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POSTED BY ON April 24, 2011 11:20 pm COMMENTS (2)
Hi ,
I started investment in equity when Market was at 21k and first share i bought was DLF @700+ ..but now we all know the story and performance of this share. I kept investing in this scrip and brought the avg. value to @416 and total investment in this script has gone par to 70k.
Please advice me what should i do.. should i investment more to bring the avg to further down or just keep holding this scrip.
Thanks,
VK
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Thanks Jagadess ..
@VK
Best option would be cut down your losses and get out of the loser. Consider loss as the fees paid to Mr.Market for the important lesson in investing: “Buy when others are fearful and sell when others are greedy”.
Consider yourself as buyer of the DLF shares at current situation which is characterized by
1. High interest rate and reluctance from banks&private equity to lend real estate companies make servicing the debt very difficult one.
2. Slackening retail demand due to the exorbitant pricing of the residential homes and also due to high interest rate for home loans from banks.
3. opaque land bank whose value is not known to anyone and absence of proper regulator to oversee the sector.
4. High PE of 42 even @ CMP. if u consider ur average price, then it is almost 70PE!!!!
Here i listed the cons of holding the scrip. likewise u can list down ur pros and cons of the scrip. If Pros exceeds the con then hold on to the scrip, otherwise cut your losses and get rid of it.
May be reading this pdf from PPFAS.com on behavioral aspect about feeling towards losses will be helpful to take informed decision – https://www.ppfas.com/pdf-docs/b-finance/feelings-towards-losses.pdf
Put ur views about this
With regards
Jagadees