Most investors are too early to sell their winning stocks and too reluctant to let go of their losing stocks. This tendency is more pronounced when people get fixated on the stock price alone and forget about the quality of the underlying business.
I remember this conversation I once had with Ashish, my ex-colleague, a few years back.
“Man, stock market is too risky.” Ashish shook his head.
“What makes you say that?” I quizzed him.
“I bought DLF stocks in 2008 for 1 lakh, and now they’re down by 90 percent. But my DLF flat appreciated by 20 percent in the same time. Such an irony that it’s the same company where the stock is a loser, but their product is profitable. I sold the flat recently.” He said.
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