Portfolio Recommendation Without Price

I have seen people posting their portfolio without mentioning at what price they bought a stock and people commenting on their portfolio without knowing at what price they bought it. I think it is important at what price you buy as it is important as what you buy. You can buy Asian Paints at 80 P/E and then people commenting you have good company in your portfolio doesn’t really make sense to me>

1 Like

Look at it this way : As a long-term investor, once you have done the due-diligence / initial study and buy into a company at a particular price (either lumpsum or over a period of time), it becomes a part of your equity portfolio. From then on, the decision on your part as an investor will be one of the following:
i) Buy or add more if the company is doing well over a period of time or in a general mkt fall
ii) Sell if the company is not doing well, or sector doesn’t hold promise
iii) Switch to another company when you find one and the latter (newer idea) holds more promise than the one you already hold.
iv) Sell when you need the money (or in case of an emergency)

In either of these cases, the initial buy price (or even your last/average buy price) is not a determinant. So, in a sense, the buy price should not matter to you as an investor from that point on. Besides, if one is fixated with the last buy price, biases (like recency bias, sunk cost fallacy etc) may set in and hold you back in taking further decisions on your portfolio related to that company, like adding more qty if there is a general market fall (no fault of the company) or sell/switch to a better company.

As part of portfolio management though, some investors use either the average buy price or the current price of the scrip - to decide how much quantity they want to hold compared to overall portfolio (for ex: one may decide to limit the holding of that particular scrip to 10% of the overall portfolio).

My 2c. Hope this helps.


It depends. :slight_smile:

If you’re more on the deep value side, I.e. Classic Graham, Walter Schloss, Seth Klarman type investor then price absolutely matters and what you say makes total sense.

But new age style I.e that of Munger, and the newer Prof Bakshi etc is to simply bet on great businesses run by great managers and the price will take care of itself. (Because of second order effects, lasting growth, compounding).

So by itself, it’s neither good nor bad unless you know the investing style thoroughly well.

I personally fall into the first group so for me price is highly relevant. And by the way I’m not a fan of posting one’s portfolio online (you’re gonna be far more helpful by posting the analysis and contributing to the understanding of the business) but that’s my personal point of view.

1 Like

I believe for both style of investing whether it is value side or growth side the price is very important. The profit you make depends on the price at which you buy and price at which you sell. Even if you are growth investor if the price is already factored in growth of the company there is no point in buying it however good the company is. If you are doing investing individually you are here to beat the market then you need to buy it at the right price. Ultimately it boils down to what market cap you are buying the company and at what market cap you are selling it at is very relevant. So i feel as practice people should post the price at which they bought the stock when they post the portfolio. I believe this should be guideline for portfolio posting and recommendation at least in this forum.

1 Like