Financial Freedom Series 2 – TTK PRESTIGE LTD.

Hi,

The second one is a classical one. Here I am Considering TTK PRESTIGE LTD.( which became a great consumer story, and we use it in our kitchens – something very in line with a Peter Lynch style of stock picking)

If we have taken a decision to invest Rs. 5000/- (The normal amount of SIP, I am doing in every month),  around 11 1/2  years back, what it will have created for us.

BSE trade details on 25- MAR- 2003 is given below.

Date	Open	High	Low	Close	WAP	No. of  Shares
25/03/03	7.60	7.60	6.80	6.80	6.91	1,000

And now I would like to invite you to see a snapshot of the live trading information given on BSE website on today (22- AUG – 2014)

  

It has delivered tremendously and became a 644 bagger in less than 12 years! 

Our initial investment of Rs. 5000/- might have become Rs. 32 .2 Lakh, almost making us financially free (based on our earlier discussed criteria) single handedly.

The 12 Years price chart is given below.

  

Naturally, You may have developed few doubts now. Like, whether I am hand picking very rare examples of 2 or 3 shares from the universe of 5000+ shares.

Not exactly, There are at least a hundred of hundred bagger in last 12 – 15 Years! But getting in to any one of these is not that easy. Only a 100 out of these became a 100 bagger in last 12 – 15 years. If we exclude the A group companies from our selection list, then also there are around 4000 companies we have to choose for.

So the probability of getting a one hundred bagger is, (if we select randomly)

Is just 100 / 4000 =  2.5%

If you want to get in to one 100 bagger, you have to select atleast 40 companies, and assuming uniform distribution you may get 1. [ I will try to analyze the financial implications of these type of selection in another separate post, later.]

But for now, for our financial freedom, selection of scrips becomes too important. Most importantly, more than 50 % of listed (small and mid caps) companies are frauds and another 25% is not bothered about retailers and least investor friendly (I am saying this with my 8+ years of experience in Indian stock exchanges). Finding out weeds from real green is very necessary to succeed in market, especially, in Indian market. In short, we need to find our gems after excluding these 75% listed companies, making our screening list to less than 1000 listed companies! But finding them reasonably young is the hardest part!!

In coming posts, we will continue to explore some other great stories, which helped its investors to achieve financial freedom. In all these post I am stressing to point out the importance of finding good companies (in all manner) and sticking with the investment long.