the concept of holding stocks forever is actually wrong and does suffice....there are few reasons which i will jot down for the readers.....
when Stock prices are high and so is valuation then it is the right time to sell even if the company is the best company of the world....if you own a jewellery set which is the best and you have paid say Rs. 10,00,000/- for the set....and if you want to sell because people want to buy it....will people offer you the price of Rs. 50,00,000/-even if they want to desperately own it....no ways...for everything there is a price...but not foolish prices....so at high valuations to own the best company of the world is a foolish idea and immediately it has to be sold....
when the management deviates from its course and become overconfident and over adventurous and start buying companies double their nettworth...
also when the company management starts cheating the minority shareholders...
when the company starts accumulating too much debt....
transfers money to its other subsidiaries...
siphoned off money from the company...
when the fundamentals of the company takes a beating...
when Stock prices are high and so is valuation then it is the right time to sell even if the company is the best company of the world....if you own a jewellery set which is the best and you have paid say Rs. 10,00,000/- for the set....and if you want to sell because people want to buy it....will people offer you the price of Rs. 50,00,000/-even if they want to desperately own it....no ways...for everything there is a price...but not foolish prices....so at high valuations to own the best company of the world is a foolish idea and immediately it has to be sold....
when the management deviates from its course and become overconfident and over adventurous and start buying companies double their nettworth...
also when the company management starts cheating the minority shareholders...
when the company starts accumulating too much debt....
transfers money to its other subsidiaries...
siphoned off money from the company...
when the fundamentals of the company takes a beating...
No comments:
Post a Comment