Peter Lynch’s biggest mistake taught Raamdeo Agrawal this priceless lesson in investing.....

Recounting Peter Lynch’s biggest regret, stock market veteran Raamdeo Agrawal shares his valuable insights on investing in the stock markets.

Peter Lynch says, “My biggest mistake was that I always sold stocks way too early.”

One of the greatest investment gurus of all-time, Peter Lynch writes in his book, ‘One Up on Wall Street’– “Selling your winners and holding your losers is like cutting the flowers and watering the weeds.” This according to Peter Lynch, is the “greatest mistake” in his life. “My biggest mistake was that I always sold stocks way too early,” Peter Lynch often recalls. 

Recounting Peter Lynch’s biggest regret, the stock market veteran, Raamdeo Agrawal of Motilal Oswal advised investors to hold on to compounders to create long-term wealth. “Peter Lynch was asked what is your biggest learning of your investing career, and he said one of the biggest mistake he committed was that he sold all his stocks too soon. He bought Home Depot when they were four stores and he sold it the moment it tripled. After that it went almost 100 times more,” Raamdeo Agrawal told CNBC Tv18.

Raamdeo Agrawal says that great companies can create well beyond investor expectations. “Great companies, and there but are just handful of them right now – live much longer than what investors’ think and they create big money compared to so-called stocks which double in quick time,” Raamdeo Agrawal told the channel.

On similar lines, sharing his thoughts on Peter Lynch’s famous quote mentioned above, Mahesh Patil told ET Now, “ “In the markets, one always has a target price based on certain valuation parameters but we are not able to actually gauge how the future would hold for some of the good companies, they continue to do well and they might look expensive.”

The co-chief investment officer at Aditya Birla Sun Life MF advised investors to hold on to such stocks, as they may provide value. “There is always a temptation to really book profits in stocks once they reach a target price but as long as the compounding continues and as long as the companies continue to deliver, the compounding continues over a longer term as that will really create immense amount of value,” Mahesh Patil told the channel.

Motilal Oswal’s Raamdeo Agrawal is a regular attendee at the Berkshire Hathaway annual meeting in Omaha, since he met Warren Buffett for the first time in 1994. In a recent interview to ET Now, Raamdeo Agrawal revealed how Warren Buffett’s investment philosophy regarding diversification helped him to double his portfolio wealth in one year’s time. “I started buying stocks in 1980, so till about 1994, I used to think I am very smart guy and in my 10 crore portfolio, I had 200 stocks. More than 200 stocks, all sorts of junk were there, some good stocks were also there. Then I took one after I read Buffett first time. I cleaned up the portfolio and I had only 15 stocks that very year my portfolio doubled,” Raamdeo Agrawal had explained.

http://www.financialexpress.com/market/peter-lynchs-biggest-mistake-taught-raamdeo-agrawal-this-priceless-lesson-in-investing/967055/