Dangerous game investors have started playing

Currently long-term investors have started playing a dangerous game wherein they are selling mutual funds to buy shares. The idea is not bad, but the market condition is wrong. The transaction is selling something which is high to buy something which is higher. Investors are not getting any bargain. In fact they are selling a low risk asset to buy a high risk asset. It is like getting down from bus and sitting on a sports bike on a wet and slippery road. Most investors have started comparing mutual fund returns with individual stock returns which is wrong. One cannot compare fruit salad with mango. Mutual funds are portfolios which try to optimize returns by diversifying risk. When you look at standard deviation (which no one does) of individual stock against that of mutual fund, the standard deviation of mutual funds is much lower as compared to that of stocks (standard deviation is a measure of risk)

I would like to advise this community of investors to avoid this dangerous game. Have clearly differentiate fund allocation between stocks and mutual funds. Money set aside for stocks must not flow into mutual funds and money allocated to mutual funds must not flow into stocks. Those feeling stocks are born to rise and bluechip companies are there forever please have a look at the below table. The below stocks were investor’s darling and everyone wanted to own them.

Sr. No.

Name of stock

Highest to lowest price

1

 Aban offshore

 5400 to 35.40

2

 Adlabs

 207 to 4.5

3

 Alok Ind

105 to 3.80

4

 Atlanta

 270 to 9.30

5

 Bartronics

 255 to 3.90

6

 Central Bank

 210 to 22

7

 Cox & King

 367 to 62.70

8

 DHFL

 690 to 62.90

9

 Dolphin offshore

 445 to 29.40

10

 Educomp

 1100 to 1.50

11

 Eros Int

 643 to 25.80

12

 Gati

 290 to 57

13

 GMR Infra

 124 to 14.80

14

 Goa Carbon

1185 to 340

15

 GTPL

180 to 58

16

 HDIL

 1100 to 14.50

17

 HEG

 4500 to 1320

18

 Hotel leela

 85 to 7.55

19

 IFCI

 114 to 7.65

20

 ILFS

 308 to 3.10

21

 IRB INFRA

310 to 93

22

 J&K Bank

 176 to 34.70

23

 Jain Irrigation

 264 to 25

24

 Jet Airways

 883 to 33

25

 JP Associates

 339 to 2.70

26

 JP Infra

 100 to 1.60

27

 JP Power

 140 to 1.90

28

 kohinoor food

 136 to 16.30

29

 Kwality

 225to 2.45

30

 LEEL Electricals

 340 to 7.30

31

 Lovable lingerie

 612 to 69

32

 Manpasand beverages

 500 to 28

33

 Mcleod Russel

 325 to 18.85

34

 MTNL

217 to 7.60

35

 Oil Country

 172 to 5.90

36

 On mobile

 361 to 31.15

37

 PC jewellers

 600 to 45

38

 Punj Llyod

 580 to 1.25

39

 R COM

 800 to 1.45

40

 R NAVAL

 117 to 3

41

 Rel Capital

 2924 to 62

42

 Rel Power

 430 to 4.15

43

 Reliance Infra

 2500 to 42.70

44

 Rolta

 375 to 5.45

45

 RS Software

 400 to 20.75

46

 Shree Renuka Sugar

 120 to 9

47

 Sintex Plastic Tech

 120 to 8

48

 Snowman logist

 130 to 29.50

49

 Subex

 725 to 5.80

50

 Suzlon

 400 to 3.35

51

 Uttam Galva

 172 to 7.55

52

 Vakrangee

 515 to 31

53

 Varroc Engineers

 1151 to 450

54

 Videocon

 760 to 1.70

55

 VIP Clothing

100 to 11.70

56

 Vodafone Idea

 118 to 11.35

57

 Windsor machines

 150 to 25.10

58

Jet Airways

 883 to 33

59

Mercator

 165 to 1.65

60

Patel Eng

 1020 to 18.80

Avoid the trap of selling low risk moderate return asset for high risk high return asset. The day market corrects you will not get a chance to sell even a single share of few low quality stocks.