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Make 15% returns from Stock Markets easily! - YouTube
Channel: unknown
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no one in the stock market can predict
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the prices of anything hi everyone
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welcome to today's video so on today's
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video i am going to discuss with you how
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you can make 15 000 rupees income on
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monthly basis by investing 10 lakh rupee
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in the stock market
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a point to be noted here is that this is
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not regular income because the stock
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market keeps going up and down so some
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years you will make a lot of return some
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years you will not make a lot of return
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but your average return can easily be 15
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and i will mathematically prove it to
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you why i will also explain why people
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do not make returns in the stock market
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in fact according to one of the
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statements by mr nitin kamath and this
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is the statement you can take a look at
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it he said less than one percent traders
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actually beat fd returns so fd returns
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are five to six percent 99 of active
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traders are not even able to beat these
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returns so this is a very worrying
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scenario so therefore i will discuss
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five specific points with you as to what
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five steps you need to take in order to
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ensure that you are making that 15
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return press the like button it will
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make me super happy it would indicate to
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me that you like me making this type of
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content so i would continue to shoot
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such videos so before jumping into five
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specific steps let me first and foremost
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mathematically prove it to you why
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making 15 returns in india is not that
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complicated so the math of 15 goes
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something like this that first and
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foremost the gdp growth of india is
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roughly 8 now you can check a lot of
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statistics here is an article which
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displays that this year's forecasted
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growth of india's economy is roughly 8
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to 8.5 percent so this is the growth of
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the indian gdp second key point that you
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need to know is that the inflation in
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india is roughly six percent why have i
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taken inflation i will explain it to you
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in a minute so if you add both these
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numbers it comes out to be fourteen
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so let me first and foremost explain why
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this 14
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including inflation attributes to growth
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so essentially what is gdp of a nation
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gdp is the total value of goods and
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services that is produced in a
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particular economy so there is a real
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part of gdp growth for example imagine
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that this year in 2022 there is only one
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maruti car that is produced in india and
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it costs 3 lakh rupees so what is the
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gdp of india it will become 3 lakh
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rupees but every year what happens is
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that inflation also rises so assume next
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year all there is only one maruti car
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that is produced but inflation also goes
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up by six to eight percent in india so
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what is the total value of goods and
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services that is produced it will become
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three lakh plus six percent of three
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lakh so this will become roughly 3.18
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lakh so this becomes a total value of
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gdp of an economy so the bottom line
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that i want to outline is that the
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growth in india is roughly 14 this is
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the growth number for india i would also
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argue that our stock market also
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approximately grows at the same rate why
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is that very simple to understand
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because what is gdp made of it is made
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up of businesses like maruti that are
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producing a lot of maruti cars tata
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motors car fmcg companies launching
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shampoos what not right so essentially
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it's a total value of goods and services
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that is produced and it gets represented
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by what it gets represented because all
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the major companies are listed where on
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nifty 50. so if we take nifty 50 as a
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good proxy because it comprises of top
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50 companies in india and they also
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roughly grow at the same rate at which
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the entire growth of the nation is
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happening and therefore it has been seen
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that nifty's average return two decades
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average return has been roughly 12 and a
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half percent so why am i telling you all
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this math very simple reason because i
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want to outline the fact that if you are
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making less than 12 and a half percent
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returns then you really need to think
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about your stock market strategy and
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understand the five key points that i am
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going to speak about next also before
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starting these five point discussion i
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would like to thank our sponsors which
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is et money genius it is a wonderful
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product that helps you create
[213]
personalized investment plans it helps
[215]
you figure out the right portfolio makes
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in terms of equity and other asset
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classes and also gives you timely
[221]
updates in terms of rebalancing your
[223]
portfolio it's a wonderful product
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specially for retail investors who need
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customized help so in case you are
[228]
struggling in terms of making stock
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market returns et money genius might be
[231]
a great product for you so with that
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said let us start the five point
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discussion point number one you need to
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understand that majority of the people
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who are investing in the market they
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keep on focusing on the price of the
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stock they never analyze the business or
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they are not even focused on analyzing
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the business now as a result what
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happens is two things happen number one
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you are not able to predict the prices
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because no one can predict the prices
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and i'll explain it to you why also in a
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minute but second and more importantly
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that whenever price drops for a great
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stock also there is a lot of panic
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buying and panic selling that happens in
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the market and as a result people end up
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making insane amount of losses so let me
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demonstrate via taking the examples of a
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future forward contract as to why stock
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market prices cannot be predicted for
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any stock i am giving you a very honest
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discussion no one in the world no one in
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the world can predict the stock price of
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any stock even for tomorrow i will again
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explain you mathematically why please
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press the like button if you like this
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insight so let's pick a futures and
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forward contract on steel so let's
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imagine two companies one is gsw steel
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it produces steel and it sells that
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steel to companies like maruti right so
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let's assume this hypothetical example
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so you have a seller of steel and you
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have a buyer of steel what will maruti
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do by buying steel it will manufacture
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cars now let's assume that gsw steel is
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right now selling steel at 1000 rupee
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per kg and maruti is buying steel at
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1000 rupee per kg so what is gsw scared
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off it is scared of the fact that you
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know what if tomorrow the steel prices
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go down if it becomes let's say 800
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rupees then my business will go down
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because i am selling this stuff at 1000
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rupees now suddenly if the international
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steel prices go down then what am i
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going to do i will be making a lot of
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losses so it might decide not to expand
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it capacity build new factories etc etc
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similarly if you take a look at maruti
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what will it be scared off if this deal
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tomorrow becomes 1200 rupee per kg then
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i will get scared because i'm buying
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steel i have set all my operations hired
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a lot of people optimize my processes
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and just because of the increase of
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steel prices i might end up taking a lot
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of loss so they might decide not to
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expand their business further so in the
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market what ends up happening is that
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there is a forward or future contract
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that is done so both these party enter
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into forward or future contract what is
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the difference between forward and
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future one is traded over the counter
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one is not that is the difference but
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essentially it's the same thing so
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forward and future contract is just a
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legal contract so to say where both the
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parties fix that hey we are going to
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sell steel at 1000 rupees per kg for the
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next 10 years and maruti gets to buy
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steel at 1000 rupee kg for the next 10
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years so they do such a contract and
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this is a hedging instrument that is the
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reason why i also say that i trade in
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futures and options to hedge my
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portfolio not to bet on stock prices
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stock price prediction no one can do now
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use your logic and understand this
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company's entire business is based on
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what it is steel the name itself comes
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in steel so their entire business
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depends on guessing the price of steel
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and they are unable to do it if they
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were able to do it why would they go and
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sign this contract that hey we want to
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fix our prices because the prices can go
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up tomorrow why would you not want to
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benefit tomorrow the price can go to two
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thousand rupee per kg three thousand
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rupee per kg four thousand rupee per kg
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then why is it that a company like gsw
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steel a billion dollar company whose
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entire business revolves around
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predicting the prices of the steel is
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not able to take that bet same goes for
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maruti if maruti is sure that you know
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what tomorrow steel prices are going to
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fall and they can correctly predict it
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then why do they go and do these hedges
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it doesn't make any sense right no one
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in the stock market can predict the
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prices of anything but what is it that
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retail investors do we do the complete
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opposite we try to guess the stock
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prices that tomorrow itc will go to 250
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because my macd rsi tells me this no it
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cannot tell you that tell me this that
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even the recent crisis anyone could have
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predicted the extent of these crisis the
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answer is no everyone thought that in
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what covert is over now there is bull
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run in the market forever just one one
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and a half years into it russia ukraine
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crisis blew up quite a lot now there are
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inflationary concerns bunch of other
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different different things you don't
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control fed actions you don't control
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what shashi khan does is going to do in
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india all that stuff so the bottom line
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is that all these things have an impact
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on the stock market and we can't foresee
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these actions but retail investors
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unfortunately keep playing around the
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stock prices they do not focus on buying
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quality business
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if as retail investors we focus on
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buying quality businesses businesses
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that are making revenues businesses that
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have good management businesses that
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make profits that have products that are
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good people are buying those products we
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will not make a loss yes there can be
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temporary notional losses in companies
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like hul but people start panicking that
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you know what akshat hul prices have
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fallen i have gone bankrupt because i
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sold hul at a three percent loss come on
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guys if you cannot even hold a company
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like hul with a little bit of loss on
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your portfolio whatever company do you
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have faith on take a look at the actual
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chart here tell me like a period of five
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years when it has not given returns if
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you just take a look at three month or
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four month window and start panicking
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because some good company like hul has
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fallen then unfortunately stock market
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is not the place for you so be honest
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with yourself and please think about it
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that there is no point in predicting the
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prices as long as you are buying good
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businesses you will make money no one is
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going to stop you from making money now
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comes the second point that we as
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investors do not have our own investment
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system now what do i mean by investment
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system for example if you study the
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investment style of any major investor
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beat mr warren buffett be it mr charlie
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munger be it mr rakesh indiana beat elon
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musk they all have their own investment
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style so let me first and foremost do a
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very quick commentary on mr warren
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buffett's investment style and this
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bullet point encapsulates his entire
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investment strategy so this highlighted
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part if you quickly read through it the
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top five investments in buffett's
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holding company berkshire hathaway are
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apple bank of america coca-cola american
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express craft heinz out of five four of
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his companies are cash flow companies
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except for apple all other four are cash
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flow companies and apple is the only
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tech stock that he holds so mr warren
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buffett at the peak of his career
[577]
started investing in cash flow based
[579]
businesses he has always been an
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advocate of companies like gillette or
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coca-cola because they have a very
[584]
predictable cash flow models and
[585]
essentially he has stuck to that
[587]
investment style and investment strategy
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apple is the only exception to his
[591]
portfolio and if you go back read his
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commentary approximately a decade ago he
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was not a big believer in the tech
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stocks also but over time he took one
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position in tech stock which is
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technically apple right now and he has
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stuck to his core investment style four
[604]
out of five assets in his core portfolio
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are still cash flow-based stocks why
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because he is a cash flow oriented
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investor he understands his investment
[612]
style and he sticks to it he plays by it
[614]
he follows it and he does not give up on
[616]
that investment style on the flip side
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if you go and analyze elon musk's
[620]
investment style you will see that he
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has invested in something like deepmind
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technologies now what is deepmind
[626]
technology it is an artificial
[627]
intelligence firm which got acquired by
[629]
google and elon musk made insane amount
[631]
of money what type of businesses does
[633]
elon musk run and where is his money
[635]
tied into so he runs tesla which is
[637]
technically a tech company boring
[639]
company again it's a revolutionary tech
[641]
company so to say yes it is doing
[643]
infrastructure development work but it
[645]
requires a lot of tech in order to do
[646]
that what would you categorize as spacex
[648]
which is one of the companies that you
[650]
run again you have to think about it
[652]
tech right why because spacex is able to
[654]
launch a space vehicle at almost one
[657]
fifth of the cost of what boeing can do
[659]
which is one of the largest
[660]
manufacturing firms in the world why
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because spacex technically again is a
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tech firm so the point that i'm trying
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to make is that mr warren buffett sticks
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to cash flow based company that is his
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investing style mr elon musk sticks to
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tech oriented investments which is his
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investment style he comes disrupts
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traditional conventional industries by
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using more and more tech because he
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understands that game similarly you and
[682]
i as an investor should understand our
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strengths and limitations so how does
[686]
this apply to us let me give very quick
[687]
commentary on it so for example majority
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of us are working somewhere we would
[692]
have a nine to five job or probably we
[694]
might be working 10 hours a day now do
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you really think that we can keep up
[697]
with the stock market will we be able to
[699]
trade do intraday trades keep on
[701]
monitoring our systems keep on checking
[703]
nifty 50 all that stuff we can't do it
[705]
majority of the times even i am involved
[707]
in building my own companies writing my
[709]
book advising startups etc so we don't
[711]
have that luxury of time to keep sitting
[714]
in front of our screens but what we try
[716]
to do many of the retail investors
[718]
should i become a trader should i become
[720]
a day trader should i leave my college
[721]
should i leave my job do this full time
[723]
please don't do that please understand
[725]
your own limitations that is the very
[726]
important point please try to discover
[729]
your investment style you can easily do
[731]
this by taking positions and starting
[733]
your investment journey about the
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industries where you have little bit of
[736]
expertise for example if you are working
[738]
in tech make a decision whether to buy
[740]
tech stocks or not if you see some very
[742]
good opportunity take investments in it
[744]
similarly if you are working with let's
[745]
say fmcg companies it will be very easy
[748]
for you to understand what is happening
[749]
in that space read more about it and
[751]
then take positions educate yourself
[753]
about the industry where you are already
[755]
working full time it will be easy to
[757]
start crafting your portfolio from there
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let's move on to point number three so
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the third reason why our portfolio does
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not grow by 15 a year is very simple
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that we actually are in the habit of
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profit booking there is a very
[768]
interesting story about mr peter lynn so
[770]
people who do not know who mr peter
[772]
lynch is here's a short summary about
[773]
him he ran fidelity megalian fund and
[775]
grew the portfolio from 100 million to
[777]
13 billion dollars crazy returns one of
[779]
the highest return generators of that
[781]
decade so he wrote a book called as one
[783]
upon wall street and he gave a quote
[785]
which was even used by mr warren buffett
[787]
so the quote goes something like this
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that selling your winners and keeping
[790]
your losers is like cutting the flowers
[792]
and watering the weed so for example if
[794]
we buy a stock at 100 rupees it goes to
[796]
150 then we sell it we book a 50 rupee
[799]
profit right and we have sold that stock
[801]
completely so we should not be doing it
[803]
especially if it is a very good business
[805]
why because what is going to happen that
[807]
you have made this 50 rupee what are you
[809]
going to do with it you have gotten into
[810]
a lot in terms of making quick returns
[812]
so what are you going to do with that 50
[814]
rupee guess what you are going to pick
[815]
the next stock and look for the next
[817]
multibagger or penny stock or a horrible
[819]
stock and you are going to invest you
[821]
are winning in that stock and 9 out of
[823]
10 times you are going to lose that 50
[825]
rupee profit also so what ended up
[827]
happening in this entire game is you got
[829]
out of a good stock you planted that
[830]
profit into a bad stock and lost
[832]
everything so you're away from a good
[834]
stock also now so the point that i'm
[835]
trying to tell you is that unless you
[837]
learn business analysis you will not be
[839]
able to succeed in the stock market you
[841]
will not be able to develop your own
[842]
system and you will always go for the
[844]
thrill in the stock market not from an
[846]
investment point of view now you will
[848]
ask me that actually then how do we book
[849]
profits so there are much more sensible
[851]
ways of booking profits this video will
[853]
become really long i'll make a separate
[854]
video on profit booking if there is
[856]
enough interest for that video so let me
[857]
know in the comment box i will
[859]
definitely curate a video now comes
[860]
fourth point why retail investors do not
[862]
make 15 return in the market the reason
[865]
is that we are very egoistic now what do
[867]
i mean by egoistic so let's understand
[869]
this by picking an example so let's say
[870]
that you bought a stock at 100 rupees it
[873]
fell to 80 rupees then what are you
[874]
going to do you are most likely going to
[876]
average it then it falls down to 60
[878]
rupees what are you going to do you are
[879]
going to average it even more so you are
[881]
downward averaging it now the problem
[884]
happens that if that stock is bad now
[886]
you've purchased so much of it and
[887]
you're sitting on so much loss that it
[889]
might give you a headache why did you
[890]
downward average a bad stock because you
[892]
were egoistic that i cannot see a loss
[894]
on any particular equity even the
[896]
biggest of the biggest investors when
[898]
they have 20 stocks in their portfolio
[900]
at least seven or eight of them will be
[902]
in red so you don't need to get scared
[904]
by seeing stocks in red and please do
[906]
not keep on downward averaging bad
[908]
stocks this is the first way in which
[909]
the ego plays out ego also plays out
[912]
from our portfolio perspective now you
[914]
know for a fact that nifty 50 is going
[916]
to give you 12 and a half percent return
[918]
without doing any magic and nifty 50 is
[920]
one of the best passive indices where
[922]
the expense ratio is very less
[923]
commissions are very less all good good
[925]
things but we end up purchasing 20
[927]
mutual funds and year after year year
[929]
after year the mutual funds are not
[931]
giving us any return they are not even
[932]
giving us 10 return but we keep on
[934]
holding those mutual funds why because
[936]
we cannot afford to see laws if you
[938]
cannot afford to see laws and you do not
[940]
know how to book a loss you are not
[942]
being rational it's very important to be
[944]
rational in the stock market if you get
[946]
a sense that you know what i just don't
[947]
have the time to study the stock market
[949]
i'm not interested in it but i want to
[951]
invest please go and invest in passive
[953]
mutual funds you are done you don't need
[955]
to do any magic there if your mutual
[957]
fund portfolio is not even giving you 12
[959]
and a half percent return please go and
[961]
invest in passive mutual funds if you
[963]
are picking individual stocks and if you
[965]
don't have the ability to make returns
[967]
from the stock market please go and
[968]
invest in passive mutual funds it is as
[970]
simple as that so all these basic things
[972]
can be tried out yes i completely agree
[975]
that when you are good in terms of
[977]
investing in individual stocks if you
[979]
have the time if you have the capacity
[980]
to learn i highly encourage you to do
[982]
that because then you can make like
[984]
really crazy returns up to around 20 25
[986]
also but you need to do an independent
[988]
analysis whether or not you are ready to
[990]
invest time and effort in terms of
[992]
learning that skill if you have no
[994]
interest in it please don't simply trade
[995]
on stock recommendations now comes fifth
[997]
and final point that you need to update
[1000]
your investment system periodically what
[1002]
do i mean by that so understand it
[1004]
conceptually that what is stock market
[1006]
stock market is a collection of
[1008]
businesses
[1009]
now the nature of businesses change
[1011]
quite aggressively almost every single
[1013]
decade now can i prove it yes take a
[1015]
look at the story of fang stocks the top
[1017]
five american tech stocks you will see
[1020]
that couple of decades ago just 20 years
[1022]
ago these thanks stocks did not even
[1024]
have five percent representation in s p
[1026]
500 now the top five stock makes up 25
[1030]
of s p 500 so the nature of businesses
[1033]
itself has changed so unless you are
[1035]
aware of that unless you are willing to
[1036]
study a little bit about tech you would
[1038]
have invested in age-old businesses only
[1040]
and you would have taken a lot of losses
[1042]
who studied it mr warren buffett he
[1044]
understood that you know what tech i'm
[1045]
not good at it but yes i have to take
[1047]
some positions in apple it was against
[1049]
his investment system but he still
[1051]
understood the point that this is where
[1052]
the world is moving he changed his
[1054]
opinion updated his belief system
[1057]
learned more about it and took a large
[1058]
chunk of his investment in apple so it's
[1060]
very important to update this same is
[1062]
the scenario playing out in india for
[1064]
example take a look at funding of
[1066]
startups 10 years ago there was so much
[1068]
heat against entrepreneurship it's not
[1070]
as if entrepreneurs were worshipped so
[1071]
to say right now the dynamics are that
[1074]
that entrepreneurs have looked with
[1075]
reverence there is so much money that is
[1077]
coming into the startup ecosystem so
[1079]
many fintech edutech companies are
[1081]
getting built what is going to happen 10
[1083]
years from now in india a lot of changes
[1085]
are going to happen you need to study
[1087]
those changes as an investor if you're
[1089]
not willing to sit and study where the
[1091]
world is going you will never become a
[1093]
good investor so i say again i will get
[1095]
a lot of heat that hey if you don't like
[1097]
cryptos it's okay not to invest in it
[1099]
but at least learn about it there are
[1101]
good parts about cryptos for example
[1103]
blockchain is there d5 is there meta
[1104]
verses are there you must understand it
[1107]
just because hey you know what someone
[1108]
said that crypto is tulip i'm not even
[1110]
going to study it that way you will not
[1112]
be able to update your knowledge ever
[1114]
and if you don't update your knowledge
[1116]
ever you will never ever ever ever
[1118]
become a good investor a related final
[1120]
point here is that if you take a look at
[1122]
any investor the investors who make
[1124]
crazy amount of money they identify
[1126]
trends early and they invest in those
[1128]
trends early take a look at mr rakesh
[1131]
janjanwala's investment in titan he
[1133]
invested in that stock one and a half
[1134]
two decades ago roughly he did not sell
[1136]
that stock he stayed put he has added
[1139]
more technology companies in his
[1140]
portfolio now so all the points that i'm
[1143]
telling you that hey don't cut your
[1144]
flowers and water the weeds update your
[1146]
investment system buy good assets
[1148]
identify trends early stay invested all
[1151]
these are being exhibited by mr rakesh
[1153]
indian walla also mr warren buffet also
[1155]
and all the other major investors that
[1157]
you will see so in summary it is very
[1159]
important to understand a few key points
[1161]
number one it is absolutely possible to
[1163]
make 15 return in the stock market
[1165]
easily provided that you are buying good
[1168]
businesses and not making the mistakes
[1170]
that i talked about so check the links
[1172]
in the description box also i will link
[1173]
some of the reference material for you
[1175]
to read also check et money genius
[1177]
product it's a wonderful product and if
[1178]
you want to create a personalized
[1180]
investment plan etmoneygenius can help
[1182]
you out
[1183]
thank you so much and i will see you
[1184]
tomorrow
[1192]
you
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