General Trading Chat

sudoku1

Well-Known Member
I may not be active as before for a couple reasons.The one I see is illiquidity in here.Traderji doesn't seem active compared to what it was when before I took a break which makes too many posts from a single member as spamming or going it alone or a kind of self talk.will butt in at regular intervals or so
 

vivektrader

In persuit of financial independence.
Holding a small basket of stocks which have rewarded me handsomely..

HEG
Graphite
Rain
Radico

BUTTERFLY
MIRC ELECTRONICS
GODAVARI POWER
VAKRANGEE
Can you share some of the virtues which you look for while selecting portfolio stocks.
Thanks

Vivek
 

simplebuthard

Working as Trading Assistant. Hire me !!
Vivektrader and SmartTrade , both mentioned valid points here.

As Vivektrader sir said, the compounding returns can be better translated in investing compared to trading as because scaling capital is very tough in trading.

Smart trade sir clearly said investing is what can make rag to riches but the source of investing capital can be accumulated through trading if someone doesn't have any other income source.

Few of my inputs from self experience here:

1. The reason we can become rich in long term basis in investing better compared to trading is, in my view "providing value".

Somewhere read Warren Buffett said he looks for value in anything, stocks, companies, assets etc. Whatever the instrument may be, but if it provides value to people it could be to mass or to a segment, but as long as it provides value we can count it in long term basis. He even find Gold as not producing value and not suitable for investing.

We don't need to oppose Warren buffett on his Gold opinion, because we clearly see over the years, Gold prices appreciates only up to the inflation term, not anything more while few stocks become unimaginable multibaggers.

Even as an investor what we doing is, we provide some value to the company so that they can keep on working on their terms, ideas. Thats why we become rich or our money becomes mutiple because we provide some value there.

So in trading what happens is, we clearly don't provide any value to anyone, (may be to Govt :) because they charge hefty taxes in each contract sheet). We just look for some margin (difference between buysell, we call it as profit) nothing providing value to any stock, company or to anybody else.

Even I read somewhere that Dhirubhai ambani liked the first profits he received from buying a tin of groundnut oil and selling it in road side for a margin. He liked and continued doing many buy and sells for a margin and later his yemen job gave the idea of oil refinery where even the margins are very bigger.

So to write in short, one should clearly need a capital to invest to become rich. For that capital need, we should hunt for margins like a professional hunter with thrust, aim and execute.

There is nothing wrong in hunting for margins (for raising investing capital) in trading field. These observations in fact bring calmness in my mind while trading because we here in trading only looking for margins or say profits which is reasonable and nothing kind of becoming a millionaire via buying call/put options.

such reasonable expectation put us in calm status and trade for a realistic goal. Simply said, there is a way here to become rich, that is stock investing, as such way is there, there is no necessary for looking for riches through trading.

To mention in numbers, such margins or needed capital for investing, must be around 1 to 10 lacs per month at least, else even through investing it would become hard to hit 100 cr clubs in future!!! So look for income source of 2 to 5 lacs per month, it may be trading or your any other business and invest it in stocks with careful selections.!!!

All the best for sudoku1 sir in his rags to riches journey, and not just sudoku1 sir, but for all of you because everyone is here looking for that only!!!:)
 

sudoku1

Well-Known Member
Can you share some of the virtues which you look for while selecting portfolio stocks.
Thanks

Vivek
Sure Vivek,My core criteria lies in identifying the industries which are likely to beat the market in the midcaps n smallcap segment only.Large caps do Offer appreciation n security but for you to make it big in the long run ,leave them.

No of stocks is strictly not more then 12 with equal weightage assigned to every stock n not more than 2 stocks from a single industry.

The selected stocks should have outperformed the smallcap index in the 6 months period because I believe I don't want to bet on an injured horse.

The 3 rd criteria is looking at the 6 month data only of price,volume,fancy n so on.you would be surprised if I tell you that I pay least attention to what the company has delivered in the past .For that I level my ears to the ground on what's developing for that industry in India n abroad.For example I identified the electrode industry on the basis of China news that they are curbing down this industry on pollution grounds which quickly translates to shift in demand.

Once the industry is identified, 2 small or midcap stocks are picked which have outperformed their own industry n BSE SMALLCAP INDEX.In this case I identified HEG at 600 GRAPHITE at 300 n rest you know is history.
Now if suppose I find a new set of stocks,I kick out the slow pair from my portfolio to welcome the new one.

IN terms of allocation,I divide my in investible amount into 4 parts .For example if I have to allocate 80 thousand for a stock I would allocate 20 thousand right away.the next trench at 10 percent fall then 20 n 30 % from the top.
In this way I don't have to worry to where my stock is headed down n in fact provides me an opportunity. In both the above stock I have exhausted my 3 parts
 

vivektrader

In persuit of financial independence.
Sure Vivek,My core criteria lies in identifying the industries which are likely to beat the market in the midcaps n smallcap segment only.Large caps do Offer appreciation n security but for you to make it big in the long run ,leave them.

No of stocks is strictly not more then 12 with equal weightage assigned to every stock n not more than 2 stocks from a single industry.

The selected stocks should have outperformed the smallcap index in the 6 months period because I believe I don't want to bet on an injured horse.

The 3 rd criteria is looking at the 6 month data only of price,volume,fancy n so on.you would be surprised if I tell you that I pay least attention to what the company has delivered in the past .For that I level my ears to the ground on what's developing for that industry in India n abroad.For example I identified the electrode industry on the basis of China news that they are curbing down this industry on pollution grounds which quickly translates to shift in demand.

Once the industry is identified, 2 small or midcap stocks are picked which have outperformed their own industry n BSE SMALLCAP INDEX.In this case I identified HEG at 600 GRAPHITE at 300 n rest you know is history.
Now if suppose I find a new set of stocks,I kick out the slow pair from my portfolio to welcome the new one.

IN terms of allocation,I divide my in investible amount into 4 parts .For example if I have to allocate 80 thousand for a stock I would allocate 20 thousand right away.the next trench at 10 percent fall then 20 n 30 % from the top.
In this way I don't have to worry to where my stock is headed down n in fact provides me an opportunity. In both the above stock I have exhausted my 3 parts
Thanks for detailed response sir, your portfolio has produced stupendous results.
Well, how do you plan to liquidate a particular stock after it has moved quite a bit, any profit taking targets?
And secondly how big a capital do you think should be put to work for this small and midcap portfolio?

Vivek
 

sudoku1

Well-Known Member
Thanks for detailed response sir, your portfolio has produced stupendous results.
Well, how do you plan to liquidate a particular stock after it has moved quite a bit, any profit taking targets?
And secondly how big a capital do you think should be put to work for this small and midcap portfolio?

Vivek
Good question Vivek.On profit booking ,I liquidate a laggard pair only when I find a new one to replace them so it's staying invested 365 by 7.
For example I identified MIRC n BUTTERFLY last month n so kicked out the reality pair of Kolte Patil n Sunteck as their performance was slowing down
 

sudoku1

Well-Known Member
Thanks for detailed response sir, your portfolio has produced stupendous results.
Well, how do you plan to liquidate a particular stock after it has moved quite a bit, any profit taking targets?
And secondly how big a capital do you think should be put to work for this small and midcap portfolio?

Vivek
One imp criteria to be mentioned.
Any particular stock should be a part of at least 1 index or sectoral index or a group A or B on Bse .
 
Good question Vivek.On profit booking ,I liquidate a laggard pair only when I find a new one to replace them so it's staying invested 365 by 7.
For example I identified MIRC n BUTTERFLY last month n so kicked out the reality pair of Kolte Patil n Sunteck as their performance was slowing down


When you sell a stock within one year and buy a new one,that will attract short term capital gain.....any thought on that ?or you plan to hold it for minimum 1 year to make it LTG except in cases where you think that the selection is wrong and you want to get out irrespective of taxation ?

Smart_trade
 

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