Lesson from Sensex Journey from 100 to 50000

Journey Of Sensex from 100 to 50000

In a decade equity markets have seen many ups and down but in the end it rewarded the ones who stays invested with patience. This proves that correction is temporary but gains are permanent.

So if someone invested Rs.1 Lakh in 1986 would have grown to Rs. 3.9 Crore in just 40 years which is approx 13.68% CAGR ( Compounded Annual Growth Rate ). We at Earnstock, has been always advocating to give priority in investment over trading.

So today we are presenting some lessons from the journey of Sensex by Nilesh Shah, President and Managing Director of Kotak Asset Management Limited.

  • Investment is all about common sense, which is not so commonly available.
  • Teji Mandi ( Bull and Bear ) is like Poonam and Amas ( full moon and new moon ). The only difference is that there is no fixed pattern. In Amas always think of Poonam. In Poonam always think of Amas.
  • Trading is a very difficult way to make money. Investment is an easy way to make money ( compared to trading ). While trading, stop loss is critical, in investment averaging is critical.
  • When low-quality stocks trade at a premium over quality stocks, then it is a signal to exit from the market.
  • Bhav Bhagwan. The price will reflect most things, don’t bet against the market. Dalal Street is paved with the Paliya ( graves stones ) of people who went against the market.
  • Be Humble. Don’t have ego/over-confidence as even Lord Ravan lost Golden Lanka due to his over-confidence.
  • While we do Laxmi Pujan every Diwali, one needs to worship Saraswati Maa every day. Knowledge is critical to make money in stock market.
  • Invest in Quality: You don’t take an old Samosa home. Why take a kachra/ cheap quality of stock home? Quality never comes cheap.
  • If making money in stock market was so easy, everyone would have been rich. You have to work hard and be patient to make money.
  • Greed has no limits.
  • Don’t be carried away with money and power.

His wisdom is accumulated over many years of learning and practical experiences.

Dalal Street/Stock Market is a place where dreams are made and destroyed

The biggest learning from Sensex’s journey is that discipline is the biggest differentiator between wealth creation and wealth destruction in the stock market.

We want to caution everyone especially retail investors , who think that stock market is the place where one can make money very easily by watching some YouTube videos . In simple words stock market is not easy one need to give dedication and patience to earn money.

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