Review of Investment Strategy

Dear Blog Members,

We have gone through and seen lot of changes in economy and in stock market during past 3 years. We have seen rise of Nifty / Sensex from 7000 / 23000 points to 11000 / 36000 respectively. Our portfolios for last 3 years have also given good return 308% for 2015,  126% for 2016 and 48% for 2017.

https://dolly-bestpicks.blogspot.com/2018/01/happy-new-year-2018.html

We have also seen very rough market conditions when Nifty / Sensex fell continuously for more than 1000 / 3000 points respectively, it has happened in Aug - Sept 2015,  Jan - Feb 2106, Sept - Nov 2016 and Feb -March 2018. There was no any major market correction in 2017 and due to this reason our new blog members are very nervous during recent market correction.

Up till now total 29 stocks were suggested on the blog and two stocks  had given us the opportunity to review our investment decision and future strategy. Surana Solar was due to change in government policy and Omkar Speciality Chemicals is due management issue.

I have not given open sell call for any stock because it will initiate stampede selling and it will result in continuous lower circuits. Generally I used to give very clear indication under reply to the comments so that regular blog readers can able to take the action accordingly on time with minimum or without any financial loss. In the past few months we have seen lot of readers keep on posting repeated comments without reading the past replies on Omkar Speciality and Lasa. It has created negative sentiment and stock has corrected severely. For example below comments and replies are clear enough to understand our action.

9 Feb, 2018 CMP  -  Omkar 45 and Lasa 148 = 193

12 Feb, 2018 CMP  -  Omkar 45 and Lasa 155 = 200

24 April, 2018 CMP  -  Omkar 23 and Lasa 90 = 113

It has given good learning to us and we are going with few changes in our investment strategy. It will give very clear guide line on required action on time without any confusion to our blog members. Our prime aim is to protect and minimize the  risk on our investment with fair possibility of decent gain.

Below points are basic investment guide-lines for our all blog members

1) Investment in stock market is subjected to significant risk so investors must be aware of it.  I always try to suggest the stocks with strong product base and good future growth possibilities, at the price level where chances of further correction is very less. Generally every investor expect stock price correction before buying  the stock but don't want any correction after purchase. The real fact is that no one knows the bottom of market so chance of further correction cannot be ruled out. Even though I have replied to several comments on Omkar but  we cannot expect  that every blog member will able to book the profit on time and exit on time in case of such issue. In the past we have not used stop - loss for our long investment but above situation of Omkar has given us good reason to use it to limit loss even on long-term investment.

We will use stop-loss 30% from suggested price. For example if suggested price of any stock is Rs 100 and in case if it correct below Rs 70 then need to book loss without any confusion or doubt. 

2) Normal buying range will remain same + / - 10% from suggested price. For example if suggested price of any stock is Rs 100 than buy it between 110 - 90.

3) Prefer allocation 10 - 20% for each stock and book partial profit at 100% return. Keep the remaining free of cost shares for long term and reinvest principal amount again. 

4) In normal condition, need to stick with investment decision for 3 years. It means that if any stock unable to give at least 100% return in 3 years than we have to sell it and reinvest it again in some other stocks. In case stock has given above 100% return than we can hold free of cost shares for further gain and reinvest principal amount again.  Now it is applicable on 2015 suggested stocks but all these stocks were able to give 100% return. 

5) Our expectation from every suggested stock is 300 % in 3 - 5 years. But in case of non-performing stocks we must take action in 3 years as mentioned under point 4.

6) In any case we must be able to reinvest our principal amount again in 3 years. It is not advisable to buy any non-moving stock after 3 years even though it is trading with in buying range. It means that any stock suggestion is valid only for 3 years or it got re-suggested again with modified target.

7) If you have taken the decision to become successful investor than always be happy and never regret on any decision but learn from every right or wrong decision.