To Buy Or Not To Buy..... That is the Big Q

My first multibagger pick was Hindustan Ciba Geigy, which merged and demerged and I finally got shares of Novartis (India) Ltd. and Ciba Speciality Chemicals Ltd.. I purchased HCG at an average price of Rs.130 (Rs.10 paid up) and made very good money. I continue to hold both Novartis and Ciba Speciality. Yes, my holding period is more then 15 years, I suppose, but the return is also fabulous.

These type of valuations are difficult to find when the Sensex is at 9000 but still there are many stocks which can become five baggers at least. I am not a good timer of markets, i.e., I don't know whether one can buy at these levels or not, because when the sentiments become negative and markets fall then even good stocks suffer a lot. So, I can only search for good stories over a period of five to ten years but can't tell whether it is right to buy at current levels. Though, good stocks need not fall every time the market falls. I have purchased Gateway Distriparks at Rs.190 after which sensex corrected by 1500 points and all the midcaps and smallcaps were bleeding profusely. Gateway did not go below Rs.200 in fact when Nifty was at 2316.05 on 28th Oct 2005, Gateway was at Rs.218.55 (Source NSE). I am not that lucky every time market corrects, I too have fair share of losses but in the long run share prices of good stories always bounce back. I have purchased ICICI Bank at Rs.120 on 25th Oct. 2002 after which it went down to Rs.80, a fall of 33%, but today it is around Rs.570.

Moral of the story - Look for good stories with good management and have patience.