Let your winners run

May 30, 2024 3 min read

Hindustan Aeronautics Ltd : A Soaring Success

Hindustan Aeronautics Limited (HAL) has been a remarkable performer in the stock market, truly living up to its name by soaring high. The stock has seen an incredible rise from around Rs 400 to an impressive Rs 4800 in just a few years. At every stage, skeptics have doubted its ability to climb further, yet it has continued to defy expectations.

Breaking Through Market Doubts

Back in October or September 2021, HAL’s stock had risen from under Rs 400 to nearly Rs 700. Many believed that the stock had peaked and would soon fall. Contrary to these predictions, it surged further to nearly Rs 1200. Each subsequent milestone has been met with similar skepticism. From Rs 1200 to Rs 2000, then to Rs 3000, and now it stands strong at Rs 4821. Despite occasional dips, this stock has shown resilience and strong growth potential.

The Power of Momentum Investing

The structured momentum investing approach is a powerful strategy in such scenarios. Momentum investing focuses on buying stocks that are showing an upward price trend. This method eliminates the need for predicting which stock will be the standout performer. By investing in a diversified portfolio, one can capture significant gains from top-performing stocks while minimizing losses from underperformers.

Riding the Winning Stocks

In October 2022, HAL entered Mi NNF 10 strategy at around Rs 1200. At that time, there were doubts about how much more the stock could rise. However, the beauty of momentum investing is that it doesn’t rely on predictions. Instead, it rides the winning stocks as long as they continue to perform well. In this case, HAL has proven to be a major winner, increasing by 300% and still going strong.

Diversified Success Stories

Apart from HAL, other stocks have also demonstrated impressive performance. Stocks like Trent and Zomato have shown significant gains and are still being held in the portfolio. The previous year saw outstanding performances from Adani Energy, Adani Enterprise, and Varun Beverages, which also doubled in value. This diversified success underscores the importance of holding a varied portfolio to capture multiple high-performing stocks.

A Simple Yet Effective Strategy

The key to successful momentum investing is to stay with the winning stocks and exit when they show signs of slowing down. This strategy requires no emotional attachment or worries about industry-specific factors. The focus is solely on the stock’s performance. When a stock starts to slow down, it signals the time to exit and move to another promising stock. This straightforward approach ensures that the portfolio remains dynamic and continues to capture high returns.

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