What is the best way to invest in stocks? In 2007, you could have made money by throwing a dart at a list of stocks and investing in whichever name it landed on.
With 8 out of 10 active stocks rising, you would have been dumb not to
MUMBAI: What is the best way to invest in stocks? In 2007, you could have made money by throwing a dart at a list of stocks and investing in whichever name it landed on. During the year, eight out of 10 stocks scored gains. You would have lost money only if your dart was unlucky enough to land on one of the other two.
In all, 2,126 stocks, constituting 82% in the 2,590 actively-traded stocks on the Bombay Stock Exchange (BSE), witnessed an appreciation in prices as on Christmas-eve. With four sessions still to go before the year ends, that situation may change, but not substantially.
So far, you didn’t need much luck. To hit big money, though, your dart would have had to land on something that took off like a rocket during the year. Take this little-known company called Cals Refineries (Cals what?). If you had invested Rs10,000 of your life’s savings last year on December 29 in Cals, your investment would be worth Rs2.34 lakh on Christmas-eve this year. You would have done equally well with Lloyds Metals, with the same Rs10,000 growing to Rs2.17 lakh.
Even with minor luck, you would have doubled your money. Share prices of 840 companies (which account for nearly one-third of the actively-traded stocks) doubled in 2007. However, the number of multi-baggers (stocks that multiplied 10 times of more) stood limited at 13. The returns among multi-baggers varied from 1,019% (10 times) to 2,344% (23 times). Not surprisingly, smaller companies surged the most. Sahara Housing surged 2,008% from Rs45.50 to Rs959.
Sixty-nine stocks gave returns between 501% and 1,000% and 755 stocks between 100% and 500%. Not a bad year for investors who had the courage and the tenacity to hold on to their investments.
However, in value terms, the largest wealth creator was — you guessed right — Reliance Industries. The market value of this Mukesh Ambani flagship more than doubled (119.47%) from Rs1,77,025 crore to Rs4,05,285 crore — a gain of Rs2,28,260 crore. The share price of Reliance Industries moved up from Rs1,270.35 to Rs2,788 during the year.
The next three slots were occupied by public sector undertakings (PSUs). The government is sitting on huge paper wealth. MMTC, with a Rs1,22,986 crore market capitalisation gain, ranked second after Reliance, followed by NTPC (Rs82,331 crore) and ONGC (Rs80,710 crore).
Larsen & Toubro ranked fifth with a gain of Rs78,551 crore in 2007. Telecom major Bharti Airtel recorded a rise of Rs64,905 crore while Anil Ambani’s Reliance Communications witnessed a market value gain of Rs53,207 crore in 2007.
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