Monday, May 4, 2009

I Booked Profits!

I know that right now several people want to jump into the market. The same people who were telling me they are not going to invest in ‘dangerous’ stock markets when the Sensex was below 8,000 today are very eager to jump in with all their money. It seems no matter how much we Happionaires try spreading knowledge, there will always be people who get blinded by greed. 

I booked profits in several of my investments made barely a few months ago. As shared earlier I had been buying into a group of stocks at the lows. I even partially booked profits in the company shared with all of you in Cash The Crash. I made over 38% in it, just in a couple of months. Overall the average returns have been 45-50% across line. 

But why did I exit so quickly? Am I not a long term investor? Are these companies bad investments? 

The companies I invested in are still fundamentally strong for the longer term and India is still one of the best places to be invested in. The simple reason is that most of these stocks rallied very quickly and today the scenario is very different from what is used to be earlier. 

This rally has given me an excellent chance to book profits and at the same time I know I will get a chance to enter back at cheaper levels. Why should I lose out on my over 40% gains when I am sure markets will retreat soon? The global economy; especially America, hasn’t improved; instead things have become worse there. With Chrysler going bankrupt lakhs of more people will be jobless there and this will mean more mortgage defaults. I’m sure all of you might already be knowing how this works. (Remember how I shared the entire functioning of this toxic system to my aunt over pav bhaji and gulab jamuns in CTC?) 

In spite of this when markets rally, we need to understand that it is a good time to exit partially and book profits. The end of every rally ends in panic buying. Do you remember how everyday markets would rise 300-400 points before the Crash? Never panic buy or panic sell, it is a sign of a weak mind that can be controlled by external forces. 

All those who weren’t able to benefit from this quick rally, please don’t regret anything. Instead use it as a learning experience for the future. When the markets were low, most analysts across the board were speaking of eternal doom – now on the other hand suddenly all of them have changed colours. Ignore them and listen to your own heart and logic. I see a strong bull run that will be much bigger than what we have ever seen in the past, emerging in the next few years. I hope people don’t feel left out of it and benefit from it by investing in knowledge first. Based on my experience once markets fall a bit, quality investments that have the potential to give returns in excess of 500-800% can be picked up.  (Remember Bank of India?

History has told us that destiny keeps giving us opportunities to create wealth; it is up to us to stay alert and make the most of it. 

Keep smiling and keep sharing your ideas! 

Yogesh Chabria


Anonymous said...

This same thing had been confusing me and I too felt that with companies going bankrupt how can big funds say USA is out of trouble? I'm glad you have said it very well - we need to listen to ourselves. I didn't make lots of profits because I didn't buy at the lows, but I am getting to learn a lot.


karthik said...

Very good judgment. I too did the same. Just wanted to ask, what do you feel about these talks of bringing black black money from SWISS accounts to India? In Cash The Crash, you have also been bold and discussed black money. Please share your views on this latest development Mr. Chabria.

maya said...

I finished reading Cash The Crash. My husband had bought it and until now I had never read a book on finance. But after reading this, I have fallen in love with the Happionaire way and finance.

I wanted to know about what you mentioned at the end of the book in the coming soon section. My son is 11 and I would love to educate him on money and finance the Happionaire way. We would want him to join the family too. Please let me know what is in store for children?

kuldeep sinha said...

Dear Yogesh,

The thing about being a Happionaire is that it is something relevant to the entire family. Both your books I have given to my wife, daughter ,son and even my 65 year old father. Right from a 16 year old to a 65 year old can enjoy it.

I wanted to suggest you start a Happionaire TV show to reach more people. It will be both entertaining and educative. I am sure.

I too sold my holdings today after reading your views. I was blessed to have followed your views and invested in a blanced way without getting carried away by tips during the boom.

Thanks and keep the Happionaire movement growing!

Anonymous said...

Always nice to hear what you are doing. Glad I followed you once again. I fully agree with your logic, we can see markets correcting.

Anonymous said...

Good advice. Have exited and gone into gold as you suggested.