Site Loader
Spread the love

     It took years of reading, learning, experimenting and believing to understand there is NO holy grail for investing.  Infact, it is a very simple method which takes lot of hard work to find winning stocks.  The hardest part is executing what we believe in and patiently waiting for compounding to work its magic.  All of us know the power of compounding and have heard of it enough already.  It takes a stable and calm mind to make meaningful decisions in investing.  Therefore, it makes enough sense to learn how to invest our hard earned money.  Time and money go hand in hand.  Longer the time, better the result of compounding, but this works like a magic only if the investment decision is correct.  THAT is exactly what I would like to highlight here.  Stock Selection.

     When I started reading the book “One up the Wall Street” it felt like Mr. Peter Lynch was talking to me.  This book needs to be read several times for it to sink in our mind and influence decision making.  Far too often people discount a simple method assuming “making money can’t be that simple”.  All the great investors like Peter Lynch, Warren Buffet, Ramesh Damani, Rakesh Jhunjhunwala have held their investments for years.  There have been enough macro or micro events and several recessions but still they are the richest investors.  So, staying invested in what we believe is the biggest virtue in long term investing.  Having said that lets look at the simple method of stock selection.

     Stock selection could start from kitchen, backyard, traffic jam or simple common sense.  Does it sound very difficult or impossible?  Let’s dig deep.  Let’s say you wake up and brush your teeth.  What paste was that? Ah colgate? Have you seen the performance of this stock or considered it for an investment? How about that soap you used to feel refreshed? Guess it came from Hindustan Unilever or Dabur?  What’s for breakfast? Tea/Coffee/Horlicks from Hindustan Unilever and Bread from Britannia.  You feel comfortable wearing Bata footwear.  You commute with a bike that comes from Eicher Motors or Bajaj Auto, Car from Maruti.  You bank with HDFC Bank, home loan from HDFC Ltd.  You celebrate with friends on a Dominos Pizza coming from Jubilant foodworks.  Your kids love Maggie noodles or Milo or Kitkat etc coming from Nestle.  Haircare from Marico.  Healthcare from Cipla, biocon etc.  We can go on; probably we should stop here and look for how these companies have done in past 10 years.

Below is the table showing performance of each of the above stocks in the past 10 years.  Please note numbers are taken from websites and may not tie with investor reports.  Idea is to show approximate return on investment in equity on stocks we picked from daily life.

Stock Performance 10 years
Colgate 17%
HUL 23%
Dabur 19%
Britannia 34%
Eicher Motors 43%
Bajaj Auto 15%
Maruti 17%
HDFC Bank 22%
HDFC 17%

The return exceeds any other asset class.  Equity is one of the best asset classes that beat inflation.  With this method in mind one can find many more great performing companies which lead to long term wealth creation.  It lives up to saying “Buy Right, Sit Tight”.  Sitting tight on wealth creating stocks is the final test of patience, that’s how value investors are made. 

To Summarise:

  1. Invest in what you know and understand.
  2. Whoever says whatever, invest only if you believe in that stock and it is backed by study.
  3. Do not make emotional decisions.  It’s all about practicality and results here.
  4. Back your decisions with good study.
  5. Hold on to good stocks, but be flexible to book profits when needed.  Nothing is forever.
  6. Keep it simple.  Do not try being perfect.

Peaceful Investors enjoy the journey not just the destination.  Have you observed DMART while shopping 🙂 what do you think of that stock?Happy Investing.  See you soon….

Spread the love

Post Author: rashmi

51 Replies to “STOCK SELECTION”

  1. Have been reading your blogs. The concept of keeping it simple/ peaceful is breathed into your blogs as well. I liked this one very much. Keep writing.

    1. Thanks Vaibhavi, for the feedback. It helps. I started enjoying the financial journey when I avoided noise. Simplicity rocks.

  2. I am very happy to read this. This is the type of manual that needs to be given and not the random misinformation that is at the other blogs. Appreciate your sharing this greatest doc. Ava Jamey Dalston

  3. If you are going for most excellent contents like me, only go to see this web site every day as it gives feature contents, thanks sverige till new york Britt Demetre Nitz

    1. Excellently written, at times it is difficult to digest trading simple can also gives far better results but it is true.
      Great Rashmi keep it up .⚘⚘

  4. Its like you learn my mind! You seem to understand a lot about this, such as you wrote the e book in it or something. I think that you could do with some percent to power the message house a little bit, but other than that, that is excellent blog. An excellent read. I will certainly be back. Nicole Douglass Maryjo

  5. Can I simply state what a relief to discover a person who in fact understands what theyre discussing on the internet. You most definitely know exactly how to bring an issue to light and make it vital. More individuals need to read this as well as recognize this side of the story. I angle think youre not extra prominent since you definitely have the gift. Claudette Alisander Senzer

  6. Right here is the right webpage for anybody who wants to find out about
    this topic. You understand so much its almost hard to argue with
    you (not that I really would want to…HaHa). You certainly put a new spin on a subject that’s been written about for decades.
    Great stuff, just wonderful! asmr 0mniartist

  7. Hi! I realize this is sort of off-topic however I needed to ask.
    Does running a well-established website like yours require a large amount of work?
    I’m brand new to operating a blog however I do write in my journal
    daily. I’d like to start a blog so I can easily share my experience and thoughts online.
    Please let me know if you have any ideas or tips for new aspiring bloggers.

    Thankyou! asmr 0mniartist

    1. Hi,

      Thanks for taking time to check the content. I am not very sure if I am the right person to guide you on this. I have not really done anything unusual to run this blog except to write what I know and think it could be useful for all. As long as we love writing and publish good and useful content it does not feel like too much. However, a person who is good with technology would do wonders.


  8. Right here is the perfect webpage for anyone who wants to find out about this topic.
    You know a whole lot its almost hard to argue with you
    (not that I really would want to…HaHa). You definitely put a new spin on a
    topic which has been written about for a long time. Wonderful stuff, just wonderful!

  9. I’m not that much of a online reader to be honest
    but your sites really nice, keep it up! I’ll go ahead and bookmark your website to come back down the road.
    All the best

  10. We are a gaggle of volunteers and starting a new scheme in our community.
    Your web site offered us with useful information to work on. You’ve done an impressive
    activity and our entire community might be thankful to you.

  11. Hi my family member! I wish to say that this article is amazing, nice written and come
    with almost all important infos. I’d like to see extra posts like this .

  12. Thanks for sharing your info. I truly appreciate your efforts and
    I will be waiting for your next write ups thanks once again.

  13. scoliosis
    I’d like to thank you for the efforts you have put in writing this blog.
    I really hope to view the same high-grade content from you later on as well.
    In fact, your creative writing abilities has motivated me to get
    my own, personal website now 😉 scoliosis

  14. scoliosis
    Hi there, I enjoy reading through your post.
    I wanted to write a little comment to support you.


  15. Thanks for a marvelous posting! I genuinely enjoyed reading
    it, you will be a great author. I will make certain to bookmark
    your blog and will come back later on. I want to encourage that you continue your great
    work, have a nice morning!

  16. This is very interesting, You’re a very skilled blogger.

    I’ve joined your rss feed and look forward to seeking more of
    your great post. Also, I have shared your web site in my social networks!

  17. Hey there! Someone in my Myspace group shared this website with us
    so I came to take a look. I’m definitely enjoying the information. I’m bookmarking and will be tweeting this to my followers!
    Great blog and excellent design and style.

  18. Simply want to say your article is as astonishing. The clearness in your post is simply spectacular and i can assume you’re an expert on this subject. Well with your permission let me to grab your feed to keep updated with forthcoming post. Thanks a million and please carry on the gratifying work.

  19. Great blog here! Also your site loads up fast!

    What host are you using? Can I get your affiliate link to
    your host? I wish my website loaded up as fast as
    yours lol

  20. My partner and I stumbled over here different
    website and thought I might as well check things out.
    I like what I see so now i’m following you.
    Look forward to finding out about your web page yet again.

  21. I was very happy to find this site. I want to to thank you for your time for this fantastic read!! I definitely savored every part of it and i also have you bookmarked to check out new things in your website.|

  22. That is really interesting, You’re a very skilled blogger. I’ve joined your rss feed and sit up for in quest of extra of your wonderful post. Additionally, I’ve shared your website in my social networks|

Comments are closed.