Wishing all investors and readers a Healthy and Prosperous New Year!..
Let us start with the review of our performance.
First stock recommended as a buy was Venky's in May 2009. In all 28 stocks have been recommended and the average holding period of stocks is 794.71 Days (2yrs 2months and 5 days)
- On absolute basis we have earned a return on 10.78%.
- On annualized basis we have earned a return of 4.95% each year
Dividend reinvested the numbers look much better.
- On absolute basis stocks have returned 16.18%
- On annualized basis stocks have returned 7.43% each year
Considering only recommended "Best Buy" stocks (dividend reinvested.)
- On absolute basis "Recommended Best Buy" stocks have earned 17.87%
- On annualized basis "Recommended Best Buy" stocks have earned 7.35% each year
Only dividend paying stocks the returns would have been much better (dividend reinvested)
- On absolute basis dividend paying stocks have earned:- 36.94%
- On annual basis dividend paying stocks have earned:- 16.51% each year.
A hypothetical condition.. if we had some how invested only in Profit making stocks(dividend reinvested).
- On absolute basis "Only Winners" stocks would have earned:- 63.25%
- On annualized basis "Only Winners" stocks would have earned:- 28.60% each year
A hypothetical condition ... if we had somehow invested only in "Loss Making" stocks
- On absolute basis "Only Loosers" stocks would have earned:- -ve30.90%
- On annualized basis "Only Loosers" stocks would have earned: - -ve 14.42 % each year.
Interestingly .. out of recommended 28 stocks 50% ie.14 stocks are reporting profit and 50% 14 stocks are making losses.. The Law of averages are catching up!!. but losses are -ve30.9% while profits are 63.25%.
Take Away:- Looking at all the info..the best investment strategy is to do stock selection but invest in dividend paying stocks only.
Outlook :- I was listening to all the market pundits in TV channel.. it seems everyone is pretty positive about markets... Looking deeper it seems stock selection is the important point.. and there are bull markets and bear markets in sectors. Fundamental value investing with local consumption is the theme.
Personally I am not so optimistic.. and think this is the new "Normal" "Peak Energy" is the underlying reason.. Energy is no longer cheap which will encourage people to pick and choose what they want to do and what
they dont want to do. A lot of industries will be much smaller in the future.. and hence we need to be very selective. BASEL III, ecologically responsive, Peak oil, minimalistic, Green .. all point to less consumption..
Property prices are sure to drop from these levels.. Gold is only for a complete breakdown of financial systems.. Stocks if properly selected is worth investing at these levels.. Personally I feel GAEL,Jayant NHPC and Tata Comm are all future ready stocks.
=happy investing
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