Random musings of the dotcom doctor.......

Friday, May 25, 2007

Karuturi Stock Portfolio

This is my present stock holding percentage. I am heavily invested in the IT sector. Experts say, Don't Put All Your Eggs In One Basket. To put all your eggs in one basket is to risk losing everything all at one time. If you had a certain number of eggs, it would be safest to put those eggs in different baskets and not put them all in one basket. To put all your eggs in one basket would be to risk losing all of your eggs in case you drop that one basket. In short, If you put all your eggs into one basket, you put all your money to one sector. If it fails, you will have no other possibilities left.

I don't agree with this idiom in stock marketing. This old proverb about eggs in one basket applies well in some situations and not in others. Different people at different stages of development will have different views regarding putting all eggs in one basket. In stock market we should Put all Your Eggs in one Basket and Then Watch That Basket!!! If you want to super succeed, you should put all your eggs in one basket.

First I tried the diversification route and invested my money in almost all sectors I can think off. Then I realized that the profits I make in one sector(IT) are being leveled by losses in another sector(FMCG). IT sector is making lot more profits and so I am heavily invested in that sector. The remaining sectors creeped into my portfolio through IPO route, something like recent IPO's like Idea Cellular which are hard to resist. I just watch the IT sector every day in the media by reading the relevant articles from all major media sources. This means I placed thick cushions below my basket and also in between my eggs. So I am watching my single basket where almost all my eggs are located. I can smell the downtrend in the IT sector and so I know when to exit the market to book the profits.

If you know exactly what you are doing, you can create your own rules in the stock market. Only mavericks earn extremes in the stock market.

Be careful with the stock market and don't invest in this unless you are an expert trader. In stock market Timing is Everything. Only the guys who sell or buy at the right time succeed.

I will quote an experience of Issac Newton, the brilliant human being who invented the calculus and the theory of gravity.

And back in the spring of 1720, Sir Isaac Newton owned shares in the South Sea Company, the hottest stock in England. Sensing that the market was getting out of hand, the great physicist muttered that he “could calculate the motions of the heavenly bodies, but not the madness of the people.” Newton dumped his South Sea shares, pocketing a 100% profit totaling £7,000. But just months later, swept up in the wild enthusiasm of the market, Newton jumped back in at a much higher price—and lost £20,000 (or more than $3 million in today’s money). For the rest of his life, he forbade anyone to speak the words “South Sea” in his presence. (An excerpt from The Intelligent Investor by Benjamin Graham)

So what's your view? Drop a comment below.

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Dr. Subrahmanyam Karuturi

Dr. Subrahmanyam Karuturi , MD, FRSPH (London)

Consultant Physician, Infectious Diseases Specialist and Diabetologist at Kify Hospital

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