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A case in point: Hawells India
Five or six years ago, our electrician recommended Hawells switches, cables and other electrical fittings. I thought Hawells was a big company.
When I checked the stock prices of the company, it was around Rs.15 per share. Now, the stock is trading for Rs.450. I didn't buy the stock then. If I invested just Rs 1500, I would have Rs 45,000 today. That is, my investment would have grown by 3000% in less than ten years.
Needless to say, I didn't invest anything and I didn't get anything. However, now I know one thing. If you can find a company that sells good products, that company is worth buying. Sweeter is the deal if the company comes as penny stock (a term for shares being sold at dirt cheap prices).
I did look for a few penny stocks, but didn't feel comfortable about most of them. However, I decided to earmark five percentage of my investments for penny stock only. If I get just one stock that grows by 3000%, my whole portfolio would benefit.
Maybe, if I see some success, I'd increase it to 10% or even 20%. That is good business, right?
