Sunday, May 22, 2016

Why Chandu Still Hold Vinyl Chemicals After 586% Profits? ( Part 11 of Chandu Story)

This part is part 11 of my popular Chandu story.
This story can teach my full theory of stock market.
New reader, please start it from part 1
Link to part 1 is:-
I recommended Vinyl Chemicals on 19.05.2013 @ 9  per share
Read this earlier article here:-
That time the base price of "Vinyl Chemicals" was 11.58, Net sale per share 115.32, and Book value was 22.82.
If you read my earlier articles or read my book, then you knew " How to calculate the fundamental target price of any stock?"
So fundamental target price of Vinyl Chemicals was
(Base price 11.58+ book value 22.82+ net sale per share 115.32)/3
Final correction 10% (Read my book for detail)
So 44.91 was fundamental target price of vinyl chemicals 
Now see price history of vinyl chemicals after my recommendation:-
You find that in above article of vinyl chemicals I give a short term target 11+ which this stock achieved within eight days and traded @ 12.35 on 28 May 2016
But If you read my Chandu story from starting then you may know that Chandu does not sell his stocks below one year and after one year he will track target price with trailing stop loss watch this youtube video for more profound understanding of trailing stop loss:-

So if you download above excel sheet of vinyl chemical price list and carefully observe column O P and E, then you may understand that vinyl chemical was not hit his trailing stop loss yet so Chandu hold it since last three years.
CMP of Vinyl Chemicals (India) Ltd is 61.75 so Chandu is on 586% profits but due to my trailing stop loss strategy for stock in profits ( Which you watch in above youtube video) Chandu still holds this share and get three tax-free dividends during his last three-year holding.
Read part 3 of this story again where Chandu buy 524 shares of vinyl chemicals:-
So as per this past dividend history:-
EX DatePurpose
14/08/2015Dividend 1.50
08/09/2014Dividend 1.00
10/07/2013Dividend 0.80

Chandu gets 0.80+ 1.00+1.50= total 3.30 rupees per share dividends during last three years means Chandu earn 524*3.30=1729.20 tax-free dividend income on his initial investment of 5054 and market value of his investment is 524*61.75=32357.
This year Vinyl Chemicals (India) Ltd also declare 1.50 rupee per share dividend read this news here:-
So on the record date, Chandu will get 524*1.5=INR 786 as the dividend.
Chandu euphoric to see this holy figure 786 and Chandu plan to spend this dividend income for buying a saree for Chinki So Chandu already order a saree for Chinki from Amazon.
Here is the Amazon link where Chandu order a saree for Chinki:-

So Chandu total dividend income is 1729.20+786=2515.20
I think this story can teach you about selling strategy of stocks.

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