Piggy-Backing Billionaires

When I saw this Economic Times report that Ms Dolly Khanna (an Indian investor who has made several smart investments over the years, and earned the respect of the investing community) has added over 1% to her position in IFB Ind Ltd, I was curious. Having moved back to India just a short while ago, I am getting to understand what drives the market here. The first thing I did was to look at the price. Wow! The stock is up almost 4% at the time of writing, and is just Rs 3 shy of its all time high. Next, I saw where the stock was trading during the quarter ended Dec 2016, which is when Ms Khanna was reported to have added to her position.

Piggy-backing billionaire investors requires some thought. Are we buying at the right price? Is the marquee investor trading this stock, or is he there for the long run? Surely we don’t want to be buying when he/she is selling off his trading position! In case you didn’t know, Ms Dolly Khanna was reported to have cut her position in this very stock is the quarter ended September 2016 by 5.6% and increased her position in the final quarter of 2016.