The world’s richest investor, Warren Buffet rightly said “The stock market is a device to transfer money from the impatient to the patient.”
There have been instances where the investors have sold shares for a few pennies which turned out to be big multi-baggers. One such person was Ronald Wayne who sold his 10% stake in Apple Inc. at just 800$ in 1976. Today, the stake would have been worth $ 94 billion. Apple Inc. has returned an astonishing 102,400% (excluding dividends) in the last 40 years since IPO. As evident from the chart below, for quite some time (till the early 2000s, the stock was not performing, and it was only after the year 2010 that the rally started & the rest is history)
Another example is Amazon.com Inc. Listed at 1.5$ in 1997, which touched a height of 100$ in 1999 (yes, around 100 times in just 2 years). And then the Dotcom burst happened and it took Amazon 10 years to reach back again to 100$ and today the stock is worth 3,161$ (return of around 3000% in the last 10 years and 210,633% in the last 23 years)
You may be wondering how do I choose the next Amazon or Apple? Well, there is no shortcut, even a single stock in a portfolio of 50 stocks may become Amazon or Apple in the next 20-30 years. The only way to get superior returns is disciplined investing and for a retail investor like us, mutual funds provide the opportunity to leverage the experience of a fund manager coupled with the low cost of investing.
Please note that this article was originally published on April 3, 2021. Hence, the returns considered are till April 3, 2021.
