if answer is YES. Else book your losses and shift to other progressive themes.

  • Mehul

I was in the same boat as you a few years ago and keep getting into same situation every now and then.

What you need to realize is buy price doesn’t matter. That money is already gone. Don’t even think about recovering. What you have today is current market value of stocks you own. Now with that leftover money do you want to make the same investment or do you want to switch or do you want to book a FD, you can think afresh. Believe me there is nothing better than starting from cleaner slate and you sleep peacefully immediately after selling out. :grinning:

Note that above is applicable only when your original theory/hypothesis about the initial investment is not valid anymore. If fundamentals and growth is intact you need to take decision as per your investment temperament.

Eshan, one famous investor said, stock is down 90% how much can it go down further. Answer is 90% more.

Don’t think of what capital you have lost, it is a sunk cost… Think of capital that you have in these stocks and what is the best use of that capital. Cut the weed, water the flowers and move on.


thanks @ChaitanyaC. Yes, it is small compared to overall portfolio (including cash, MFs, etc.)

thanks @mehul75. No, considering the promoters/ongoing market dynamics, i probably wouldnt invest in them

thanks @sandeeprawat that’s an interesting way of looking at it

thanks @Swapnil_Marathe.

You will have to take individual call on the companies after studying their fundamentals.
I don’t like promoters of Fconsumer and Vedl.
There is disinvestment drag on PSUs at present.
Pel you can keep. I heard of some developments happening there.
(Disclosure- not invested in anyone)

thanks @akash_das i completely agree with you. i am not sure whether this is the right thing to do or not but i am waiting for the reverse book building process of vedl so that i come to know of the price for delisting.

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Hi Eshan,
The approach I follow is during such scenarios:

  • what is the reason for the stock price decline - stock related to overall macros related
  • Does the hypothesis for which we bought still hold true
  • Rationale for uptick in earnings & price: visible growth triggers & industry tailwinds (if any)

Thanks for your inputs @kartik_bhat

Interestingly, some companies of future group have been purchased by reliance. Let’s see how that affects fconsumer share price

Future Group

Reliance Retail Ven to buy Retail, Wholesale, Logistics business of Future Group

RIL Unit to buy businesses from Future group for Rs 24,713 crore

Deal to be done via Slump sale basis

RIL also to buy Rs 1200 crores worth of shares in FEL via pref issue

Future Enterprises
To merger listed Future cos with Self

FEL to issue 9 shares for every 10 shares in Future Consumer

FEL to issue 116 shares for every 10 shares in FLFL

10 shares of FRL to fetch 101 shares in FEL

Future Supply Chain 10 shares to get 131 shares in FEL

Future Merger Ratio +ve for other listed entities

Swap Values
Future Cons at 18 vs CMP of 11.5 (+57%)
Future Retail at 202 vs CMP of 135.2 (+49%)
Future Life at 232 vs CMP of 145 (+60%)
Future Supply at 262 vs CMP of 151 (+74%)
Future Mkt Network at 36 vs CMP of 27 (+35%)

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That was really informative @Dragon. But till can we buy fconsumer so that it gets converted to fel shares. What’s the cutoff date?

I might have missed out on disclosure in my above post, I received it on a telegram group. Please don’t take it on face value and plz recheck the calculations and correctness of the information

Alright. Thanks a lot