Hitesh Mali

What it took to earn 5x returns in last 10 years from equity markets. Over last 10 years ₹1 lakh in Nifty 100 grew to ₹3.73 lakh - In Nifty midcap 150 it grew to ₹5.7 lakh - and in nifty 250 smallcap it grew to ₹4.32 lakh. But these returns did not come in a straight line. Investors had to sit through: - Falls of 45% in large caps, 51% in mid caps and 86% in small caps. There were also long periods where markets delivered no returns at all: - Large caps for about about 3 years - Mid caps for 3.5 years - Small caps for almost 5 years And markets were negative for the meaningful part of the time: - Large caps: 16% of the years - Mid caps: 17% of the years - Small caps: 33% of the years In between, investors had to live through events like Brexit, demonetisation, banking NPA crisis, elections, trade wars and the COVID pandemic. Yet, patient investors who stayed invested saw their wealth compound meaningfully. So dear investors, If the last 18 months feel disappointing, remember that short-term discomfort is often the price paid for long-term high returns. Higher returns in the last 10 years haven’t come without deep corrections, volatility and patience. The real edge in investing is staying invested through the uncomfortable phases andnot losing hope in the India story.

Me: “Two equity analysts. One says it’s raining. The other says it’s sunny. Whom do I believe?” Swami Harshanand: “Neither. Ignore them both. Look out the window yourself.” 😀

Indian stock exchanges are closed today for Mumbai's municipal elections. The fact that our exchanges, which have international linkages, are shut down for a local municipal election shows poor planning and a serious lack of appreciation for second-order effects. As Munger said: "Show me the incentive, and I will show you the outcome." The holiday exists because no one who matters has any incentive to oppose the market holiday. It also tells you how far we have to go before global investors take us seriously.