Sunday, August 15, 2010

Patience must pay..

Dear Readers,

Hearty Greetings to all of you on the occasion of 64th Birthday of our Motherland. I hope, all of us to pray for the prosperity of our great nation on this auspicious occasion as well for the souls who laid their todays for our tomorrows.

Its an article by Mr. Mahesh Pidshetti, Bangalore, an active participant of this blog since it’s inception. I had an intention to provide him a platform to inscribe his thoughts as a rep of our young generation, because I usually receives worthy as well genuine comments from this guy bit differ from the age group. So, we should heed him..

Over to Mahesh

We all know that in stock market, Patience is the key factor to enjoy growth. In short term, lots of negativity bombarded to our thought process influenced by Internet, TV shows and analysts, which fluctuates our patience. People wish to be long-term investors, but when short-term shakeout happens they sell it or when they see good price appreciation they books profit in the short term for small gains. When you invested in a good company, why should you sell on nominal gains? Make the shakeout as an opportunity to buy more. Stock market consists several kind of investors, Long Term + Medium Term + Short Term + Day Traders. The interesting part is, market only fluctuates due to M+S+D.

India is poised to growth and you know, why the Govt taking divestment route, trying reducing fiscal deficit? And other changes in policies. Why RBI Bought Gold by dumping Dollar, Why RJ didn’t sold out his holding when BSE hit 7800?, instead he bought more. Why investor legend Warren buffest is focusing on Indian market?. Why NTT DoCoMo increasing its stake in Tata Tele?. Why World’s Top Class Car manufacturers opening new hubs in India? And so on. Because India is @ a nascent stage of it growth. If crisis hits back again, India will be insulated because we have 40,000 tonnes of GOLD reserve, India will have Trillion dollars of assets in hand, and its huge.

Who will prevent the consumption of young Indians?. Indian economy doesn’t have any benchmark like western have developed for their economic growth. India has its own benchmark for its growth; different villages @ different corner of India have developed their own economic growth strategy. That’s the way India growth continues. India has balanced economy (export+import). Lots of revolution happening in rural India. Keep watching ET NOW Starting up show, you will know how people are creating business.

Keeping all these factors of the growth of India, following is one of the best example to give a clear picture about why sticking long term will make you prosperous than short-term, moreover long term investor enjoy more social life, sound sleep as well peace of mind.

If an investor bought 100 shares of Wipro @ Rs. 100 in 1980, 30 Years of Patience

1981 , 1:1 Bonus =200 shares

1985, 1:1 Bonus =400 shares

1986, split to Rs 10 =4000 shares

1987,1 :1 Bonus =8000

1989, 1:1 Bonus =16000

1992 ,1:1 Bonus =32000

1995 ,1:1 Bonus =64000

1997 ,2:1 Bonus =1,92,000

1999, Split to Rs 2 =9,60,000

2004, 2:1 Bonus =28,80,000

2005, 1:1 Bonus =57,60,000

2010, 3:2 Bonus =96,00,000

Multiply CMP * 96,00,000 equal to more then 300 Crore!!

From 1981 to 2010, how many crash have occurred?. Did those crashes prevented the growth of good companies?. There are several other examples for like Titan, Asian Paints, BHEL, BEL, Hero Honda etc.

India will have more young (productive) population, who will spend more than their parents. Our parents had saving mentality, we have spending mentality to maintain the status along with glamour. India will have more entrepreneurs who in turn create more jobs which in turn create increase in consumptions and the cycle continues. Next decades are the youngster’s decade. We are in to age of rampant consumption; the consumption is driven by youths. Youth demands good quality from every angle, whether its food, car, mobile, e-commerce and of course good salary too, which leads to rising income which leads to creation of more middle class families and a report says we will have 80 crore middle class population by the coming decade.


Mahesh Pidshetti, Bangalore



The blog is associated with information on Indian stock market and author’s investment view points on various emerging stocks/sectors. The contents discussed in this blog are purely my own personal opinion and in no case weigh it as any kind of recommendation for stock market investment. The sheer purpose of this blog is to educate the interested community on market related subjects based on my experience and I am, in no way, responsible for investment decisions based on the contents described in this blog.

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