Rolex Isn’t Going To Make You Rich

It was incredible to have so many fellow Happionaires correctly detecting the company I spoke about in our last post. Congratulations to all those who guessed it correctly. The company whose stock price went up from Rs. 30 to Rs. 1800 and helped an investment of Rs. 50 lakhs grow into Rs. 30 crores in 9 years is known to every Indian. That is a return of 6000%. I don’t think any Mutual Fund or ULIP would have given such returns.

Millions of people use its products every single day. Every morning when I go to my office, I see it on the wrist of my lift man and you can see it even on the wrist’s of some of India’s richest. It is Titan Industries Limited and it is one of the several companies that have changed the financial futures of its investors.

I have never purchased a Rolex and don’t really know how much it would cost. But assuming instead of buying a Rolex in 2001, you had invested all that money in Titan, imagine the impact it would have had on your financial statement. Even a small investment of Rs. 10 lakhs would be worth over Rs. 6 crores today.

Is it risky putting all your money in a single stock? Yes of course it is. You should invest only what you are willing to lose. But if you are convinced about a particular story, and have enough for your daily needs there is no need to over-diversify. Mukesh Ambani, Anil Ambani, Laxmi Mittal and Bill Gates didn’t diversify did they? Over- diversification is a good thing for those who don’t know what they are investing in.

As an investor, I have seen a lot of new wealth being created thanks to India’s economic growth and the opportunities been given to us. Of course, we can’t take the credit for it because luck and being at the right place at the right time has a lot to do with it. People who criticize India, fail to realize the incredible opportunities that are available to us. What would we have done were we living in a place like sub-Saharan Africa or an aging bankrupt European country?

Many times, I meet people who tell me how India has slums, bad roads and a shortage of infrastructures. All that is true, but that also means there are many more opportunities available. Bad road and poor infrastructures, means huge demand for cement, machinery, technology, power and so many other things. We need to be more positive and optimistic. You can’t be a successful investor, if you area cynic or a critic. You might end up being a book critic or movie critic, but not an investor.

In Mumbai, slums are gradually going and giving way to luxury housing projects. Mills are going and have created incredible wealth for shareholders of companies like Bombay Dyeing that owned mill land. I didn’t have enough money in 2003, to buy property in Lower Parel, where a large part of the mill land was located. However, I was able to buy stocks like Bombay Dyeing, as they owned prime land.

A lot of us wonder what is going to be the next Titan? The truth is that nobody knows for sure. I however am confident that there are at least six to seven companies as of now that have the power to give similar returns over the next decade. Look around you and some of these companies will surely catch your eye.

A few people are skeptical about what I have been saying about the markets, gold and real estate. I will not argue or say anything, but instead will ask you to read the posts written around one year ago at the peak of the crash. At that time a large number of people were critical of making investments of even a single rupee. See how things turned out. Returns in excess of 200%-300% were made in a year by all those who weren’t skeptical.

Have fun and happy investing!

Yogesh Chabria

Happionaire