Dont fall in love with only Blue Chip Companies if you came to stock markets to create wealth.
“SMALLCAPS Becomes MIDCAP & Quality MIDCAP can Turn into LARGECAP over a period of Time”
Huge Wealth can be created in small cap stocks and mid caps stocks But only If you picked up Rightly.
When Rakesh Jhunjhunwala bought Titan, it was a small cap stock & Today it hot Transformed to Large cap stock
Reliance Inds is trading at around 1400 today Do you think Reliance can become 10000 in 4 To 5 years ????? Chances are Low,Similarly SBI/L&T,HDFC BANK ETC Can give you very good year on year returns.
But QUALITY Midcap shares can multiply 10/20 or 30 times over a period of Time.
For example, HDFC Bank took 15 years (2003 to 2018) to multiply 40 times (Rs 50 to Rs.2,000) but stock like Chaman Lal Setia took just 4 years (2014 to 2018) to multiply 40 times (Rs.5 to Rs.200).Few Other examples are HEG,Graphite,Venkys,Indian Hume pipe,GM Breweries,Bajaj Finance etc.
But most of the time investors tracks only blue chip companies
Find out strong small cap and mid cap stocks and then hold them tight for few year If you have come to Stock markets, then you came for Multiply your money and not for 10-20% return.
If you want 10-18% Returns, then there are other asset class like Bank FD,NCDs,Mutual Funds Etc to name a few.
Another thing commenly observed among Retail investor is that when an investor buys a stock, he starts tracking the price immediately on daily,monthly or quarterly basis and expects the price to rise immediately as if the stock was waiting for his entry to rise Investors should concentrate on business performance instead of daily price movement. If business does well, price will eventually follow.
And 99% investors do not have that deep financial knowledge except few basic things like PE, P/B,Debt Ratio etc & Depends on News available online.
So instead of picking stocks yourself and burning your fingers, find a real expert with proven record.
When you are not well, you go to doctor.when you are in legal trouble, you go to Lawyer.Then why pick stocks yourself when it is not your field ?
Disc – All Views Expressed are personal & Purely for Educational and study purpose only.Consult your Financial advisor before Taking any decision based of above article.
2 thoughts on “Smallcap/ Midcaps Vs Largecap Wealth creation”
How to know quality mid and small cap stock