FFS 4 : A great multibagger from Agri space

This time I am taking a great multibagger from our much promising Agri sector. 

Yes it is PI Industries. If we have purchased it on year 2003 bottoms, we might have got it at Rs. 17 – 20 Range. And at present, the price is above 450. At a single look, seeing the price alone may deceive us! ( As a just 25 bagger converting 5K to 1.25 Lakh in 12 Years, but if it is like that alone, then also a superior return comparing with market averages)

Ok, let us dig little more in to the details.

As our previous examples, assume we purchased it on 22 May 2013 for 5K rupees ( 296 Shares)

Date	Open	High	Low	Close	WAP	No. of  Shares
22/05/03	16.90	16.90	16.85	16.85	16.87	3,000

What will be the present valuation of our investment?

We can dig in to the details. After our purchase of 296 shares of FV = 10/-, the gave

1:1 bonus in 2009 (making number of shares = 296 x 2 = 592 )

1:2 bonus in 2010 (making number of shares = 592 x 1.5 = 888 )

FV split from 10 to 5 (making number of shares = 888 x 2 = 1776 )

FV split from 5 to 1 (making number of shares =  1776 = 8880 )

And present price and chart is given below

So the investment is worth 8880 x 457 = 4,058,160/-

Making Rs 40.58 Lakh, making us financially free, as per my previous definition.

FFS 3: Turning Rs. 5000/- in to Rs. 25 Lakh !

Financial Freedom Series 3 – CERA SANITARYWARE LTD.

 

Another gem selected in this series. Here going with another master bet, CERA SANITARYWARE LTD. (a story played with middleclass income with better living standards, contributing to housing / real estate sector )

Again, if You have invested Rs. 5000/- in the year 2003, buy now it would have created a reasonable asset.

BSE trade details on 15- MAY- 2003 is given as below.

Date	Open	High	Low	Close	WAP	No. of  Shares
14/05/03	6.90	7.00	6.50	6.50	6.79	2,350

 And now I would like to invite you to see a snapshot of the live trading information given on BSE website on today (25- AUG – 2014)

  

Again we are getting a 500+ multibagger as the present price is after a 1:1 bonus. So the effective price is around Rs. 3356/- from a mere Rs. 6.6/-. 

Our initial investment of Rs. 5000/- might have become Rs. 25 .4 Lakh, beating almost all other investment returns!!

The 12 Years price chart is given below.

I would like to give 3 more examples in this series, which delivered super natural returns, just to show, if we have conviction in a particular business and company we should remain long and long and long!! 

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.

Financial Freedom Series 1 - Symphony Ltd

Hi,

The first one in this series, I am taking Symphony Ltd ( which became a great turnaround story, and they produce air coolers)

If we have taken a decision to invest Rs. 5000/- (The normal amount we SIP now, in every month), exactly 10 years back, what will that means to us. We can check and dig in to details.

The trading details of this stock, 10 years back on BSE will show like this. ( You can yourself crosscheck this with BSE site!)

Date	Open	High	Low	Close	WAP	No. of Shares	No. of Trades	Total Turnover	Deliverable Quantity	% Deli. Qty to Traded Qty	* Spread
											H-L	C-O
6/08/04	4.10	4.10	3.36	3.36	4.07	1,450	6	5,908	1,400	96.55	0.74	-0.74

A delivery of 1400 shares with average traded price of 4.07/- per share. So for our Rs. 5K we may be able to buy 1228 shares of Symphony Ltd (with a FV = 10 Rs).

Now come back to present day. After 10 years exactly, the trade details will look like this

Date	Open	High	Low	Close	WAP	No. of Shares	No. of Trades	Total Turnover	Deliverable Quantity	% Deli. Qty to Traded Qty	* Spread
											H-L	C-O
6/08/14	1,120.00	1,120.00	1,070.05	1,072.25	1,097.51	2,282	600	25,04,514	1,161	50.88	49.95	-47.75

So how much it will worth your investment now?

Let us take the average price Rs. 1097/- as indicative for calculating the net worth. Also note that the present face value( FV = 2 ) makes our earlier investment in to 5 times.
So, we will be holding a total of 1228 * 5 = 6140 shares today.
The total value will be 6140 * 1097 = Rs. 6,735,580/-

So just a 5K initial investment will worth Rs. 67. 35 Lakh , making you Financially sound!

10 year price chart

[In coming posts, we will see seperately, what made these investments to achieve this much growth]

Financial Freedom Series

Hi Friendz,

Majority of Us always dreams to become financially free on one day or want to make it big and become Extremely rich. Becoming wealthy is having different meanings for different people.

Some may want millions or billions, with luxurious bungalow  and cars etc. So the upper bound we cannot measure. Any how the lower level or middle class variant can be measured as amenities for the minimum requirements.

How much it will cost and how we can define a person is wealthy or not? By different terms, I am choosing one of the best. Majority of us depends on our salaries or daily job or business (explicitly means personal business with involving our physical presence to a great extend) income for our monthly expenses. What happens if we stop working (or ding business) from today? Majority of us will find it difficult to survive.

And now wealth can be defined pretty well as   “a person’s ability to survive so many number of days forward with his passive income or bank balance".

So if you are generating passive income to cope with your total monthly expense you are literally wealthy!!

[Let us take an example, if your monthly expense from all source is 20000/-, then your annual expense will be 2.4 Lakhs. Now suppose you have an after tax FD with 7% return, then An investment of 34.28 Lakhs will make you wealthy by producing 20K per month!] 

Assumption: So now let us analysis how we can term a person wealthy on our Indian background. For a small family, I am assuming it at present with  Rs. 30,000/- per month. If your investment producing you a 9% assured (interest or any other possibility) return then you will need 3.6 Lakhs annually to survive your expenses. So you require to have Rs. 40 Lakhs exclusively as investment which generates passive income for your monthly expenses.

[All these are based n present day calculation, and inflation will be having an effect on the specified amount going forward] 

So the Trigger amount is Rs. 40 Lakhs to declare you as wealthy person!. And you are financially free and you works only because you love to work!! and NOT because of any financial obligation. So that means financial freedom!

So in this financial freedom series, we are looking in to single investment opportunities existed in past ( in last 10 - 15 years ) and a mere nominal amount of investment on that single share will make you financially free, provided you still hold the shares.

Some may be wondering  why I am making such a study, since its past data and past history. We cannot do anything for that investment decisions today. But my point is to MOTIVATE ALL, AND MAKE THEM UNDERSTAND THE IMPORTANCE OF HOLDING SOUND COMPANIES LONG, irrespective of short fluctuations.

SIP for AUG 2014 and Portfolio

Hi,

Almost a flat month passed, waiting for result season.

This month added Kopran ( 96 no.s at 52/-), is another repeat recom from VP, and selecting it because of changing scenarios and future plans.

Now the present portfolio

Company	No. of shares (Quantity)	Avg Buy Price	Initial Investment	CMP	Value at CMP	Gain in %
Arrow Coated Pro	257	77.21	19,843.00	119.5	30,711.50	69.67
Ashapura Min. Lt	80	61.5	4,920.00	67.45	5,396.00	33.25
Bambino Agro Ind	160	62.5	10,000.00	61.15	9,784.00	2.4
Camphor & Allied	20	217	4,340.00	336.15	6,723.00	58.82
EPC Industrie Ltd.	90	110	9,900.00	190.55	17,149.50	97.77
Granules India L	32	305	9,760.00	639	20,448.00	80.98
Jai Balaji Industrie	330	13.5	4,455.00	23.8	7,854.00	104.07
Liberty Shoes Li	56	178	9,968.00	269.5	15,092.00	38.76
Nath Bio-Genes	123	81	9,963.00	160.1	19,692.30	37.65
Nitco Ltd.	330	15	4,950.00	17.15	5,659.50	48.33
Orchid Chem & Ph	55	54	2,970.00	72.8	4,004.00	46.85
Simran Farms Lim	215	13.8	2,967.00	22	4,730.00	55.43
Tata Chemicals	35	284	9,940.00	346.3	12,120.50	20.6
V2 Retail	330	15	4,950.00	15	4,950.00	1
Kopran (new)	96	52	4992.00	52	4920.00	-1
Total			1,15,000		169,234.30	47.2 %