Biggest Wealth creator and destroyer in the last 20 years in the indian stock market

 

Biggest Wealth Creator

• Rs 10,000 invested in Eicher Motors in 1992 is worth today - Rs 80 lacs
• Rs 10,000 invested in Asian Paints in 1986 is worth today at Rs 90 lacs
• Rs 10,000 invested in Dr Reddy’s Labs in 1986 is worth today at mindboggling Rs 10 crores.
• Rs 10,000 invested in Shree Cement in 1990 is worth today at Rs 2.90 crores.
• Rs 10,000 invested in Torrent Pharma in 2008 is worth today at Rs 2.19 lacs (approx) (that’s more than 21 times in 9 years)
• Rs 10,000 invested in Granules India in 2008 is worth today at Rs 2.97 lacs (almost 30 times in 9 years) (Stock was at Rs 28.20 back in 2008 and there was split in face value from 10 to 1 in 2015)
• Hold your breath for this one. Rs 10,000 invested in Ajanta Pharma in 2008 would be worth today at Rs 24.42 lacs. (More than 240 times in 9 years)

Barring these companies there are many companies which have grown tremendously in the last 20–30 years. We all have read about the investing returns from Infosys and Wipro over the last 3 decades.

There are companies like Bajaj Finance, BPCL, Lupin, Natco Pharma and HPCL which have delivered 50–60x over a period of last 20 years.

Biggest Wealth Destroyer

The BSE Sensex has gone up at a CAGR of 17% over the past five years(16-21), generating over 110% returns. Many stocks fell by more than 95% in the past five years.
If you had invested ₹1 lakh in these stocks in 2016, you would now be left with a mere 2000.

Retail Investors Love yes bank

It happens every few years, such big companies gets eroded off the market. These type of capital erosion happened in the past also. Do a periodic check of your portfolio. Don't gamble. Invest 95% of your money via a mutual fund manager. All of these above companies have a very large holding by public now because we think we are buying cheap.

The stocks like DLF, Reliance communications, Suzlon, JP associates and Unitech have lost more than 90% from 2008 to 2015.

There is a very good chance that we might end up choosing one of the above stocks in our portfolio and end up keeping it because of various biases and fallacies in our mind. It's always good to have a diversified portfolio of around 10 Stocks. If you have around 30 stocks, better go with a MF route.