I read your book " The Winning Theory in Stock Market" thank you for such a book that explains many things in simple terms with few pages.
One thing I noticed in book and the recent recommendations from the blog is you have an excellent entry strategy but at least for a beginner like me is not able to deduce the exit strategy.
Could you please teach me the criteria for holding a stock beyond it's 15% profit target, or say how to identify a stock is multibagger or not.
How do we decide which exit strategy to follow out of
- Target price of 15% profit from entry price
- 20% + of Base price
- Predicted target price - 20% + of base price or predicted target price(TP = (NSP+Book value+Base Price)/3 ) takes precedence under what circumstance.
* NSP is Net sell per share in one year.
In lesson 8 it's been written Do not buy a stock falls more than 50% from year high and rise 100% more than year low avoid stock 20% above its base price avoid stock traded below 1 year NSP. Is these conditions are valid on CMP price or for a specified time frame?; say avoid if the stock traded below NSP in the last one year. I know you must very busy with your office work, stock research, and family; It would be a great help if you can respond to this email personally or vial blog so that whoever having similar doubts would get a clear idea. Thanks John
Here is my reply and I publish this reply on this blog for help of other readers which have similer doubts about my theory.
1. Criteria to hold a stock beyond 15 % Profit:-
- If stock price up with volumes and market conditions are favorable for your stock.
- Normally I hold a stock minimum for 1 year and some of stock run more then 15% in this holding period for example I recommended and buy pricol ltd at 16.35 on 1 august 2013 read this article here http://www.maheshkaushik.com/2013/08/pricol-ltd-1635.html Now CMP of Pricol ltd is 46.65 and stock already give 185.23% profit to me so I sell it after 1 august 2014 when my minimum holding period is over for this stock
- One other great point to remember If stock price cross his net sell per share per year and traded 20% above base price then it is wise to book profits.
- Overall no any sure rule for exit it all depend on greed and your experience in share market.
- In my book I give these 3 exit strategy
- Predicted target price(TP = (NSPY+Book value+Base Price)/3 ) is best but Personally I not follow this after my holding of one year if my profit is above 15 % I book my profit because I rotate my money and book profits are always protectat us from downfalls.
- NSPY mean Net Selling Per Year(per share)