Thread by @KommawarSwapnil

Investing Is Easy
Is It Easy Then Trading ?

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Swing trading in cash is one the best trading for working class people.

Cash is king👑

Only few hold stocks for the long term and depend on person to person.

The most difficult skill in Investing is NOT the ability to find a great stock.

It is to know WHEN to sell the stock

Right?

Let me explain💹

We keep reading:

If you had invested money in xyz stock in 2010, you would have made so much wealth.

But what happens if you remove the benefit of hindsight.

Take Bajaj Finance for example.

The stock was available at Rs 7 (adjusted for bonuses / splits) in 2009.

Yes, you read that right!

Now assume someone bought it at 7.

Do you think they would have held on till today?

The investor would have seen the price go to 20, then 50, 100, 1000, 3000, 7000.

Also a decline from 4800 to 1800 in 2020.

At what point do you think the investor would have had enough?

Sitting tight on a stock is easier said than done.

Behavioral biases would not allow for it.

Add to that survivorship bias.

We keep talking about Infosys, HDFC Bank, Asian Paints, Bajaj Finance, Titan.

But for each of these, there is a Unitech, Punj Lloyd, Idea, Suzlon, Yes Bank, which promised gold but went to dust.

And others which seemingly were great but stopped going up at one point.

Whirlpool, Biocon, Maruti, Tata Motors, Lupin, Nerolac, Hero Moto, Godrej Industries, Sterlite Tech, Symphony, Avanti Feeds are some of the names that have a negative 5 year return as I write this.

How does one know when the stock has done enough.

So to me, the toughest skill in #investing is to know when to sell a stock.

You can learn a lot of concepts to identify great companies.

But only those who can master when to sell or to hold a stock can really create a process around wealth.

#investing
#stockmarkets
#Learning