Fast Moving Consumer Goods (FMCG) & Consumer Durables: Long-term Best Buys?

Investing Strategies
383

I have decided to invest lump sum amount in blue chip to earn similar returns.

The bluest of blue chip is HUL.

So, I though, I will invest in HUL once it come down and again I will earn handsomely.

So, I look back at 10 year track record of HUL and this is what it look like.

HUL share price on 16th April 2010 - 227

HUL share price on 14th April 2020 - 2350.

Return of 26% CAGR over last 10 years.

Yippee.

But if I go back 10 more years, this is what I found.

HUL share price on April 2000 - 222.

Now, let’s calculate return again with assuming investment made in 2000.

Return of 12% CAGR over last 20 years.

Lesson learned -

  1. Being blue ship doesn’t necessarily guarantee great return.
  2. Timing of Entry into a company is far more important than it seems (though SIP expert don’t agree here)
  3. Exit is equally important as entry
  4. Blue chip won’t give astronomical return of small companies
  5. Go for blue chip if you want Average but stable return
  6. For great return, 20x - 50x of your capital over 10 years, go for small caps (preferably)
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