Thoda Aur

Investing in Vodafone Idea when it’s in losses

When we were young we must have seen the Hutch Ad. It was the first time anyone saw a Pug. The dog which followed the kid wherever he went. When Vodafone acquired Hutch I was very disappointed. Later it came out with Zoozoo and it was a huge hit. The same company which gave superb hits are in the ruins now. The stock price which was once around Rs.100 and above is now at less than Rs.6/-. 

The immense competition put up by Reliance Jio consolidated the telecom industry. Companies like Uninor, Aircel and RPG were thrown out of the game. Vodafone was about to join this category, but somehow because of its strong presence outside India it’s still managing to stay in the Indian business. 

What is a party fund?

With all the odds again Vodafone I still decided to buy a considerable amount of shares of Vodafone. As CA Rachana Ranade calls it – this investment is called a party fund. A party fund is a small amount that we spend when we go out for a party. We don’t think twice about spending that amount and we do not expect any returns out of it too. 

Similarly, I also bought the shares of Vodafone with this little amount. The point to be noted is that this was a small amount of money. God forbid if this money results in loss still I won’t cost negative value in my portfolio. Because I did not expect anything out of this investment in the first place. Just like everyone I have also invested in Vodafone India when I heard that Google is in talks to invest. 

The Google deal might or might not work out. But if it does then the prices of the shares will soar. This is almost like a gamble. But in this gamble, I have already limited my risk by spending only a small amount. 

This is an example of how small and inexpensive investments can turn the table. But it is important not to be greedy and not to be emotional. Play safe and invest wisely.

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