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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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An interview to read: Next 25 years will be better than past

Posted by Muthu on February 4, 2014

I’ve given below an interview I liked. This would be useful for both new and experienced stock pickers. For those who invest only through mutual funds too, the insights offered here would be very helpful.

Damani: You started Motilal Oswal in which year?

Agrawal: 1987.

Damani: Do you remember what the Sensex was at that time?

Agrawal: I think less than 500.

Damani: Less than 500, it is now 20000. So, the Sensex itself has compounded at 16-17 percent. However in terms of absolute numbers it is up roughly 40X. So, all those people who say buy today sell tomorrow may see the point that even the Sensex has compounded or has gone up 40X?

Agrawal: Yes, but that is the tragedy right now. The holding period has come down so much, even a month is a very long period. People say that if they take delivery for a week they are long term investors. So, times have changed.

Damani: When the index itself goes up 40X individual stocks go up even more. The great winners in the Indian stock market, name a few?

Agrawal: Very recently I did this particular slide and I was stunned, I have still not recovered from that number, that ITC is the best performing stock on 25 year basis. That stock has done 35 percent compounded in 25 years. Including dividend it is almost like 2500 times in as many years.

Damani: So, you are telling me someone in 1988 had the wisdom to put Rs 1,00,000 into ITC, today it would be worth Rs 25 crore?

To continue reading: http://www.moneycontrol.com/news/market-outlook/next-25-years-will-be-better-than-past-raamdeostocks_1036656.html

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