Do it yourself

Some famous finfluencers of social media have recently commented that some large-cap stocks have underperformed the benchmark Nifty50 in the past couple of years, while the earnings and balance sheets of these companies have improved decently. These stocks are trading well below their peak valuations. Many of these stocks are trading well below their 5-year median valuations. The finfluencers are arguing that valuations of these stocks shall witness a “mean reversion” soon and these could give 30 to 40% return without any further improvement in earnings or balance sheet matrices. The most popular example cited by these finfluencers is the share price behavior of ITC Limited in 2022-2023. I have no issues with these social media stars. I will be happy if large-cap stocks like HDFC Bank, Kotak Bank, Hindustan Lever, etc., outperform the benchmark indices and yield a 35-40% return. I am happy to ignore the fact that ITC has yielded a negative return in the past year. My small inquisitio...

As an investor I have always been fond of stories. My strong belief has been that if the story is good, numbers will definitely chase it. To the contrary, if the story is bad, no matter how good the numbers look presently, it may not be worth investing in. Like in any other method of investing, this method also has its own limitations. Sometimes, good stories fail to sustain the momentum and lose the track midway. Sometimes, bad stories change the course and get on the right path with the help of good numbers. Nonetheless, I like the story method of investing, as it suits better to my aptitude. In following this method of investing, I just need to keep my eyes & ears open to the happenings around me and look for stories worth investing. New product in my kitchen; new appliance in my bathroom, new or larger hoarding on street corner, an attractive advertisement in newspaper, a shopkeeper pushing some product harder than usual, some management on magazine cover, your children or ...