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Topic : Personal Finance
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Can Stock Market Provide us Unexpected Returns?

Created by : Vipin Bhasin, Private Equity/Hedge Fund/VC-Manager, Indian Investment Co.  | 06 16 2010 13:09:27 +0000
Industry : Equity Research/AnalyticsFunctional Area : Equities(Markets)
Keywords : stocks market shares return growth
Activity:  646 views;  last activity : 12 06 2010 11:06:52 +0000

If you subscribed in 100 shares of WIPRO company with a face value of Rs. 100 in 1980

In 1981 company declared 1:1 bonus = you have 200 shares

•In 1985 company declared 1:1 bonus = you have 400 shares

•In 1986 company split the share to Rs. 10 = you have 4,000 shares

•In 1987 company declared 1:1 bonus = you have 8,000 shares

•In 1989 company declared 1:1 bonus = you have 16,000 shares

•In 1992 company declared 1:1 bonus = you have 32,000 shares

•In 1995 company declared 1:1 bonus = you have 64,000 shares

•In 1997 company declared 1:2 bonus = you have 1,92,000 shares

•In 1999 company split the share to Rs. 2 = you have 9,60,000 shares

•In 2004 company declared 1:2 bonus = you have 28,80,000 shares

•In 2005 company declared 1:1 bonus = you have 57,60,000 shares

It means Present value of shares is Rs. 200 Cr.+

Other  example…CIPLA Investment of Rs. 10,000 in 1979 will fetch Rs. 95 cr.+ INFOSYS ---Investment of Rs. 10,000 in 1992 will fetch Rs. 1.5 cr.+

RANBAXY  Investment of Rs. 1000 in 1980 will fetch Rs. 1.9 cr.+

RELIANCE:- APPROX. 200 TIMES...

Lets discuss "Can Stock Market provide us Unexpected Return too?

  
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Yes Vs Never
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I feel stock market will provide us maximum return on our investment in long term. People can invest small amount as comparison to Real Estate. Yes i agree that awareness & self analysis is must before investing in any area. But diversification of our portfolio always give us best result in term of returns. Indian Economy is growing faster than before. That is why the chances of returns will also high in near future rather than losses.

Because in near future no one traditional investment plans will compete with Inflation figures...... We fear from stock market. SATYAM played major role to feel fear in market. But Only name of "Satyam" was vanished not the human resource & working power of company. We will see more return in the stock in coming years. It means period of ROI is increased but not stopped.
By Vipin Bhasin, Private Equity/Hedge Fund/VC-Manager, Indian Investment Co.  06 16 2010 13:21:36 +0000
 
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Yes, but people must keep in their mind that share market is not a CASINO. Invest in GOOD, have patience on your decision.
By Ashish Garg, Sr Manager, R R Financial Consultants Ltd  | 12 06 2010 11:06:52 +0000
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Yes, but it can be the other way around also, ie. loss due to unexpected moves by the companies. A typical example is Reliance Petroleum IPO and its merger with RIL later.

RPL collected funds through an exclusive IPO for the purpose of setting up a  new refinery. People who bought more shares later according to advice of financial analysts in various channels, at higher prices stand to loose much due to unexpected and unethical action of Reliance management. 

When the refinery was about to start production, Reliance out smarted the investors by merging RPL with RIL in 16: 1 ratio so that when the project start earning revenue, benefit will not go out to thos invested in RPL.

Even after the 1:1 bonus issue of RIL later, many have lost their investment capital. It is nothing but a breach of trust by RIL management.

In comparison, WIPRO management is class apart.


By Abraham Paul, Senior Telecom Consultant, FCOMNET- Future Groups  | 06 23 2010 10:54:18 +0000
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I agree with money market returns. We will get highest return in long term...But it is too risky for those who haven't much knowledge about it.


By monika arora, Freelancer, ITES / BPO / Customer Service  | 06 19 2010 09:38:22 +0000
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Yes it does...as we know that a lot of factors affecting the stock market returns broadly speaking Macro and Micro are not in anyones control...this means that return can be unexpected at times when things do not go as analysed however this should nt be taken in a negative way unexpected returna can b +ve as well as -ve.
By Urvish Pankajkumar Subodh, Guest Lecturer (Economics), H.L.College of Commerce- H.L. Institute of Commerce.  | 06 16 2010 13:52:35 +0000
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