Magic of compounding -109 times in 10 years!
Printed From: The Equity Desk
Category: Market Strategies
Forum Name: Fundamental
Forum Discription: Discuss the operations and finances of any of your companies.Make the other participants aware on the investment opportunities available in a stock on PE free cash flow etc
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=922
Printed Date: 28/Apr/2024 at 6:03pm
Topic: Magic of compounding -109 times in 10 years!
Posted By: basant
Subject: Magic of compounding -109 times in 10 years!
Date Posted: 28/May/2007 at 12:32pm
I carry a copy this paper in my wallat and would suggest all Teddies to move to the bottom of the right hand corner in this chart. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
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Replies:
Posted By: investor
Date Posted: 28/May/2007 at 12:40pm
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Illustrates the "POWER OF COMPOUNDING" in very simple manner - Good post Basantji!
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
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Posted By: omshivaya
Date Posted: 28/May/2007 at 6:54pm
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Sir, very nice post. But as you yourself have said many a times, that at one go you can't see beyond 3 years. So, it is difficult for me to see a 60% CAGR for 10 years. Even if someone is a patient investor and plans to hold onto a group of good stocks for 10 years, can he in your opinion see beyond 3 years as you say?
He has to review on TED, after every 1 year or maybe 3 years how's the portfolio doing? ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: tigershark
Date Posted: 28/May/2007 at 7:46pm
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it is easy for a rupee to double , its also easy for2 rupees to become 100 but as the capital base increases then maintaining that 60% growth rate is a tough call although not impossible i suppose all investors will face this dilema so no wonder buffet has kept the compounding at 15-20% ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: kulman
Date Posted: 28/May/2007 at 8:37pm
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What Doctor Saab has mentioned is a valid point. The reality is that majority of the people fail even to achieve 15~20% CAGR consistently over longer periods. The reasons are mainly: Fear & Greed! ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: basant
Date Posted: 28/May/2007 at 9:00pm
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Now let us take it this way. If someone told an investor that DIsh Tv which is currently at Rs 130 should be close to Rs 210 in about one year 80% of people would say tell us something that can double in 3-6 months? That is tragic because an ignorant is trying to hit six sixes in an over when he has to get just 8 in an over.
Buffet achieved his returns in an economy that did not have sudden gush of air like Software, Telecom,Retail, Property, Media etc but here we are sitting at the cusp of change. Maybe in 3-4 years the horses would change but the endevour should be to choose faster horses rather then older ones.
If at all anyone can do that 60% CAGR it would come from a buy and hold strategy and by avoiding big mistakes.- I am pretty sure about that.The only mistake he can do is to lose the opportunity cost
I am be sounding confident but that confidence is not based upon hollow premise. We can generate that kind of return the idea is to look at companies which we can sit down with for 2-3 years. Actually it is not that simple but also not impossible.
Now for a 25% - 30% HDFC Bank is a no brainer. the problem starts when we start hitting that 50%-60% level on the ambition scale.
If we start taking that 10 year call then things would go wrong what we need to do is take small 2-3 year calls and then periodically monitor the situation.
A team that chases 350 to win in 50 overs tries to get 100 in the first 15 overs with not more then two wickets down. The wickets are our stocks/mistakes. Remember Buffet's call for a 20 hole punch card and no man should buy a 21st company in his entire lifetime. That is the need of the hour.
Personally I am a dreamer and I dream about my company's EPS 4-5 years hence even while I am walking on the road. I use my mobile as a calculator and every time I have nothing to do I am extrapolating the EPS....
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vivek Sukhani
Date Posted: 28/May/2007 at 9:12pm
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Sir, just a personal question.......am I not a misfit person to be on TED???? because I sometimes view myself as being an eye-sore in your eyes...
Regards,
Vivek
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Posted By: kulman
Date Posted: 28/May/2007 at 9:27pm
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You have said it very very nicely.
But as we know, fear & greed ...i.e. emotional aspects are the main things apart from backing good horses. Those big mistakes including loss of opportunity is what drags the returns.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: basant
Date Posted: 28/May/2007 at 9:47pm
The moment I take you to be an eyesore I would be an investor without conviction.
My style is married with time line. I cannot wait for 10 years with a Tata Investment or a sundaram Finace (could not find any other genuine value company); I am ready to lose 50% of my portfolio in my quest for a 10 bagger;but I am always on my toes calling every one who writes an article on my companies and getting his views, I attend investor camps like a mungeri just to see what opinion people have about the companies I own; taking views is never an issue implementing them mindlessly could get us into trouble - mostly.
Higher rates of return can come only by owing less stocks or through speculation. A diversified portfolio (akin to the index) is not the best idea to generate high returns.
All said an done this is a strategy to make a lot of money in a very short period of time and obviously it comes with its risks.  ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: omshivaya
Date Posted: 28/May/2007 at 10:00pm
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Vivek ji: Variety is the spice of life!
Basant jee: "If we start taking that 10 year call then things would go wrong what we need to do is take small 2-3 year calls and then periodically monitor the situation."
Basant jee: Can someone afford to make mistakes on a 10 year period wanting 60% growth. To get 60% kind of growth I think someone would go for a relatively concentrated portfolio and if there is a mistake in that, then a major part would be off and instead of 60%, maybe the total portfolio would come to 30-40% for 1-2 years for that mistake.
And to top that, there would be the additional responsibility of finding a replacement(again a >60% one) for the mistake.
By the way Basant sir, I have been seeing a kind of pessimistic sentiment on your behalf on Pantaloon since they first time you first told me about it on this thread. Now, no one talks of an EPS of 19-20, but rather that it has no value and other things. Just a thought!
 Btw, I also do the mobile calc. part at least once daily and many times on the computer. Also btw, it is important for someone going for a 10 year 60% CAGR target from now let's say, to start thinking of the ones which would be there in his portfolio after 3 years based on expected lucrative themes.I personally believe that THIS 60% CAGR FROM NOW UNTIL NEXT 10 YEARS IS DEFINITELY POSSIBLE...BUT It has to be done as a group...a very committed group! The power will come from each one really caring for every other member of the group and not just answering with a disclaimer from each one, once something is not going as PLANNED! Try dwelling on it deeply(if you like) everyone. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: kulman
Date Posted: 28/May/2007 at 10:11pm
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All said & done, Om jee......It is the purchase price which will determine returns for an investor. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: BubbleVision
Date Posted: 28/May/2007 at 10:16pm
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Fortunately or unfortunately.....only the selling price matters! If it's in market, then its only in books and in Paper! ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: omshivaya
Date Posted: 28/May/2007 at 10:20pm
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Not just Purchase price: but also the FACT that something which was supposed to be a growth story in fact unfolded as planned and it doesn't turn out to be a wicket... ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: Vivek Sukhani
Date Posted: 28/May/2007 at 10:21pm
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Someone who bought Infosys on 07-03-2000 @ 1598, hasn't even managed a 7 p.c. CAGR assuming he sold off at the peak of this bull market.....and someone who bought infosys on 14-06-2006 @1241, got chance to double his money in less than a year....100% CAGR.... rather more than 100 p.c. CAGR as he got the chance in less than a year...
Thats what purchase price and timing does to your investment life
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Posted By: BubbleVision
Date Posted: 28/May/2007 at 10:27pm
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100% Vivek......Timing is very very important!
Those who are saying that it is not, are just like an ostrich. I have already posted on why I think that Buffet is also a market timer!
Ask about timing to any Japanease who purchased Nikkei in 1989, or Dow at the end of 1966, where, after half his "investing" life in 1982, the Index was at the same level!
------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: omshivaya
Date Posted: 28/May/2007 at 10:30pm
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Very true Vivek jee...again a repetition of what I pointed out a few messages back: NOT JUST Purchase price BUT ALSO the company actually executes well what it had planned(that is the growth story based on which the stock was purchased in the first place). ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: deepinsight
Date Posted: 28/May/2007 at 10:31pm
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While 60% CAGR would get us to 109 times in 10 years - dont forget that 35% CAGR gets us to 20 times in 10 years.
This goal of 35% if achieved would already be an amazing achievement.
This kind of goal 60% CAGR over 10 years is quite inspiring - its important for us to make sure we do not take unnecessary crazy risks and avoid the obvious mistakes. Large capital loss can easily cost us years of growth as it happend in 2000 (on the nasdaq).
Omji: I find your thoughts on TED's working as a team on a singular goal of 60% also quite inspiring- hope we can add more to that idea.
------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: basant
Date Posted: 28/May/2007 at 10:36pm
Pantaloon is a very soid growth story but sometimes it is better to keep the tempo at a low ebb. The triggers would come when they list their subsidiaries and that would create value - value is not in their retailing business. That is what i wanted to say. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: omshivaya
Date Posted: 28/May/2007 at 10:37pm
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Deep jee The idea is if we target above 60%, we can at least reach 40-45%. That is why I dont want to even talk of 40-45%, bcoz if something goes wrong, the mind(which is a very manipulative SOB) will convince ourselves that what the heck at least we got 25-30%. TARGET: Look for no less than 60% for 10 years
GROUP WORK: Doing it as a group will take care to some extent that unnecessary risk you are talking of!
Finally: It's as simple as that!!!!
Basant sir: Thank you. Wanted to hear it from your mouth.
We all have to go back to the day when we first started on TED. Continous push is important! 10 years ahead for us. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: Vivek Sukhani
Date Posted: 28/May/2007 at 11:01pm
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Hey guys, this CAGR thing perplexes me......you gold on to a scrip for 11 months and it doesnt move, 0p.c. CAGR.....in the next month it doubles....100 p.c. CAGR.... its how you smooth out the return scale that matters....and one who buys in the 11th month makes a 1200 p.c. CAGR. I dont think setting targets for returns is ever justified.... absolutely futile... karma kiye jaa.... fal bhagwaan par chorr de!!!!!!!
just a thing one must always ensure.... regular cash flows...if thats not there, one will real hard doses of good luck.....
as monu says, My 2 cents....
Regards,
vivek
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Posted By: omshivaya
Date Posted: 28/May/2007 at 11:48pm
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The returns would always have to be taken from a 3-year standpoint, because the themes that would be needed to be invested into to get a 60% CAGR would be REAL SOLID themes, with a good long-term growth prospect. Typically these themes would be ones where there is a structural change genuinely expected to take place or where the addressable market is huge and the company is a niche player in that field. These gems can't be found out if we keep an eye for 1-year. It has to be at least 3 years. Usually we wont miss such stories if we keep a 3-year standpoint. Anyone investing in such themes should in my opinion be ahead of the curve to vision the upcoming opportunity and thus COULD also have a good probability of picking up at a good price, since the stock COULD BE undiscovered.
A 3-year view would give a 1 year timeframe of being discovered PROBABLY too, so there are many advantages of having a 3-year view than a 12-month view.
I don't know if we will again find such "structural change" themes again like Retail or TV18. Media is still in its infancy stage of "structural change" compared to Retail. This theme of "structural change" is my best option for getting that 60% CAGR, so out of many we have to keep track of this ONE theme for our 10 year target.
Also, this theme has everything it that an investor dreams of: industry/sector rerating, company rerating, long-term growth and much more.
I hope I made some sense here, just spoke what came thru me. maybe Basant sir can correct me if I am wrong, as he has been able to identify 2 such structural changes and MORE IMPORTANTLY, the companies that would make THE BEST profit from this change. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: manishdave
Date Posted: 28/May/2007 at 4:38am
Can leverage help in getting magic figure(109)? No body talked about it. Then probably 50% would do. I am ducking in anticipation of replies particularly from Kulmanji.
In my view if 109 if not impossible, it is next to impossible. Particularly after such a big run-up. I had very high returns in past few years(like most of us) but dont think performance will repeat.
But if you ask Mark Faber he would say why 109, even 1090 is possible too. It depends on fed. If they start printing money....
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Posted By: Vivek Sukhani
Date Posted: 28/May/2007 at 8:13am
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I raise my hand in acceptance, Manish.... Om, I am quite flexible with respect to my investment horizons...so long as the company is increasing its cash flows, I will be with that company.....if that company can do so for 50 years I wont mind staying with that company for 50 years.....however, if the company shows a reduced cash flow in the next quarter, I will be off....tell me , whats the point if you double your money very very fast, in say just a year and then the stock doesnt move for next 2 years......so, horizon setting, target setting etc etc., doesnt take us anywhere. And although Mr. Market may be irrational, there are very very few stocks which can stand the heat of Mr. Market if that is turned on......thinking of 25 p.c. returns when market throws you -25 per cent return???????-sure, one must dream, no obkections to that...
Infosys made a an all time high for that rally in 2000 at 1598 and on 03-10-2001, it was almost at a 2-year low of 269.50.... i use the example of Infosys as its one of the most respected counters and perhaps managed a decent return from 2002 onwards......many stocks and I repeat many stocks were battered beyond shape.....
I am not against the power of compounding but use it for your bond portfolio.....there making your investments 4 times in 12 years having invested @12 p.a. and re-investing the proceeds at 12 p.a back to back seems a very plausible goal....
regards,
Vivek
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Posted By: go4lalit
Date Posted: 28/May/2007 at 9:26am
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I want to bring another point while getting a 60% CAGR for 10 yrs.
The point is that it is almost impossible to get linear 60% CAGR for 10 yrs. Although it is possible to get 30% CAGR for 10 yrs in linear fashion (like HDFC) but anything beyond 30% is very difficult.
The companies which manage 60% CAGR will actually generate the real return in a period of 4-5 yrs. For example Infy.. the real return came in a period 4-5 yrs. This is the period when the PE expansion happens and maket discovers its potential.
Even if Pantaloon doubles in the next 5 yrs, it will have 60% CAGR for 10 yr period, as it has been a 50 bagger in last 5 yrs. For the same sake pantaloon has a 60% CAGR in the last 10 yr period.
The moral is to get in very early before the market discovers it and pay the right price for growth stock.
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Posted By: Vivek Sukhani
Date Posted: 28/May/2007 at 9:50am
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Excellent summation......truly wonderful....
before the market discovers it...... very very appropriate phrase!!!!!!
Thanks lalit
regards,
Vivek
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Posted By: deveshkayal
Date Posted: 28/May/2007 at 9:55am
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The moral is to get in very early before the market discovers it and pay the right price for growth stock
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Absolutely.As far as theme is concerned,Internet could be a huge play in the next ten years.I remember in Biyaniji's book,Shivanand Mankekar has said that he will keep invested in Pantaloon for the next ten years. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: Vivek Sukhani
Date Posted: 28/May/2007 at 10:13am
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However be flexible......if after 3 years you see it go up 30 times and you see another stock thats likely to double in 2 years time......swutch off to that so that you end up making 60 times in 4 years and not 10 years....hathi baocho bakri kharido style which is perhaps the most flexible style and advocated by manish dave.....do tie up your investment to corporate cash flows....and if you can increase the earnings yield dramatically by switches, dont ever fear.....thats when the compounding comes into play.....
illustration:
1.Stock A=5 times in 2 years.
2.Switch to Stock B=triple in 2 years
3.Switch to stock C= double in 2 years
4.Switch to Stock D=double in 4 years
You end up making 60 times in 10 years, by becoming more and more conservative....
Assumptions:
1.A Full blown out bull market at the beginning of the career for 2 years
2.A Selective bull Market for next 2 year where your performance becomes average(4 years gone)
3.A minor bear market after 4 years upto 5 years and therefater a smart bear market pull back....(6years Gone)
4.A bear market for 2 years after 6 years lasting for 2 years(8 years gone), and then a a leg up rally again for 2 years(10 years Gone)....
However, some more smart and enterprising investors can earn still higher returns by making very aggressive switches like selling outright and reinvesting in the bear market.....for normal investors, this can be applicable...
regards,
Vivek
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Posted By: go4lalit
Date Posted: 28/May/2007 at 10:58am
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If we take a 10 yr view, we have to be really patient. For many people it is very difficult to take a view longer than 3-5 yrs.
Vivek, taking your point of veiw. Take a look at this:
1. Stock A : 50 times in 5 yrs
2. Stock B : 50 tmes in the next 5 yrs
After 10 yrs you will have 2500 times. Amazing... Now the point is, Will someone risk his entire 50 bagger money in another stock B? My guess will be a big no. After that he will look at protection rather than risk. That is when the number of stock in his portfolio will go up and factors like consistent growth will be crucial.
Does anyone know whick stock has given maximum return in the last 10 yrs? Its Unitech. and you know which yrs of that 10 yr stretch has contributed for that return.
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Posted By: go4lalit
Date Posted: 28/May/2007 at 11:12am
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Just curious to know if anybody knows this.
Which stock in India has given maximum return for a period of last 20-25 yrs? Is it able to manage more than 30% CAGR?
Also in the overseas market maximum return from a particular stock in the last 20-25 yr period?
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Posted By: Vivek Sukhani
Date Posted: 28/May/2007 at 11:18am
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Lalit, what if someone would have had a Silverline at the height of 2000 rally.....its all about defence, moderation and aggression.....and reverse cycle.....TV18 was an equally compelling story in 2000, but its yet to touch those highs, now one who invested in it justa year back has made more than 3-timer....and hence, I always will say one should not make an exit and switches for the sake of it.....I entered into OBC at 35, made a top exit at 308, then enetred into SRF at 33 made an exit at 280... entered infosys at 1150, made an exit at 2037.... entered BASF at 186 and am standing at 270.....the switching has been reasonably decent for me....my dad made less than by sticking his guns with Shree Cement 9although with his purchase its more than 130 times) in the same time.....at the end of day, both of us are happy.....as Bubble says, play the game in accordance with your comfort level......I have for one always liked getting into mid-caps, so I realised Infy's not for me.....and if i want safety of capital i will go with a MNC, where also I have packed some amount.... frankly speaking, i like switching although in tits and pieces but am not a very dull investor either..... and except for dividends, I have no competence.... |
Posted By: go4lalit
Date Posted: 28/May/2007 at 11:37am
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Vivek, just curious to know..
After making a 10 bagger, are you able to put entire 10 magger money in another stock? Now assuming next stock also gives you 10 bagger and you have total 100 times money. Can you again switch and put this 100 bagger money in 1 stock again?
For me, I find it mentally very difficult to put entire money in another stock.
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Posted By: basant
Date Posted: 29/May/2007 at 3:17pm
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All that talk about getting in early and then exiting when the stock has been discovered is akin to shadow boxing; the real thing is remarkably different. It is great to get back into the realms of time and unwind the clock but actually speaking few can do it with actual money.
It is very easy to make 10 baggers from positions that you can afford to lose but making a 10 bagger from a position that you cannot afford to lose is the trick that we all learn in this market. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vivek Sukhani
Date Posted: 29/May/2007 at 3:27pm
Sir, however one says, we do need luck in this market.......am yet to come across an investor who started at the peak of a bull market and has been very very successful.....we need careful initial steps and that is only facilitated in doldrums periods when you find value lying everywhere....affordability to lose is a very terrible term...and wont like to comment on them.....
As far as shadow boxing goes, it actually is shadow boxing.... the real game is very very tough......50 baggers in 5 years in a bull market is like sa standing on the roof of the world and looking at the sun above and trying to catch it like a ball. Attempt it to get the real fun, guys..... ------------- Jai Guru!!! |
Posted By: basant
Date Posted: 29/May/2007 at 3:36pm
1) Luck is something which I do not believe in and my definition of luck is when hard work meets opportunity
2) Anyone who starts at the top of the bull market is stupid not unlucky. I was stupid in 2000 but certainly not unlucky because had I been unlucky I would not have learnt some real hard lessons.
3) People do catch the ball looking at the sun without sunglasses! But the idea is to stay focused. You cannot catch 10 balls dropping from the sun but you can catch one or at most two at a time.That is what I want to elaborate. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vivek Sukhani
Date Posted: 29/May/2007 at 3:48pm
| but in an attempt to catch that ball if both of your leg go up in the air, then you may get the ball but what will happen next is something I dont need to say...do you remember sir at St Xavier's, we had an accounts professor, infact in our times he was the head of the department,Mr. T.K.Roy.....he once said.... in life, all problems have just one catch, if you catch the catch, its alright, but of you dont catch the catch, the catch will catch you!!!!I think same goes with equities.... |
Posted By: kulman
Date Posted: 29/May/2007 at 4:22pm
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Labour Under Correct Knowledge ---OM jee's famous words ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Vivek Sukhani
Date Posted: 29/May/2007 at 4:26pm
| you can have correct knowledge only by luck, kulman..... |
Posted By: basant
Date Posted: 29/May/2007 at 4:35pm
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Luck: This is a random and arbitrary topic and makes no sense to discuss- at least to me.I do not think that luck has any bearing on a person's destiny. Coming to your analogy of actching a ball and falling..... I have nothing to say except that we have our own ways of investing. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 29/May/2007 at 4:37pm
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Who could argue with this Sukhani who is in deadly mood today?
Kya hua Vivek bhai, koi dividend ka cheque bounce hua kya? I know you would take these comments lightly!!
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Vivek Sukhani
Date Posted: 29/May/2007 at 4:42pm
| aaj kal cheque aata kahan hai... seeedha account mein chala jata hai....am i sounding very angry or what???? nothing like that, but thanks to my being indisposed, am sitting on the screen.... |
Posted By: kulman
Date Posted: 29/May/2007 at 4:47pm
You aren't sounding angry at all. But the sound might make others angry !!
Waise, beemari kya hain? Bukhaar, khaansi? ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Vivek Sukhani
Date Posted: 29/May/2007 at 4:57pm
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actually mere mein aaj kisi ka bhoot ghoos gaya hai.....subah se sabse larai ho rahi hai....
Yeah, am suffering from cold.....
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Posted By: BubbleVision
Date Posted: 29/May/2007 at 5:01pm
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I have found the eighth wonder of the world. It’s compounding!
…..Albert Einstein. ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: Vivek Sukhani
Date Posted: 29/May/2007 at 7:14pm
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In many a ways, I believr you are a very unique investor Sir.....as far as I know those investors/speculators who suffered in that mayhem have never managed a re-entry.....sometimes when I am in Lyons Range for some work, I come across some of them and what i sense is that they have become very deranged.... they ask how much is ITC , how much is ITC, 30 times in an hour......its that kinda fear psichosis about markets......as if someone has been left too stunned to feel normal or have been given external shocks....
In many a ways, my life has been influenced by seeing them.....I understand its negative way of looking at things, but when the cost of failure is something which can make you suffer for your life, i always try to behumble myself and just pray to god....and in that ways, you call it luck/destiny or God's grace, I beleive rather have been made to beleive that its very very necesary....as dad says, always be humble before the markets otherwise if you try to keep your neck too straight, the markets will bend will bend it in a manner you cannot imagine......he always tries to make me understand and force me to look at past prices so that I never get carried away.....
As GE Shipping went up today, some of my people called me up and as I was getting happier, he told me me one thing, in case you are not comfortable in adding up when its 60 p.c. down from here, sell it off.....he's an extreme faithful yet he understands the power of liquidity and he beleives that prices are high and will go higher so long as suplly of stocks is less than the demand for it.......and when the reverse thing will happen, you will only have fundamentals in your hand......its true, you may complain that I lack conviction, but Sir, I dont think investors will ever like a round-trip in life( your CMP becoming equal to the purchase price after having gone up manifold).... the experience can be very frustrating.
I am a humble student, and I know nothing except that I have to be humble before the markets.....true Mr. Market may be irrational but its the Cover Page of the intelligent Investor which I always remember the most...I just want to know what leads to disaster, because in my quest I dont want to be an Abhimanyu, sure I want to brave but not a martyr....in order to fight this chakravyuha, I need a good saarthi, which can be no better than He the Divine , His blessing.
I may appear a bit confused and awe-struck but as the calls came from some well-wishers, i also got afraid....
Basant Sir, its your guidance we look upto........one behaves stupidly out of ignorance and sometimes the after-events make his best of moves look like stupid...
|
Posted By: kannanravi1
Date Posted: 29/May/2007 at 7:49pm
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Lalit, I read a study by Motilal Oswal and it shows that over the past 15 yrs Hero Honda came at the top among large caps with 40% CAGR and I think Ranbaxy came in second with little over 30. ------------- kannan |
Posted By: smartcat
Date Posted: 29/May/2007 at 7:53pm
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Basant Ji, When you talk about 60% CAGR for 10 years and then go on to explain bits of your portfolio strategy, it might lead to mungerilaalism.
I suggest you ask everybody to look at your disclaimer again.
|
Posted By: basant
Date Posted: 29/May/2007 at 8:09pm
You are right, somehow I feel that people are getting restless to punch in with their comments because 60% CAGR looks too high for a strech of 10 years!!!But...
1) I just laid down a table and never procliamed whether I could or could not do it.
2) There is absolutely no invitation to invest on any of the themes that I would have indicated as a path to this magical effort!
3) Instead of discussing the magic of compounding and how we should be focused on the same members were getting head over heals to get into a criticism mode.
Now in high school we were taught that the compound interest formula was P(1 + r/100) => to the power of n
where :
p= initial capital
r= rate of interest
n= number of years
Now I did not see anyone say that Ok let us do 40% and get to that figure of 100 times in say 15 years everytime we remain focused on "r" the rate of interest we are always ignoring n the number of years and P the initial capital.
In one of the posts I mentioned that making a 10 bagger was ordinary on some money that we can afford to lose (small "p") but extremely extraordinary on a money that we cannot afford to lose (very large 'p').
Just getting 100 times richer is not the issue the issue is to create enough wealth to be considered wealthy. SO if you think that Rs 5 crore is enough for you you can start with Rs 5 lacs and aim at 60% or with 40 lacs and aim at 30%. The onus is on the investor.
Taking the debate on this line would have been far more beneficial rather then shadow boxing about pantaloon and Infosys
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: omshivaya
Date Posted: 29/May/2007 at 8:43pm
Yes, anyone who thinks the target of 60% CAGR for 10 years is futile and obnoxious should simply ignore this thread.
Let the people who want to focus on this target discuss and strategize. The TEDdies who are interested, stay focused. There will be many distractions for sure but one should be really focused on this goal as it is not a simple task and as I said earlier, if we focus on 60%, then at least we would make 40-45%. Let's try rather than go into every other discussion other than the topic mentioned. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: smartcat
Date Posted: 29/May/2007 at 10:08pm
Interesting you mention that here. While us Indians fall over eachother to lock-in our money in PPF for 15 years, we don't look beyond a few years for equity investments.
As a dreamer myself, I like this toy - Magic of Compounding -
http://www.moneycontrol.com/planning_desk/index.php - http://www.moneycontrol.com/planning_desk/index.php
Enter your current portfolio size, approx monthly investments, percentage returns and number of years. Hit CALCULATE
I once saw AMOUNT coming to Rs. 1,000 crores.. hehehe..
 |
Posted By: manishdave
Date Posted: 29/May/2007 at 10:34pm
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I did not see anyone say that Ok let us do 40% and get to that figure of 100 times in say 15 years everytime.
************
Basant, You are right. We failed to take moral of the story. If you target 500 runs and end up with 350 its not bad at all and unlike cricket you dont lose here if somebody makes more than 350.
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Posted By: smartcat
Date Posted: 29/May/2007 at 10:44pm
I would feel pretty disappointed if Sensex makes more than 350 though.
Is it just me? I am always chasing that girl. I am satisfied only if my portfolio returns atleast 50% more than Sensex for that year.
The reason is - one can get sensex returns with zero risk and effort. I would like to measure the effort I put in, by comparing my returns with the benchmark.
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Posted By: kulman
Date Posted: 29/May/2007 at 11:10pm
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Now I did not see anyone say that Ok let us do 40% and get to that figure of 100 times in say 15 years everytime we remain focused on "r" the rate of interest we are always ignoring n the number of years and P the initial capital.
----------------------------------------------------
Hey you've stumped the batsmen by throwing a slower 'doosra'! Haven't heard of any prolific spinner from Kolkata after Dilip Doshi !!
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: vivekkumar_in
Date Posted: 29/May/2007 at 11:29pm
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On the face value - I don't think there is anything wrong in aiming for 60% return for 10 yrs.. => We have identified theme for the next 3 yrs and some core stocks with EPS growth rate of 60% or so.. => Even if they do a 50% EPS growth , we have a high probability of our portfolio reflecting that => Some of them with additional kickers of demergers etc will only add and may be push the overall portfolio returns higher => Come next 2009/2010 or so all we have to identify similar core stocks that can do a EPS growth of 60% or so with certain predictability for next 3 yrs.. => While 10 yrs may look long.. 3 yrs predictability is something we can all work at and have a decent conviction... For many of us hard to digest the 60% for 10 yrs.... lets try to bite the pieces smaller and see if that is easier to digest... & comparing/competing with sensex is what many try to do.. But you can only compare with Sensex on the hindsight... Can anyone preditc with reasonable predictability the return of sensex for next 3 yrs ? - NO... We can do a decent analysis on a company with much better precision than the sensex.. More than that sky is not the limit for one's financial goal? We all should have a financial goal which you want to attain in n no of years... While it remains that no one complains if that is attained in n-1 or n-2 or n-3 yrs... But your return that one should aim for should be based on this financial goal and not on the probable sensex return for next 10 yrs.. ------------- Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies. P Lynch |
Posted By: kanagala
Date Posted: 29/May/2007 at 1:57am
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Sir, Can you give us your CAGR estimates for some of the stocks we have discussed here (equity XI). What are the stocks do you think will give us 60% CAGR.
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Posted By: drpatils
Date Posted: 29/May/2007 at 8:05am
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Considering limited no. of Indian population in share market at present and also considering ever increasing desire to participate in share market by future geneartion, what Basant ji is saying is perfectly possible and will be achieved al least by some of us.Question is do u want to be in that list..Peace.Its not greed,its plain simple calculation supported by Logic and having faith in companies where we invest.
We all TEDDY'S want the same thing that Basant ji wants for us...As they say 100 m Race of Life never begins at same spot for everyone..for some it starts at 99m ,for some at -20 m, as long as we have desire to finish the cross line no one can stop us..sooner or later we all will be there...sooner the better! We are our worst enemies. These are my two cents. ------------- The journey of thousand mile begins with single step-Chinese Proverb |
Posted By: Vivek Sukhani
Date Posted: 29/May/2007 at 10:09am
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Basant Sir, in investing I beleive and again I must reiterate its entirely my personal opinion that you must leave certain things for the markets to make happen.....we cannot force things on market. Am not against your compounding logic, the only thing I am asking is does it happen that ways? Sure, its in everybody's ambit to dream big , thin big, plan big..... but in stocks execution will always be done by market. All i intended to say was to achieve the set target by making correct switches at times....by mixing aggression, moderation and defence, so that at no point we look fatigued to achieve your goal. Basant Sir, without getting into names, a person like you easily generate a 100 timer in 10 years.....and that too without risk in case you have met with the initial success.... Suppose, you made a 50-timer in 4 years.... now making a 100 timer is extremely easy.....you simply need a Zero Coupon Bond with a YTM of 12% p.a for 6 years and you will have a 100 timer at the end of 10 years. All, I intended to say was that sticking to 1 company for 100 times returns is somewhat dangerous......and when the goal can be achieved simply then one must try to reduce risk so that the ultimate goal be achieved.
As for myself,as you indicated, one may have have different approaches....I keep very very simple goals.... I really dont have wealth targets, for i dont like to devote time on what is not in my hand.... however, i have my cash flow targets, for in my opinion, its the liquidity which gives one an emotional strength to tide over difficult times. I dont need X crores of wealth with no money in my deposit account.
True, I am argumentative but want to see something emating from arguments. It may get heated, to which also I dont have any objection, however, intention must not be misinterpreted, for then it becomes a bad fight, a muddle which I have no desire to enter into. I didnt give the Infosys example to show down.... it was an illustration to show my point. As i mention again and again, i am a naive person with practically little or no experience, its simply that I have been plain and simply lucky. Just that I cant say anyone stupid because he or she missed out or lost because tomorrow any one of us may be the loser.I will always blame myself for my loss but every sucess I have, I will atribute it to grace of God....its just a way of keeping myself humble before the Markets. I have seen people traumatised by the markets, so I fear that Invisible Hand....
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Posted By: pramodjain
Date Posted: 30/May/2007 at 5:08pm
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Basant Jee : Your thought process is great : Here i want to say one thing for you No Dream Too Big |
Posted By: omshivaya
Date Posted: 30/May/2007 at 10:17pm
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Basant sir,
Since we started off this discussion, we should now go onto the next level of identification.
Since we are at one go looking at only 3 years ahead, so for the next 3 years which ones would be our bet for a 60% CAGR?
My entries are: Pantaloon, TV18, Network18. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: vivekkumar_in
Date Posted: 30/May/2007 at 11:21pm
By 2010 I believe Pantaloon would have hived off its Future capital & PRIL retail & other ventures may not be able to expand their footprint as fast as they do now. I don't know if they can produce a 60% growth even after 2010. TV18 & NW18(media) could have attained a semi-mature status like Telecom of 2005 or something... It may still have some juice left out for the next couple of years. So they might be able to make the 60% cut If we are looking beyond 2010 for 2010-2013, my view is on the financial sector. If we believe in India growth story and under penetration of equities, financial sector is going to be huge. We are going to have a few mammoth financial companies in India in the likes of US. Encompassing - Banking, Brokerages, AMC, Credit, Loan, Insurance et.al Reliance Capital, India Bulls & Future Capital could hold potential to become such heavyweights Any ideas ? ------------- Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies. P Lynch |
Posted By: omshivaya
Date Posted: 30/May/2007 at 12:05pm
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Well I was trying to focus on the next 3 years for now. I have no idea on the 3 years after 2010. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: vivekkumar_in
Date Posted: 30/May/2007 at 12:14pm
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Sorry omji ! For some reason thought you were looking beyond 2010.. My bad ! You are right then Tv18, NW18 & PRIL look the most poised for 60% for the next 3 yrs. ------------- Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies. P Lynch |
Posted By: omshivaya
Date Posted: 30/May/2007 at 12:36pm
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No probs Vivek jee. Maybe in 2 years, we would be able to lookout for the 3 years from then. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: kanagala
Date Posted: 30/May/2007 at 9:43am
We can include Yesbank. It should grow 50% CAGR at least for next 5 years. |
Posted By: johnnybravo
Date Posted: 30/May/2007 at 11:12am
The happiest person on this earth to read this post would be Vipulji!!  I wonder where is he these days? |
Posted By: basant
Date Posted: 30/May/2007 at 11:17am
|
Vipulji is back in India on vacation. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: omshivaya
Date Posted: 31/May/2007 at 1:41pm
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Basant jee, I was just wondering that do we go past the initial topic of this thread and extend it into practical purposes or we just enjoy the figures in that table. Will go forward as is desired, as both are okay by me. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: basant
Date Posted: 31/May/2007 at 1:44pm
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Extending it into practical purposes is both easy and tough! Easy because we just have to look around and see which sectors would grow at more then 40%CAGR for the next 3 years my bet would be on Media, Retail, and Internet. Tough because it isn't easy to choose the best company in each of these sectors! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: omshivaya
Date Posted: 31/May/2007 at 1:51pm
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I thought we knew which were the best, from any perspective. Correct me I am wrong (just repeating what I have understood from you):
Media: TV18, Network18
Retail: Pantaloon Retail
Internet: TV18(Web18)/InfoEdge
------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: BubbleVision
Date Posted: 31/May/2007 at 2:17pm
Wrong Om...
Internet: TED......To buy the stock, you have to ask BasantJi for ESOP or a Private Placement! ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: nav_1996
Date Posted: 31/May/2007 at 2:37pm
| Good mid-cap it like 3i, Nucleus and couple of others will also grow 40% + |
Posted By: basant
Date Posted: 31/May/2007 at 2:55pm
Yes, those are the stocks I am backing in these sectors. Add DishTV to that list of media companies. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: smartcat
Date Posted: 31/May/2007 at 3:15pm
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What is the CAGR returns estimate for each of the stocks in EquityDesk XI and for the entire portfolio over the next 3 years?
My estimates -
Not sure about the rest.
|
Posted By: Ajith
Date Posted: 31/May/2007 at 5:33pm
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My guess would be that the company that gave the maximum returns in the past 25 years would be Wipro.I remember in 1989 it was quoted at 180 (it subsequently issued 2 or 3 generous bonus issues and quoted around 400 in 1998-these are from memory)and it was very illiquid and the fact is that I looked at the fundamentals thought it cheap relative to prospects but did not have the gumption to buy and hold.
To make 60 percent CAGR the best way is to identify companies like Wipro in promising sectors and buy and hold or else be a genius at frequent compounding by successively identifying winners. ------------- Ajith |
Posted By: basant
Date Posted: 31/May/2007 at 6:24pm
Thanks for that post. I was thinking about that Wipro example you have enlightened us with on this forum. I remember your analysis that in 1989 the contribution of the software division to the overall wipro sales was very small and as the small division grew the company was rerated by the markets.
I think if we could have the 1989 annual report of WIpro (through a link on this site) it would be an excellent eye opener for investors to understand what a high growth rate division can do to the overall company in about 10 years.
CLearly I am talking from the Tv18 web18 point of view! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: omshivaya
Date Posted: 31/May/2007 at 8:42pm
Yes, right on Bubble jee. Definitely in terms of members' networth and quality of posts on TED. Very surely!!!! ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: omshivaya
Date Posted: 31/May/2007 at 8:45pm
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...CLearly I am talking from the Tv18 web18 point of view!_________________________________________________
Not to forget Networj18 from GBN point of view. Sir, about that DishTV part, in flats based in apartments(into which most of middle-class shifts eventually due to social interaction, physical security) I am not sure how many DISHTVs would get installed. I would rather bet on Cable and/or IPTV.
------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: basant
Date Posted: 31/May/2007 at 9:11pm
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Dish TV will do well.The market is really huge and enormous. Also we are never saying that DIsh will take 100% of total cable homes.
If TED lists all members who have contributed should get stock grants! Sure why not but will TED list? ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: omshivaya
Date Posted: 31/May/2007 at 10:08pm
|
Yes, that is absolutely true. What I meant was the business model of DishTV. A Cable or a connection thru exsisting phone lines makes a good business model, since the domestic consumption is primarily based on the Indian middle class, most of whom stay in apartment like structures. DishTV may be a multibagger, but my point was more from a business model point of view. In media, my favorite would still be Network18 and TV18 hands-down, though I must admit the recent Network18 bashing is not making me 2 happy. But, it's all part of the long-term game as they say.
As for TED, it may become a Private Equity takeover option too who knows? No hassles, as long as we keep contributing qualitatively and sincerely. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: kanagala
Date Posted: 01/Jun/2007 at 4:20am
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I read this somewhere. Wanted to share with you. High growth companies: some of the well known examples.
For illustrative purposes only. Source: DB Research. Compounded and annualised returns as on April 30, 2007. Please note that this should not be construed as an investment advice.
My notes:- Looks like, Infy had a Major dip. KBM looks like a MR. Consistent. Sorry for the font size. Let me know if i need to edit. |
Posted By: kanagala
Date Posted: 01/Jun/2007 at 4:48am
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Inputs on Management quality/execution from the same report:- Infosys :-  Built capable & stable management; attracted new and skilled talent with strong retention policies, delivered de-risked growth without dilution in profitability, followed shareholder friendly practices.Bharti :- Entrepreneurial and highly innovative, exhibited ability to generate consistently high growth rates, trend-setting financial management and leadership
ABB :- High quality management with strong track record, sound financial management, consistent ability to introduce new products and deliver growth.
HDFC:- Stable management team with strong corporate philosophy, Shows consistent ability to understand the environment well, willingness to forego unprofitable growth, Minimal dilution to fund growth.KMB:-Strong and aggressive team, Highly entrepreneurial, Stable and confident top management, Have shown ability to build a large retail franchise without dilution of quality |
Posted By: basant
Date Posted: 01/Jun/2007 at 9:31am
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I think the rows at the top of the table should be filled in for the years!!! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kanagala
Date Posted: 02/Jun/2007 at 12:22pm
Hi Sir, The font color of the rows at the top is white. I forgot to change it. By selecting the row, you can see the years. Sorry for that. |
Posted By: tigershark
Date Posted: 09/Jun/2007 at 11:04am
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from the first std till we graduate we are toughtthings that we do not need to know if only somebody taught us that rupee 1 compounding at 60% becomes 110 in 10yrs is all the maths one has to know say goodbye to calculus, theorems,etc ARJUN SINGH are yu listening?till we all get a degree we are only becoming LITERATEthe real EDUCATION starts once we step out into the real world.the earlier our eductaion starts the greater will be effect of compounding for buffet it started i think at the age of 14! ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 09/Jun/2007 at 11:55am
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Yes, Tigershark you are absolutely bang on. We can do away with calculating variances and correlation for Betas and this simple multiplicative model is more then a Alladin's chiraag for anyone who wanted to be with a lot of money at the end of the decade.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: BubbleVision
Date Posted: 10/Jun/2007 at 12:06pm
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No BasantJi...I disagree. I accept that to make money in Stocks....One does NOT need much knowledge of Maths and Calculus and such stuff......However, as one graduates to Fixed Income (Bonds), Currencies....One needs to know a lot of Maths and calculus. For me, knowledge of Swaps, Option variances, beta, gamma, alpha, co-relation between FI and Currencies are a must.
It once again...."Everything works". That Complex KALMAN FILTER model, which I posted sometime ago also works.
Knowledge of "Market Volatility Model" also works.
------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: basant
Date Posted: 10/Jun/2007 at 12:13pm
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Everything works but it is always best to keep the simple things at work. Otherwise you never know http://www.amazon.com/When-Genius-Failed-Long-Term-Management/dp/0375758259 - "When Genius fail"?
There are various ways to reach a destination but as an investor one should take the path that is simple (not easy) rather then the ones which he does not understand. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: drpatils
Date Posted: 10/Jun/2007 at 12:38pm
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Basant Ji,May I add my tagline here?.."Life is simple,people make it complicated!" ------------- The journey of thousand mile begins with single step-Chinese Proverb |
Posted By: Vivek Sukhani
Date Posted: 10/Jun/2007 at 4:08pm
| Mr. Basant, although I totally agree that until and unless one takes pain to understand a company, all quantitative analysis are futile......HOWEVER, after you have understood the company, WITHOUT QUANTITATIVE ANALYSIS YOU CAN GO NOWHERE.........true, you may disagree......however, INVESTMENT is also a science..... there's no point in buying a great business at an inexorbitant price......and in order to arrive at that appropriate price, you must know some maths.......there are many qyants who also have made it big here.......and whats simple to one may not be simple to another......for me, your style is not simple at all.... people may disagree, for an idiot like me, nothing else matters aparts from profits and dividends, and I find visualising about future profits to be a very futile thing.......similarly for you, my style may appear very hopeless( or complicated)....as i have decided I am not going to get into individual company names any more, for people tend to take offence, else debating on this thread would have been quite wonderful |
Posted By: kulman
Date Posted: 10/Jun/2007 at 4:10pm
|
There are a lot of ways to get to heaven. Use whatever works for you if you can define it as a discipline!---Warren Buffet
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: drpatils
Date Posted: 10/Jun/2007 at 4:32pm
|
We all will achieve our goal..someone will finish the race early some will be late finishers.As long as "Dil mein hai viswas",Hum honge kamyab ek din.Journey may be by car or aeroplane , as long as one is comfortable and can afford, destination will be achieved.
Vivek Ji I read ur posts seriously and I found a definate method there,but how hard I try to understand it, It makes me confused.But I m learning great deal from u.I belong to entirely different catagory and this forum has introduced me to a great new learning experience.
These diverse views make the discussions transparent and practically applicable to large extent.U r breathing life line to this forum.So keep ur good work going.We all like and learn from ur posts.
As Basant ji says as long as money belongs to u,its one's individual decision.And we rip the fruits of it.
Expert is one who explains the simple thing in complicated manner.
-Author:Annonymous ------------- The journey of thousand mile begins with single step-Chinese Proverb |
Posted By: basant
Date Posted: 10/Jun/2007 at 4:42pm
No offence. Only debate. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vivek Sukhani
Date Posted: 10/Jun/2007 at 4:44pm
|
Well.......as my dad says, there's nothing confusing about me, its simply foolishness that he associates with me.....Dr. patil, I beleive its the formative years which is very very important and as a doc you may understand it better than me......the problem with me is that I am surrounded by all veterans, people who have become wizards onto themselves.....as a result, my approach appear out-of-fashion to most of my friends, and even outlandish to some.....but this forum provides me with the scope of argument...something which is another passion with me......and I enjoy being a lone crusader for my hopeless scrips.....
|
Posted By: Vivek Sukhani
Date Posted: 10/Jun/2007 at 4:46pm
| Am quite surprised, rather shocked at such a polite response, Mr. Basant.....I was expecting a full blown out bouncer, and you tricked with a slower one...am bowled, completely....!!!!! |
Posted By: kulman
Date Posted: 10/Jun/2007 at 4:54pm
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Vivek bhai....what's your favourite sport? By chance, is it Spanish Bullfight? ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Vivek Sukhani
Date Posted: 10/Jun/2007 at 5:07pm
| Anything where a lot of trick is involved..... |
Posted By: kulman
Date Posted: 10/Jun/2007 at 5:14pm
|
Trick is a very tricky word. Please be careful in using it, applying it, implementing it!
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Vivek Sukhani
Date Posted: 10/Jun/2007 at 5:25pm
|
You missed something there manish......."be careful in facing it"......and especially in this place called stock markets......and in order to avoid getting tricked, keep your eyes open and ears closed.....reliability is a very rare virtue, trust you me......so locate this virtue in a companion, in a partner, in an advisor and also in stocks........and once you have them, treat it with proper grace..... |
Posted By: drpatils
Date Posted: 10/Jun/2007 at 8:22pm
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Vivekji Honesty is a great virtue in my opinion and U have it.Thats why I like ur thinking. ------------- The journey of thousand mile begins with single step-Chinese Proverb |
Posted By: Vivek Sukhani
Date Posted: 10/Jun/2007 at 9:43pm
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Thanks, gentleman....so even you in the league of my dad in thinking me a foolish guy....hahahaha.....!!!!!No issues with that......
Honesty lands you in trouble at times as well......you know what....as far as this thread of compounding is concerned, I have found it very very hypothetical and hence at times, some outbursts.......I beleive one must never invest with a time frame base in stock markets.....Very often on CNBC you will hear people asking for short term tips which I think is very wrong.....trust me, no one knows where the markets will be tomorrow, week after, month after, year after, decade after, century after......not even Mr. Basant, or Shri Rakesh Jhunjhunwala or Warren Buffett emeritus....so investing must always be circumstancial with adequate fall-back plans....very often the reason for an argument is the risk appetite...... and of late, it has reduced quite quite dramatically.......its just a sense that one must make a move.... was reading an Annual report of one of the very big construction giants.....true they are doing Bandra worli Flyover, they are doing other big things as well.....but when it comes to the P/L, the results so pale.... now whatever may be the order book size, at the end of the day, its profits which matters, now if somebody expects it to grow at the scorching pace in terms of stock price.....I have my doubts. Thats why I used that Infosys example to which Mr. Basant took offence.....I beleive at times, even if you are confident that a theme will materialise yet you have to make an exit......I have not across my people who have grown their wealth at the pace of 60 p.c. +CGR without doing some smart switching.....
Buy and hold produces very decent returns, I agree but not 60 p.c. So, uf someone has made it very big, he may afford to lose but for most of the starters, the first few steps must be taken with lots of caution.....
Its normal for someone to consider that I speak both ways, sometimes in favour of buy and hold and sometimes for switching.......its actually the kind of contentment you are looking for......if someone wants better than FD returns Buy and hold works very very well..... but for anything super-normal, its some very very smart switching in the initial years of a bull run....people's risk appetite goes on decreasing with more the money he makes..........and hence most of the successful investors will settle for Buy-and Hold, but during those initial years all are forced to trade......
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Posted By: basant
Date Posted: 10/Jun/2007 at 10:31pm
Actually I have become tired bowling fast with the new ball so I have resorted to slow bowling.
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