In recent interview, Rakesh Jhunjhunwala said that mid-caps have bottomed out and now is right time to invest. What are some good mid-cap stocks to buy?


In recent interview, Rakesh Jhunjhunwala said that mid-caps have bottomed out and now is right time to invest. What are some good mid-cap stocks to buy?

To hold on to the coat tails of Rakesh Jhunjuhnwala could be very dangerous to your pockets. He is a HNI, he dictates the price pattern. He knows when to enter and exit, you & I only will come to know after he does, by that time it could be too late. He has access to information to guide his decisions, you & I do not. He will not call you saying, “Hi, I am going to buy this stock. I am going to sell that stock”. Will he?
Rakesh J is not a god, he himself admitted that he sometimes made wrong choices. But then he has the prudence to exit and cut his losses.
If the recent experience is any indication, to bet on mid/small/micro caps is bad idea. Just recall what happened to graphite stocks. Countless SRIs are still caught there.
The Graphite India share price story
Leave aside the fundamentals of this company, look at only the share price behavior. After 5:1 split on 11/Dec/2006, the price closed at 59/-. From that date, till 31/12/2016, the price appreciated by just 14/- in 10 years!
What happened then? A couple of factories in China got closed due to pollution issues and lo, the price of Graphite India share sky-rocketed. It saw a peak of 1130/- in August 2018 and then begun to steadily & relentlessly fall. Now it trades at 280/- and is still falling!
You guessed it right! Large investors knew when to exit and they did. This current price is “hope” price, held up largely by Small Retail Investors, who got caught in Bull Trap! Just think of the guy who invested when the price was around the peak, a habit typical with SRIs.
Similar is the story of HEG.
No small retail investor - who has no access to information - should do that UNLESS 1) he has a fixed target, 2) watches the market like a hawk and 3) has the sense to exit when his target is reached.
I say that again, never ever try to ape professional investors and entities.
Come to think of it, I many times heard Rakesh J talk on Biz Channels. He talks a lot and tells precisely nothing. He is a smart Alec, he doesn’t give you even the time of the day!
I said this many times, I say once again - stock market is designed for big bull elephants. Small squirrels like us must take extreme care not to get trampled under their feet.

Comments

Post a Comment

Popular posts from this blog

3 Ways to Invest in Commodities in India stock market concept

Image
Invest in Commodities in India Recently, the price of crude oil went negative due to very low oil demand because of coronavirus. This very low price of crude oil aroused interest in many traders and investors to invest in crude oil. Not only just crude almost every commodity be it natural gas, copper, aluminium, etc are also trading at very low prices. In this post we will discuss 3 ways to invest in commodities in India. #1. Buy directly from MCX All you need is a commodity trading account, which almost every broker offers. Once you have activated the commodity trading account you can directly buy crude oil and also other commodities as well through your broker. The drawback here is that commodities are traded in derivative form, which means you can trade in them through futures and options contract, which have an expiry date. So this is more of a trading product and not an investment product as you can’t hold it for long without rollover. Just recently, since US...
Read more

Do you also believe that long-term investors make more money than day traders? Why and how?

Image
Do you also believe that long-term investors make more money than day traders? Why and how? There are a number of highly successful long-term investors. The likes of Warren Buffett and Charlie Munger instantly spring to mind. They have generally returned around 20% per annum over their investment careers. While this level of return is unlikely to make any investor rich in the short run, when compounded over a long period it can lead to significant returns. For example, over a 30-year time period it could propel an initial sum of money around 237 times higher. As such, even modest sums could become seven-figure portfolios. Of course, most investors may be unable to deliver returns which are as high as 20% per annum over a 30-year time period. However, even returns which are in line with those of the wider index could end up turning a small portfolio into a large one in the long run. For example, returns of 8% per annum over the course of three decades would equate to an end...
Read more

What is the shocking secret of Ratan Tata?

Image
What is the shocking secret of Ratan Tata? 1. 65% of his earnings goes to Charity:  Ratan Tata couldn’t place himself in the billionaire list because a large amount goes in the charitable trusts ( around 65% of his earnings). He is one of the most generous person in India. Salute to his great work. 2. Donates every year for education:  Ratan Tata is very known widely for his donation activities in the country and he also donates a huge amount in the education sector. He gave $50 million to Harvard Business school and $25 million to Cornell University, specially for the Indian students. 3. Parents got separated:  In the year 1940, Ratan Tata’s parents got separated and at that time he was just a 3-year old kid. After that he was looked after by his grandmother. 4. IBM offer:  When Ratan Tata completed his education, he got a job offer from IBM but he refused to take that job and joined his family business. 5. Education:  Ratan Tata stud...
Read more