Life seems a bit dull ? Thinking of adding some excitement. Thoughts of trying out something new. How about some speculation ? Gambling, no; but something close – investing in the stock market. Only Buffet could say that it was a simple process, almost boring; no one else will agree. Investing in the stock market is comparable to riding an emotional roller coaster.
When you buy the stocks of a company, technically you are investing in the underlying business and not just buying a XYZ ticker. So it is a business decision, you have invested in a company and you hope to partake in the profits generated by the company. Truth is far from it, though textbooks tell you to play it with due diligence and discipline, keeping emotions out; you know that investing is personal and emotional, esp if the decision was made solely by you. No advisers.
After much thought and deliberation, you decide to take the plunge and buy the stocks of one company. Immediately after you buy it, you seek a validation about your purchasing decision, was it at the right time, was it at the right price? And you seek validation from the stock market itself.
If a stock moves up just after you buy it, you get a sense of positivity, you feel good about the decision, you get a sense of assurance that your timing was right. But for me there was no positive feeling after I purchased this stock, the price started to spiral downward after the buy. Here is the stock trail of Apollo Hospitals.
The first thought that comes to mind after a downward revision in price is “I could have bought it cheaper, I should not have put in all my money in one go” Anticipating the worst, I try not to invest in one go, the price may slide further south. So I buy in tranches.
3 Nov 2016 (First buy) Stock price Rs. 1302/- 😀
4 Nov 2016 (Second buy) Stock price Rs. 1270/- 🙂
9 Nov 2016 (Third buy) Stock price Rs. 1253/- 😕
21 Nov 2016 (Fourth buy) Stock price Rs. 1187/- ☹️
27 Mar 2017 (Fifth buy) Stock price Rs. 1174/- 😳
29 Mar 2017 (Sixth buy) Stock price Rs. 1157/- 😤
6 Apr 2017 (Seventh buy) Stock price Rs. 1156/- 😟
11 Apr 2017 (Eight buy) Stock price Rs. 1188/- 😣
25 Apr 2017 (Ninth buy) Stock price Rs. 1176/- 😩
20 Sep 2017 (Tenth buy) Stock price Rs. 1067/- 😢
I had reached the maximum amount I was willing to invest in the company. The cost averaging had brought the average purchase price down to Rs. 1176/-
In 2018, it slid below Rs. 1000/-, the markets nose-dived. The investment was bleeding red. But you hang in there. The company has prospects, you receive the dividends and you believe in your decision. No use panicking and selling off, making a loss. It’s the cardinal mistake in the stock market, you buy high and sell low.
The company paid dividend of Rs. 6/- share in 2017 and Rs. 5/-share in 2018. Not much.
In Jan 2019, the company announced their Q3 numbers, a good show and the price started moving north. On 24 Jan 2019 Rs 1314/-, finally some shoots of green. Hope the momentum will continue.
Hope is in vain, as 2019 is going to be another choppy year for the markets because of the upcoming elections. Brace for more volatility. Below is the chart of the roller coaster so far.
Till next post, take care.