This is an old idea – many people have said it. Particularly Peter Lynch has said this many times – buy things you are familiar with, what you cannot describe in a picture is not worth buying, etc.

There is of course a lot of justification to own shares like Gillette, Colgate, Hindustan Unilever, ITC, Cadbury, Kodak, etc. (Alas! Cadbury and Kodak are not available in India any longer – once upon a time you could have bought it.

The logic for this suggestion is – should you buy things which disappear or something that grows and feeds you? So if a Mahindra Holiday Resorts salesman convinces you to buy the Holiday scheme and you do buy it, Congrats.

Spare some money to buy Mahindra Holiday Resorts shares also! The holiday is an expense (which will vanish) and the equity shares are an investment. However at the current price of Rs. 520, I think it is more than fairly valued – please decide at what price YOU are willing to buy.

PS: I personally do not hold Mahindra Holiday Resorts but the share is present in my father and wife’s portfolios. Bought at various prices, sold, bought again, etc.

Here is a similar thought from –

http://www.fool.com/retirement/general/2010/04/30/buy-the-stock-not-the-product.aspx