The last month and a half has been extremely kind. Portfolio recovered over 20% plus since the budget day lows and what a smart recovery BSE has shown.
Even the benchmark indices have hit record highs with Nifty scaling Mt. 25K and Sensex cruising past 82,000. So what are my views and what are we happy about today!
A lot of people have been talking about the markets having moved up a lot. I have a different view in this- a lot of times when people think that the markets have moved up, they compare it from Nifty 7500 in March 2020. They assume that we are up over 3.5x in four years and thus we are bound to falter. They conveniently forget that Nifty was 6000 in October 2008 and was still 7500 in March 2020. So in effect, zero return for 12 years! In that way, we are only up 4x jn 16 years which is worse than a poor FD rate!
So for Nifty to even deliver its annualised compounded returns of close to 14-15% over long term, it is obvious that this decade will see bountiful of returns, only as a reversion to mean. Even at 60000 Nifty in 2030, it would only be 10x in 22 years! That will only be 11% CAGR over 22 years! So by the same logic of people saying markets should fall, I’m saying markets will double and double again in the next 7-8 years and still be cheap!
Now coming back to BSE. Like I’ve said in the past, with the kind of volumes it’s generating, its revenues can easily compound at 50% plus levels and which will only mean its PE being rerated to a much higher levels and sustaining for a long, long time. It’s an at least 10x in this decade, If not more.
Now let me come to something very close to my heart! Three of my companies have finally hit the coveted milestone of ₹ 1 lakh crore market capitalisation this week- OFSS, Colgate and HDFC AMC.
All three have either been a doubler or a tripler for me and the fine rerating melted my heart away! Colgate in particular has Been the star this year, already up almost 80% without even being mentioned in any news publications!
The moral of the story is, if you do good research, stick to your companies and avoid the temptation to buy the hottest defence PSU or the latest Chemical stock or the new Zomato; you will make a lot of money! It’s important to make money, it doesn’t matter if you buy Paras defence or Colgate!
One of my friends wanted to buy Paras defence because it was going up but unfortunately went down. It all happens when you latch on to the latest fad at the last leg of a bull rally and can’t get out in time. This, happens but the best is to avoid being stuck, take a loss and redeploy capital elsewhere where you know what you have bought.
So I would urge all of you to remember the good old adage, don’t eat junk! If you can sit tightly though this mega, mega, multi year bull run, you’d do exceedingly well by the time we are in 2030 and nifty itself is around 80K then!
Stay bullish on India! Stay invested
Disclaimer- The views expressed in this blog are personal opinions and are shared for educational and informational purposes only. They should not be considered as financial, investment, or legal advice. I write primarily to document my own learning and thinking process. I am not a SEBI-registered investment adviser, research analyst, or financial influencer, and no part of this blog should be seen as a recommendation to buy, sell, or hold any security. Please do your own research or consult a qualified professional before making any financial decisions.
Life is all about Compounding! 