You would be a crorepati now if you had made most of 2008 crisis! These stocks gave 1000% to 30,000% returns
Did you know there are more than 152 companies listed on NSE that have recorded between awhopping 1000% to 30,000% growth in 10 years?
When we talk about investment in equities, the first few words that come in mind is sentiment, no guarantee, critical, etc. But there are two quotes by equity king Warren Buffett, that bodes well for stock markets. At first he says, ‘Be fearful when others are greedy, and greedy when others are fearful.’ Stock markets are somewhat like that, when everything is crumbling find a way to make most of it and this investment pool will then have massive surprises stored in it for you.
The second quote of Buffet which makes equities even more exciting is: ‘The stock market is a device for transferring money from impatient to patient.’ This definitely is true, as equities are always best long term investment. These two quotes also best describes the 2008 crisis and today’s current scenario, especially for Indian equities.
Buffet has walked the talk, after all the ace investor was one who invested against ''nature''. When everyone was selling their shares amidst global crisis, Buffet earned about $10 billion from the profits.
Just like Buffet, if you had taken advantage of some of the Indian stocks in 2008 crisis, today you would be sitting on pile of money - a crorepati.
A background check: The financial crisis in 2007 - 2008, which is also known as the global financial crisis, has been defined by many economists as the worst financial crisis after the Great Depression in 1930s.
In 2007, the crisis took place in the form of subprime mortgage in United States, and turned into a full-blown international banking crisis with the collapse of investment bank Lehman Brothers on September 15, 2008.
This financial crisis was a result of downturn in economic activity leading to the Great Recession of 2008–2012 and contributing to the European sovereign-debt crisis.
Indian markets were also burnt in ashes during this crisis. Many foreign investors withdrew their money from markets globally including India, in the fears of the crisis, this led to stock market crash in the country. Even the Indian rupee did not survive as it depreciated massively.
But guess what! If you were among those investors who were greedy for equities even when everyone was fearful during the 2008 crisis, then you are bound to reap fruits in the current scenario. Did you know there are more than 152 companies listed on NSE that have recorded between a whopping 1000% to 30,000% growth a 10 years. In fact these companies from 2008 to till date are the best investment success stories. Not only this, the amount of returns they have given is better than any Indian schemes.
There are 10 stocks that gave from 9,500% to nearly 30,000% return.
In a decade, Rana Holding gave the most return up to 29,574.70%, followed by Caplin Point Lab by 27,910.3%, Avanti Feeds by 20,910.40%, Symphony by 23,245.9%, Relaxo Footwear by 19,104.2%, Bajaj Finance by 19,250.7%, Ajanta Pharma by 11,209.7%, Bharat Rasayan by 11,467.6% and La Opala RG by 9,546.6%.
Some of the major companies that gave between 1,000% to 10,000% return were - Apcotex Industries, Poly Medicare, TCS, Finolex Industries, V-Guard Industries, Arvind Ltd, Atul Ltd, Astral Poly, Hatsun Agro Products, Bata India, Amara Raja Batt, Supreme Industries, City Union Bank, Natco Pharma, HEG, Bayer Crop Science, Graphite India, Abbott India, Sundaram Finance, Mindtree, Whirlpool India, Indraprastha Gas, Balkrishna Industries, Gruh Finance, Kansai Nerolac, MRF, Berger Paints. TVS Motor, Maruti Suzuki and more.
In fact, earnings in these companies are way better than your investments in fixed deposits and government schemes like National Pension Scheme. here is an example on how this works out.
Starting with fixed deposits there are top 10 banks that give better returns on FDs for 7 days to 10 years period are - Axis Bank, Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, HDFC Bank, ICICI Bank, SBI and Yes Bank.
FDs are safest form of investment where you can park your ideal cash for a guaranteed return for 10 years period. This is available for every age group, and generally have higher returns for senior citizens.
Currently, Yes Bank gives the highest return on FDs up to 7% per annum. If you have invested about Rs 50,000 as FD at 7% interest rate for 10 years, then your interest earned is Rs 50,483.17 which makes your total earnings up to Rs 1,00,483.17 by end of 10th year.
(Image source: Policy Bazaar)
Now coming to NPS which is most effective and best retirement solution scheme. Let’s say, at the age of 25, you began investing Rs 2,000 every month in NPS for a retirement period of 50 years of age. This means you invested about Rs 6 lakh for 25 years. With this you generated about Rs 12.98 lakh as interest and your overall pension wealth was at Rs 18.98 lakh. From the amount, you can save tax up to Rs 1.80 lakh.
Generally, NPS is considered better than FDs. But equities are always the best money making machine than any other investment pool.
(Image Source: HDFC Securities)
If we take the top 10 companies that gave return in the range of 9,500% to 30,000%, then your gains will be in lakhs and crores.
Talking about Rana Holding, in September 2008, the stock price was ranging at Rs 84 per piece. Let’s suppose investor purchases 500 shares of this company at Rs 84, then total investment was up to Rs 42,000 and earnings now are Rs 1.24 crore. The company has touched an high of Rs 2,799 on NSE.
Similarly, other companies have also given hefty returns in 10 years time.
Why invest in stocks?
Equities are the most fragile platform for investment, however, they are also potentially the best return provider for your hard-earned money.
The reason to choose stock instead of other options like bonds, rare coins, FDs or even NPS, is because they provide the highest potential returns.
Investing in stocks is always better for long term, as no other type of investment tends to perform better. For stocks, there is a saying, the higher your risk, the higher will be your return.
It would not be wrong to say, that stocks do not have their own pros and cons. Where on the upside they provide you best return, on the downside stocks tend to be the most volatile investments.
This means that value of stocks can drop any moment for short term. Not only this, sometimes the stocks can also fall for a protracted period.
For example, the 10-year return for the S&P 500 was negative as recently as late 2010, something that can be blamed on 2008 financial crisis and the early 2000s tech bubble bursting.
Any bad luck or bad timing can easily dent your returns in stock market, however, 0ne can minimize this dilemma by taking a long-term investing approach. Hence the case, if you had invested in the above mentioned stocks in 2008 crisis, then today earned big on your investment.
One thing is true there is no guarantee you will receive any positive return. But if you manage to choose the right stock, at the right time which has great fundamentals and business portfolio, even if it declines in short term you can stay put for longer period, and you are bound to earn more.
Mantras for investing stock markets.
Younger ones can afford to take greater risk of stock market, as they have the time in their hand and longer term is best option for investment.
Making investment companies with strong fundamentals are best options. These are the ones which have the potential to withstand market pressures, and perform well in the long term. Hence, companies which have strong management and competitive advantage are always best investment option.
Do not get lured by penny stocks. You may believe they give higher returns like 6-10% a day against top stocks that rise 6-10% in a year; you will typically enter at peak and then make losses. Hence, a company with strong fundamental which has optimistic growth, is a stock worth investing, even it is sold at pennies at entry-level.
Always remember equity investments cannot be sold back to the company or promoters. Whatever the gains or losses are, you will bear it not the company.
Do not be greedy, always make sure to set a profit target and sell, unless there is good reasons to hold on for very long term.
Be ready and determined to explore new opportunities. They can come through technology, marketing, brands, value protections, capital, etc. You need to be able to spot those.
Invest in the small caps, which have future of becoming large caps. One should be able to recognize whether organization has the ability to scale.
Do not panic when you stock is declining. One of the drawbacks of investing in stock market, is that not everyday will be a happy one. Therefore, learn from mistakes and learn to bear a loss.
Do not invest invest your hard-earned money without proper research. Never invest according to “Stock tips”.
Always remember anything can happen in equities. Anticipate trends and go against the forces of nature in stock markets.