Can you make BIG money in stocks? Here's the answer!
Investing in stocks and making it big is a game of cool and skill, says P V Subramanyam
The skill in the Investment Game is manifold. Keeping your cool from a Sensex level of 21000 to 9000 and then back to 21000 (or say 25,000 as it is at now) is not easy.
In fact keeping your cool from 2000 to 21000 over a 4-5 year period was not easy for most of us. Now again the index is at 25,000 (June 13, 2014). Let us say it goes to 35,000 in one year's time.
When this happens, as many bulls are betting it will, the questions to ask are:
~ Will you hold on to all your equities, in the same proportion as you did on June 12, 2014?
~ How would have you reacted to one share of yours (which you bought for Rs 9) becoming Rs 28? Will you worry about the tremendous jump and sell in JOY?
~ How would you react to a share of yours which has not gone up at all in the past one year when the index went up 40 per cent?
~ If your portfolio went up 32 per cent, and your friend's portfolio went up 60 per cent because of some smart mid cap (or commodity share like EiD parry -- a sugar manufacturer?)
~ You bought a share Sona Koyo for Rs 20, sold it at Rs 25 in a week's time – and then watched it go up to Rs 55. How will you react?
~ How much will the impact of Sona Koyo on your NEXT trade?
~ You bought a share at Rs 151, it fell to Rs 139, and you told yourself that it is a long term investment. Then you saw it go down to 126. How will you react? what if you sell at 126 and then watch it go to 170? Your reaction?
Ask yourself these questions before you start trading in a big way.
Photographs: Uttam Ghosh/Rediff.com