To catch a falling knife

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  #1  
Old 2nd June 2006, 08:33 AM
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huineng is on a distinguished road
Default To catch a falling knife



ITC is selling for 160.15 and Wipro for 444.7. I am thinking of buying these shares. I can hold them for 1year or more. Any advice?

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  #2  
Old 2nd June 2006, 08:44 AM
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Czar is on a distinguished road
Default Re: To catch a falling knife

ouch will be the reaction when we try catching that knife...

something I wrote somewhere, not specific to you but here goes:

I really dont understand why people are now eager to know where market will be... you have to wait & see where it bottoms...its anyones gues work, please note noone I MEAN no one can tell you that...may be tomorrow or next year maybe at 9K or 3K so be patient & wait & dont try to jump & think you'll be left out...

listen to both bull & bears & avoid cathing a falling knife.. if the bull run is to go on do you think 500 odds point if you miss the rally you will die ??? but if you are wrong in calling the bottom...you surely will... socho samjo...

But if the bull run is over...In the long run we all are dead is the saying...

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  #3  
Old 2nd June 2006, 09:04 AM
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pkjha30 will become famous soon enough
Default Re: To catch a falling knife

Hi huieneng

Heed the advice of Czar. You catch it when it is all over. May be you can get more shares for you buck.

Money saved is money earned.

Pankaj

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  #4  
Old 2nd June 2006, 07:42 PM
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huineng is on a distinguished road
Default Re: To catch a falling knife

OK. I will wait. Thanks for the advice.

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  #5  
Old 2nd June 2006, 08:49 PM
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rajesh.sadhanala is on a distinguished road
Default Re: To catch a falling knife

Quote:
Originally Posted by huineng
OK. I will wait. Thanks for the advice.

Hi,

Just putting up my point. When you are trying to find a bottom it is very tough, this is for the sake of long term investors. Short term traders pls ignore since we can clear see a break an intermediate uptrend.

So when find out the bottom is tough, we need to draw a strategy where we accumulate at different levels since we dont know the bottom. You are quoting 2 stocks where fundementals are good and it is fair enough price for it. It may or may not be a fair price but when you made up ur mind that it is a better price to buy then put up 20% of ur investment where u felt bottom to decrease the risk rather than 100%.

ITC@ 160 is the fair price to get but we dont know where the markets are heading to it may lead to any levels god knows, So its either wait and watch game or enter only a % where the risk could be lower.

Hope I made some sense of it.

Regards
Raj

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  #6  
Old 2nd June 2006, 11:07 PM
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pkjha30 will become famous soon enough
Default Re: To catch a falling knife

Hi Just To add my bit
in 1929 Market went from 60 to 381.17 and took less than one year to go back to below 60 and took 25 years to surpass the peak reached in 1929.
Dow jones.

Are we heading for the same fate. I think not. But it is always a better idea to have cash ready when needed and limit the loss. A 50% fall needs 100% upside just to cover the loss.

Just check where any stock was when Index was at 7300 or 6500. That would be nice to enter. but still 4500 is lot more better if you still have cash. Am I sounding pessimistic. No it is pragmatic. Defend the market with all might and beat them at their game. Somebody has to buy and somebody has to sell.

pankaj


Last edited by pkjha30 : 2nd June 2006 at 11:15 PM.
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