BY: HITESH PARIKH
An insurance agent asked above question to the prospective client when he argued that his wife can always marry again. I do not know the reply….but the agent got the business. 
Why I am asking you?
Over last 20 years I have observed unique psychology of a normal investors and unique characteristic of market. Let me deal with the psychology first.
Psychology of Normal Investor:-
When they listen / read from an expert that market will go up, they feel happy that prices of their loss making shares will also go up!! They hold their 90% loss making shares hoping when market goes up, they will at least get back their invested capital. But does this happen? Let us look at the unique characteristic of the market.
Behavior of market in last 20 years:-
In 1992, the theme was Cost Replacement…
Mr.Harshad Mehta arrived the price of ACC Rs.10000 based on his theory and market also believed him…what happened to the prices of Mazda, ACC and all other companies since then you know. In 1994, when first time FII investments were allowed, the sectors were capital goods and PSU IPOs. In 1995-96, the market was flooded with IPO of finance companies. The costliest IPO was of VLS Finance at Rs.510 per share. All listed companies started their finance companies…CIPLA started ALPIC Finance. I do not know what these companies are doing now.
1997 was the year for FMCG and Pharma companies…Hindustan Lever, Ponds, ITC, Colgate and Pharma companies were the darling of the market. Since then ITC or Hindustan lever or Colgate took 10 years to give positive returns.
1999-2000 were the year of IT and famous K-10 stocks…..HFCL quoted at Rs.2100 is available at Rs.20 now. DSQ Software, Silverline are difficult to find now. Even Infosys price of Rs.16000 per shares took 7 years and two bonuses to match.
2003-2007 were the years of Infrastructure, Housing, Capital goods & electric goods sector. Just see what is the position of housing and infra companies today?
Market Movement during 1992 to 2011:-
Market moved up from 4100 to 21000 odd levels in last 19 years. If we go by normal investor’s logic, all shares should have given them their capital back, forget about growing up 5 times!! But the fact is it has not happened.
The Fact of Market:-
I know quite a few couples who have married again to the same spouse after divorce but market do not marry again to the same sectors and same companies when the market goes to the next levels.
What is The Solution?
Get your portfolio evaluated from us at a small fees. We will tell you from your portfolio, whether the companies you hold has the potential to grow up in next bull-run or not? The best solution is to join our advisory services. We will evaluate your portfolio free of cost and also tell you where to invest for the next bull-run.
What Next?
I know you are investing your hard earned money. You have all the right to lose them the way you fit right. If you want to multiply your hard earned money, please join us.
Remember….It is the height of foolishness to go on doing what you have always done and expect different results.
