Markets is such a unique, risky and multi-faceted place! On one hand we have growth, momentum, value investing and on other hands we have some stocks where its impossible to fathom when and why they rise or fall.
After getting intrigued by this Tata group stock TTML and having seen its stupendous rise from around Rs 2 to Rs 35, I took a tracking position at around Rs 35. This was also because of a change I brought about in my investing strategy - NEVER TO WRITE OFF ANY BUSINESS OR SECTOR OR COMPANY. ALWAYS BE OPEN TO RE-EVALUATION.
Within few months, this stock started flying like no tomorrow, giving me no chance to build a position but it kept flying and I kept onboarded till its peak of Rs 290, when it formed around 2% of my portfolio from an insignificant tracking position.
At around Rs 290, there were some news around its business when then started the dramatic fall.
Meanwhile I forgot to mention that a dramatic fall happened in between this journey also when I tried to sell at around Rs. 150 but could not because of circuit and then it again started rising.
So, from Rs 290, i was convinced that I should sell it now but coudnt yet again as it was in ckt for 2 continuous week only to give an opportunity at same around rs 150 when I made the exit.
- Never to write off any business
- Remember why you bought - I did not buy for momentum or to ride the up move. I simply bought due to improvement in business because of a clear direction and execution from Tata group. Maybe thats why I could held it from 35 to 290 in around 3 months
- This one is new for me - Even if you bought for fundamental long term investing and not to trade, but if in case you get caught up in a company whose share price movement is not driven by pure fundamentals - then have a quick exit strategy.
- I have no clue had I followed above point 3 learning then I would have exited around the top or even earlier - So, no matter what the learnings, what the strategy - You dont know what you do in such bizzare cases.
- Such cases, events and results should have absolutely 0 result on our way of looking at markets or expectations from it. A 4 bagger in 3 months is in no way important or significant or of any meaning to me as it was not in my control and neither why I made the investment in the first place (Also, I could have got stuck at the losing end and that should also not make me complaining of the market as market has plenty of other efficient companies). Rather, if this same company after these roller coaster rides goes on to become one of jewel of Tata group in a decade or more, then I am on the losing end by making the exit.
- This brings me to Point 1 yet again - Never to write-off any business…ever.
Disc: Had tracking position in TTML and sold. Tracking again, hence biased. This is no buy/sell recommendation. I can be wrong in all my assessments