There was an interesting post in the WSJ about an Indian grandmother Ashalata Maheshwari.
Apparently, this lady has been investing in Indian stocks since 1954 and now her portfolio consists of around 1500 stocks worth around 4 Crore Rupees.
The author then draws the conclusion that Indian equities are a great investment and one should learn a thing or two about equity investing from the Indian granny.
What I found interesting in the article was not Ms.Maheshwari’s stock picking prowess (1500 stocks-thats the entire market) nor her holding period (apparently forever).
What was interesting was this nugget-Ms.Maheshwari bought a flat in Santacruz (a Mumbai Suburb) for Rs.80,000 in 1972 and now its worth around 5 Crores.This translates into an effective return of 17% pa-beating equity returns.
So I guess the real lesson of the Indian grandmother is that Indian realty will probably give you much better returns than Indian equities over the very long term(30-40 years).It will also save you time from reading annual reports and attending AGMs and give you more time for your grandkids !
On another note,I had the occasion to actually hear this lady’s poems in one of the AGMs.The poem was fairly memorable…because it was unforgettably atrocious !
One reply on “The real lesson of the Indian grandmother & Indian Stocks”
Indian realty ( a flat in Santa Cruz, Mumbai may not be representative of average residential real estate) may have given better returns than equities in the past. Nevertheless it may not be right to infer that realty shall continue to outperform equities forever. Who knows, it may turnout to be a hazardous conclusion after all