Great returns comes with time in the market rather than timing the market.
We bought Daawat in 2021 and it’s 8x for us in just 4 years.
In all these 4 years, Daawat went from 50s to 120, back to 90 then to 220, back to 150 then 400, back to 300 something then to 500…
Lesson 1. Returns are not linear. Stock prices zig zag.
Lesson 2: Hold on to your winners. Those who would have panic sold early at first dip of 90 would miss out on 8x and take home only 50% profits.
In all these 4 years, we saw 2nd & 3rd wave of coronavirus spreading across the world, lockdown fears, Russia Ukraine war, Nuclear war threats, supply chain issues (remember Daawat has significant export exposure), interest rate hikes, decadal high inflations, recessionary fears, Israel gaza conflict, Trump global tarrif war, Israel Iran war, and what not.
You see all the events? They brought in peak volatility in markets. But we were stubborn in our holding.
Lesson 3: Ignore the so called ‘breaking news’ and digest the volatility.
Lesson 4: Hold your stocks with patience and deal the volatility in markets with tolerance and vision.
Lesson 5: Curb your temptations. It’s tempting to book profits when you see 2x-5x profits in portfolio. But you’ll never have 10x-50x in your portfolio, ever, if you book out early in a high quality business.
Bonus Lesson 6: Try to be equanimous with uncertainty.
That’s it for today class.
