What’s the right time to sell a stock? Jhunjhunwala has an answer

NEW DELHI: Should you sell a stock after it has delivered a smart 100 per cent return? Or should you hold on to a stock even when it is off its all-time highs?

While most investors would find these questions difficult to answer, ace investor Jhunjhunwala handles it with remarkable ease: “Not really.”

Addressing the FIFA Annual Meet, the Big Bull gave two examples to solve this dilemma. He said TitanNSE -0.53 %gave him 100 per cent return in three years, but he would still hold on to the stock as it would not be easy to replicate that success.

“If after a big rally, the scrip still gives me 15-18 per cent return over the next three years, why should I sell?” he asks.

Jhunjhunwala said he won’t sell a stock to look for the next multibagger. “Because that is not easy to replicate,” he said.

The ace investor said it is not that he keeps on buying a stock up to any valuation. But it also does not mean that if he has bought a stock at high valuation, he has no ability to hold on to it, if the stock takes a hit.

He noted that LupinNSE -2.58 % shares – whose cost of acquisition for him was just Rs 8 a share – went up to Rs 2,200 but the stock has fallen to Rs 820 level.

“Because I did not expect that from Lupin. It went up from Rs 600 to Rs 2,200 in three years. My judgment said Lupin will not penetrate Rs 1,400, Rs 1,500 on the downside. But I am still holding on, because I am bullish on the pharma industry and Lupin is one of the good players there,” he said.

Shareholding data suggests Jhunjhunwala has held on to Lupin in his portfolio since March 2003.

Jhunjhunwala said that just because he has earned a large quantum of wealth, it is only the success stories or the successful facts that are known.

“Nobody talks about my mistakes. Gaon hum ko shana samajhta hai, hume malum hai hum kitne gadhe hai (People think I am smart, but only I know what a fool I am). That is the reality of life,” Jhunjhunwala said.

He said life is not about regrets, life is about learnings.


Author: Lili