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In this post, I will discuss why holding a few good stocks forever is good. What is forever? 10 years or more.
What is the likelihood of holding a share for 10 years? Well very likely. But how many investors hold even a single share for 10 years? Very few.
Well, I do have a course on how to select stocks to hold for the long term. I do not have a page on that because of the reason given above – not many investors hold a share for 10 years. If interested you can WhatsApp me.
We all know Warren Buffett is one of those who have made billions out of stock investing. I do not think anyone else will beat his returns in future. Why because we have become short-sighted as far as returns are concerned.
Here is some important information and quotes by Berkshire Hathaway CEO Warren Buffett:
- Berkshire Hathaway CEO Warren Buffett is continuously ranked as one of the richest people in the world. Berkshire Hathaway’s CEO and the sixth richest person in the world with a net worth of $78.4 billion as of August 23, 2020, on Bloomberg Billionaires Index, Buffett owns no mega-mansions, supercars, and yachts. He is among the very few super-rich who neither believes in living life king size nor engage in a splendid display of wealth. Source: https://www.financialexpress.com/industry/warren-buffett-breakfast-at-mcdonalds-flip-phone-for-calls-how-6th-richest-person-spends-his-fortune/2063096/ (recommended read)
- He is seen by some as being the best stock picker in the world, with his investment philosophies and guidelines influencing numerous investors.
- One of his most famous sayings is “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.”
- Another one is “If the business does well, the stock eventually follows.”
- The third is “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
- And the BEST one is “Our Favourite Holding Period Is Forever.”
In this post I will discuss his best quote till date “Our Favourite Holding Period Is Forever.”
To start with let me give you an example of Reliance Industries Limited stock (NSE: RELIANCE, BSE stock: 500325, Group (A) RELIANCE, INE002A01018)
This is the most popular stock in India, and of course a fundamentally strong stock. Now let me show you the return this stock has generated from 2002 to 2020 or 18 years.
See this image on 05-Jul-2002 Reliance was trading at 53.01:
And on 18-Sep-2020 it was trading at 2305.70:
ROI: 2305 is 4349.05% of 53.
Had someone invested Rs. 2,50,000/- (Two lakh 50 thousand only) he would have now Rs. 1,08,72,625/- (One Crore Eight Lakh 72 Thousand). That’s a profit of Rs. 1,06,22,625/- (One Crore Six Lakh 22 Thousand).
This is what long term investment can do. Wait there is more. Read this post on how to make crores from the stock markets to see how our parents could have made 800+ crores on an investment of just Rs. 10,000 in ITC.
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