Keeping track of your investments – It’s a good habit

Keeping close track of your stocks is indeed a good habit just as good neighbours keep track of  their neighbours movements, some of them Call Centre type 24x7!

So, friends,  good to know that you keep track of your investments. But, try not to be very emotional when dealing with stocks. Human nature is such that when news is good people are happy and when news is bad, people sell even good stocks out of sheer panic. Best recent example is Aban Offshore whose oil rig " Aban Pearl" sank a few months back in the Carribean Sea. Many firms at that time said in a note, downgrading the stock to "sell" from "buy." This was one of the best assets for the company with a day rate of $385,000, which is the second highest revenue for the company in day rate terms. Yes, Aban's stock price did take a beating but it bounced back pretty fast - after all there are very few companies in India who have business model like that of Aban. 

Remember : a good company is not necessarily a good investment. Case in point: At Rs.229.50 Bharti Airtel was a good company and a good investment too. If you did not buy it then why you buy today at Rs.365.15 [ today’s closing price] I am not suggesting that you should not buy Bharti at current levels but I am only saying that Bharti was indeed a Value Buy at Rs. 229 -240 levels.

Friends, once you are convinced and confident of your investment then you should not be too very emotional with news items whether its good or bad -unless the news is relating to creditors/bankers who are out to slit the promoters throats  because they  are not  getting their dues or if a  company is on verge of  bankruptcy and there could be other reasons like sliding sales, sliding profits and rising costs. Or, more importantly if the owners are navigating in private jets and taking their family and friends and relatives on a World Tour and staying at Five Star hotel and all this they are doing at company's expense! Then, you need to sit up, take note and take instant action to dump the stock right away.

And I am sure that fans of HBJ Caps who have purchased Confidence Petroleum [ CP ] may be eagerly tracking the scrip off and on  and  its good to know  that you guys are doing so.

Friends, understand one thing very clearly : Confidence Petroleum is basically a good company and a good investment even  in the range of Rs.15-18 per share. And all the things that the company is  going to do in the near future like  raising authorized capital, going for GDR/ADR, borrowing Rs.500 crores from market and its plan to declare interim dividend in current fiscal are all positive signs and is good for long term health of company. By doing all this the stock will get greater visibility thereby driving up volumes and consequently driving  the stock price too  - yes, the price of CP will obviously yo-yo from time to time but that’s true for Intel,   SBI ,  Sinopec, Titan et all.

Conclusion: Just stay invested in Confidence Petroleum and hold it for 2-3 years to get excellent returns.

Kishor S. Khot, [Kishor@hbjcapital.com], Equity Strategist, HBJ Capital Services Pvt Ltd