Lots of investors are facing huge unrealized losses now and this may increase further in the next few weeks. Even I have a 30% unrealized loss at present.
My question is most of us are expecting to recover at least our capital when the market picks up and some are expecting to make a profit as well.
Is this realistic, can we expect to recover a loss between 30-50% when the market turns and roughly how long should we have to wait for this.
Could anyone who has faced similar situation tell us if s/he managed to recover the capital and how long it took them.
Can you recover losses 30-50%?
It all depends on your holding power , patience and the quality of the shares you hold. ( leaving out the fact
that at any given time certain shares can be manipulated to have runs from 50-100% as we seen many times).
How long is a question but when ever it happens ( we hope the upward trend happens within this year but cannot say when right now. In the past, during difficult times, I lost 60% on certain shares but after holding with patience, I gained 200-300% )
and if you hold companies which are trading at considerable discounts to market and their sector PEs, they can bring 30% return easily if it has a proper run
. Key is to identify such share which has higher probability.
According to my understanding, we do not have to be hopeful of market recovering 30% for our shares to recover 30% if we hold the right shares. Certain shares can run faster than ASI when it recovers. Also opposite maybe possible.
1) say you bought a share at Rs 100 , 10 months ago. But now it is Rs 50. We should not expect it to run to Rs 100 again ( becaue it was rs 100) unless it is undervalued to current market and sector . Why? When you bought at Rs 100 it might have been overvalued by far . Maybe now it corrected to Rs 50 with fair value. So again it going to Rs 100 may not be feasible to expect.
2) Say you bought a share, at Rs 150. Now it is Rs 90. But it is undervalued to market . ( for example say PE is 5, NAv is 1.2). When it recovers it can even recover to100-200% beating the all time high.
It all depends on the share, it values and it investor strength.
So what I suggest is first evaluate the shares you have. Sometimes it better to dispose weak shares and then rotate to stronger one which can give higher return when market recovers
ps : Also some members in the forum preferred to stay out of market until an uptrend is confirmed. I am presuming this is not an option for you to sell completely now as you have 30-50% losses already?