In a country like ours, nothing stays in demand-supply match for long....so I guess we cannot ever think long-term thinking along those lines 'alone'.
The stocks which will give you the most incredible returns will be the ones who you discover cheap and who has a feature of regular consumption( that may or may not grow, but most importantly, it shouldnt decline). Now, to obtain great returns, we not have to only meet the second condition, but we have to meet the first condition as well.
I think the concern talked about by Hit makes a great sense. We have to concerned about standalone garden companies and focus on companies which have a wider geographical plantation base.
Just think about it.....at a time when we are paying 5-10 times turnover for FMCG companies, we are not paying one time turnover for Goodricke. What we are ignoring is that the balance sheet is in the best shape in the last 10 years.....Just think, we are paying for consumer companies in big big multiples to their book values, we are trying to get them at sub-2 p.c. dividend yield then why not consider stocks which hav the feature of regular consumption of their finished goods, but not perceived as fast moving available at pretty decent fundamentals.
Consumer companies can also be rank under-performers.....there's no consumer company in India having a bigger basket of brands than HUL. But track its performance over the last 10 years.
What looks great at the moment may turn out to be pretty dud. Nothing is predictable beyond a point....we cannot figure out competition with accuracy, we cannot figure about demographics with accuracy, we cannot figure about technological change with accuracy. Nothing in stock markets remain hot for ever, and nothing remains cold for ever. What you try to do is avoid getting into the hottest stocks ready to be placed into the refrigerator and not avoiding the coldest stocks just placed on the burner.
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