**There are a few businesses in India that continue to compound at an astounding 25% plus CAGR over the last 15-20 years. **
Fortunately for us a wealth of data on this compiled for us by Motilal Oswal since 1996. The17th ANNUAL WEALTH CREATION STUDY (2007-2012): Economic Moat - Fountainhead of Wealth Creationcan be found here. As also all the 16 previous compilations.
I got to see this annual study in 2007/8 and was astounded to see the long term compounding track of ITC (30% plus), HDFC (42% plus), the Pharma Majors and many others including the IT giants (who are of course past those heady days of growth). ITC and HDFC are continuing their great track and there should be atleast 5-6 more?
At around the same time, I was reading the highly acclaimed “The Future for Investors: Why the Tried and the True Triumph Over the Bold and the New” by Prof Jeremy Siegel where he showed the top Wealth Creators over the last 50 years in US Market have been the Consumer Facing, Branded (with pricing power) Tobacco, FMCG and Pharma companies.
There was an exact echo in the India list from Motilal Oswal - consumer facing, branded Tobacco, FMCG and Pharma companies have been the most consistent wealth creators (apart from the IT pack). Ofcourse the Motial study only goes back 22 years now vs Prof Siegels over 44 years of Compustat data.
Nevertheless I thought there were important signals there. I latched on to an ITC for myself and an HDFC for wifey. Wanted to take this further, but didn’t/couldn’t …lured as I was by Ayush’s charm and the emerging beauties he would seduce me with very frequently:)).
With the exhilarating ride/experience of last 3 years in micro & small caps, and the great learning/discipline that that quest has distilled in us - for separating the wheat from the chaff - I think we are in a much better position today, to return to this original quest.
If we have to bolster ValuePickr Portfolio with 3-4 Bluechip Evergreens for the next 5-10 years, which should these be?