Before I go ahead, let me declare that Tata Steel has a comfortable place in my dividend, thus long term, portfolio. I have explained my expectations from a dividend portfolio here. Currently I am sitting on a handsome capital gain with respect to Tata Steel. Now the question is what should I be doing today? Today Tata Steel is going to declare its first quarter results and one doesn't need to be a genius to know that results will be bad. Reason! None of the steel companies have reported profit in the current result season and it is a commodity business, Tata Steel may not do much different. I am sure I will lose 5%-10% in terms of capital reduction today.
Given that this stock is for my long term portfolio, I am not willing to trade my long term vision for 5%-10% change. I will slightly add up my positions. Rationale? If input costs shoot up, these companies will no longer be doing charity, they will increase the price to adjust and Tata Steel being the most respected and the largest will have a cake walk.
Since I thoroughly believe that it will give me double benefit ( good dividend & good capital appreciation) adding up when the prices come down will give me good dividend yield and good capital appreciation.
Update:13/08/2010
Results were as expected. Not very good. I stuck to what I said, I was jumping with joy when people sold it to me at 500.
Given that this stock is for my long term portfolio, I am not willing to trade my long term vision for 5%-10% change. I will slightly add up my positions. Rationale? If input costs shoot up, these companies will no longer be doing charity, they will increase the price to adjust and Tata Steel being the most respected and the largest will have a cake walk.
Since I thoroughly believe that it will give me double benefit ( good dividend & good capital appreciation) adding up when the prices come down will give me good dividend yield and good capital appreciation.
Update:13/08/2010
Results were as expected. Not very good. I stuck to what I said, I was jumping with joy when people sold it to me at 500.
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