If you regularly watch business channels then you would have
noticed the change in tone of media and the market experts on TV channels with
respect to the advice they give on markets. Since last couple of months, and in
case of some experts since last year or so, are coaxing you, the retail
Investor, to INVEST in Equities (i.e. Stocks) &/or Equity Mutual Funds.
However, this is my advice to you, the INVESTOR & my BLOG readers…
Please IGNORE what the pundits are
saying & I strongly urge you to NOT invest in Equities
(I.e. Stocks & Equity Mutual
Funds) in the year 2013…
Although this goes against what I usually speak on CNBC Awaaz
financial planning show YOUR MONEY on which I appear regularly (click on the
links below to watch my recent show on CNBC Awaaz:
I have a selfish
motive involved here when I say that I do not want YOU to invest in Stock
Market/Equities:
I do
not mind if you stay away from EQUITIES because:
1. While you keep your
money in low interest bearing Savings Account (earning a meager 4, 5 or at
best 6% per annum) or while you earn taxable 9% per annum in Fixed Deposits, I shall
continue to buy HDFC Bank, Indusind Bank or the likes
of Yes Bank
which are up 3.5x
times, 11.0x times & 5.9x times respectively since DEC 2008.
2. I also urge you to
pay all your EMIs diligently and on time so that retail loans given by banks do
not get into trouble and my banking stocks appreciate further from here.
3. I would also urge
you to continue buying GOLD even at these inflated levels (please
ignore what the Indian Govt. is saying) so that I continue making supernormal
returns in “Titan
Industries “and other jewelry companies because while GOLD might
be up 2.58x times in last four years, the stock of Titan Industries, which
retails gold, is up 6.90x times during the same period.
4. I would also urge
you to buy “Real
Estate” and do not forget to take a Home Loan for the same
especially from HDFC & LIC Housing Finance. That is how I
made 2.8x
times & 5.7x times respectively in these stocks over the
past 5 years.
5. Also, while you buy
or construct your house, please insist on buying the best quality construction
material, may it be Cement, Sanitary Ware or anything else. Because it is
because of you that I could make 192% on ACC and 4.5x times on Hindustan Sanitary ware
since 2008. Also, please buy decorative paints from Asian Paints only, so that I
can make 4.8x times on it over last 4 years.
6. If you are done with
putting money in Bank FDs, Real estate & Gold, and there is still some
money left to waste, I would urge you to buy Insurance products so that
while you pay hefty double digit commissions to your agent and yourself make
low single digit returns on your Money back & Endowment plans, I would have
made 6.0x
& 2.0x times returns respectively on Insurance company
stocks like Bajaj
Finserve & Max India.
7. Also, having
invested intelligently in Bank FDs, Real Estate, Gold & Insurance, please
feel free to pamper yourself by going to a mall, watch movie in a multiplex and munch
some popcorn so that while you have been spending on movies
& entertainment, I have made 2.7x times, 3.0x times, 3.0x times & 3.5x times
returns respectively on stocks like Phoenix Mills, PVR, Zee telefilms & sun TV
since 2008. Hey, do not forget to take your dinner at Dominoes so that I
continue making 5.4x time’s return that I have made on Jubilant
Foodworks since its IPO in 2010.
8. Also, your car must
be pretty old now. Why don’t you upgrade to the latest model and let me do the
boring job of owning stocks like Maruti & Bajaj Auto that are up 2.9x times
& 10.8 times respectively since 2008. Or keep buying the
macho motorcycle Enfield so that I keep making 12.0x times
returns that I have made on Eicher Motors since 2008 and continue making
some more money.
9. Also, please
continue smoking
& drinking so that I continue making 3.80x times return on ITC,
10.3x times
on United
Breweries & 2.2x times on United Spirits in four
years.
10. Last but not
the least, god forbid, if you over indulge yourself & have to visit a hospital,
or buy medicines, I shall continue to make 3.8x times on Apollo Hospitals, 4.0x times
on Dr.
Reddys & 2.3x times on Cipla.
SO now I have given you 10 strong
reasons to NOT INVEST in EQUITIES but continue being the CUSTOMER of the
companies whose stocks I own…that way, you are happy enjoying their services or
products
& I am happy making triple digit returns by owning the stocks of the very
same companies…
|
Top Stock Performers since Dec 2008
|
|||
|
Stock
|
Returns over the past 4 Yrs.
(%) |
Value of Rs. 1 Lac invested in
Dec 2008 (Rs.) |
How many
times (x.0) |
|
Sensex
|
19.28%
|
1,19,280
|
1.19
|
|
Eicher Motors
|
1034.00%
|
11,34,000
|
11.34
|
|
Bajaj Auto
|
968.00%
|
10,68,000
|
10.68
|
|
Bajaj Finserv
|
543.00%
|
6,43,000
|
6.43
|
|
Titan Industries
|
539.00%
|
6,39,000
|
6.39
|
|
LIC Housing Finance
|
491.00%
|
5,91,000
|
5.91
|
|
HSIL
|
351.00%
|
4,51,000
|
4.51
|
|
Dr. Reddys
|
289.00%
|
3,89,000
|
3.89
|
|
Apollo Hospitals
|
260.00%
|
3,60,000
|
3.60
|
|
HDFC Bank
|
247.00%
|
3,47,000
|
3.47
|
|
PVR
|
198.00%
|
2,98,000
|
2.98
|
|
ACC
|
192.00%
|
2,92,000
|
2.92
|
|
Maruti Suzuki
|
183.00%
|
2,83,000
|
2.83
|
|
Cipla
|
118.00%
|
2,18,000
|
2.18
|
|
Max India
|
108.00%
|
2,08,000
|
2.08
|
If you have a
hard look at the table above, you will notice that while Sensex has given a
meager 19.50% returns over 4 years between Dec 2008 and Dec 2012, Stocks like
Eicher Motors have gone up 10.0x times or Titan Industries have gone up by 6.40x
times and so on over the same period.
Now I leave it
up to you to decide whether you want to be a consumer only of the above
mentioned companies are do you want to join in their wealth creation party by
partly owning some of the above phenomenal stocks…
Now a
few caveat here….
Please
don’t think that I am recommending you to buy the above-mentioned Stocks….
Because
since these stocks have gone up so much over the past 4 years, some of these
are no more cheaply valued & hence are not a very attractive investment
options today.
By
writing this article I am trying to bring home the point that there is no
better investment option available in India today than investing in Stocks or
Equities especially because this is a rare asset class that is not overvalued
today as returns over past four years of Sensex companies are nothing to write
home about.
Gold,
Real Estate is already overvalued. Not that they may not give returns going
ahead but that party is already in midnight whereas the Equity party has just started.
It is still not late to enter that party. and it absolutely makes no sense to me why somebody would park his money in Bank Fixed Deposits earning a meagre 9 to 9.50% and then paying 30% tax on the same. (Please read my article "The Rich Man's bank accounts" to get a perspective on the same (http://niravpanchmatia.blogspot.in/2011/03/rich-mans-bank-accounts.html)).
Also,
this is the first time that I have borrowed an article. Till date whatever I
have written on this BLOG was all Original content. This article appeared in
Outlook Business recently and was penned by Samir Arora. I found it so
enlightening & full of wisdom that I thought it fit to share it with you
all.
EQUITY
shall be the asset class of 2013, 2014 and so on…
Those
who will be out of Equity (read Stocks and Equity Mutual Funds) in 2013 will miss
the party…
The
CHOICE is yours…
By the
way, the title of this blog, Common Stocks & Uncommon Profits is also
the name of a very famous book authored by Philip Fisher, one of the most successful stock
market investor who was admired by my Guru Warren Buffett himself. If you can
get hold of that book, it is worth a read…
HAPPY
INVESTING in 2013...
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