Based on my experiment, mostly investing directly on large cap stocks, the resultant CAGR was still not equal to Mutual funds/ETF. For example
I invested in these large cap stocks during my experiment period from 2015 to 2019 RIL, Axis bank, L&T, Vedanta, Yes bank, HDFC bank, Hero Motor, Maruti Suzuki, all part of Nifty 50, but my mutual funds were able to give me a considerably better CAGR over the same period.
All of these large cap stocks were/are quality at some point of time during above said period.
My point is that, if we have to take risk, why not risk in small/microcap segment for finding the better stock, as large cap stocks CAGR are almost matched to those of mutual funds.
Though these are finite set of experiment and thesis may go wrong with other set of stocks but the point is to achieve greater alpha.
With small / micro cap also, in my set of experiments (i obviously got lucky with most of them), few stocks like Tata Elxsi, Taal enterprises, Fiem industries etc have made most of money, and they also covered losses in many other micro caps.
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