Peter Lynch once said, " Warren Buffett states that twelve investments decisions in his forty-year career have made all the difference". I have been an investor for the last 4 years, and I believe I found my 1st Investment decision that's making an impact on my Portfolio.
This is NOT a show-off post. But probably the first time I am publicly sharing my biggest success from the Investment world for the below reasons:
How a middle-class Indian, who had ZERO knowledge about investing till 5 years ago, can taste success by thinking Long Term.
Experiencing Compounding can be life-changing.
Charlie Munger ( Warren Buffett's Partner) often shares his pearls of wisdom and his thinking has shaped my thought process. This quote of him is one of the founding principles of my Investment strategy: " The first rule of compounding is to never interrupt it unnecessarily "
What is Long-Term Thinking?
The year was 2017, I had quit my Corporate career and had ventured into Entrepreneurship. This was also the same time when the "Becoming Warren Buffett" documentary was released. I watched it multiple times, but one learning that got ingrained in me was: Think Long Term.
Enter CDSL :
June 19, 2017: IPO of CDSL hits the market. It was a 523 Cr. IPO. The price band was Rs.145 - 149 / share. When I read about what it does and its future potential, one thing was clear that it's a 20+-year-old story for India, and here was an opportunity to play the Long Term Game.
Jun 21, 2017: CDSL IPO subscribed 170.16 times on its final day. The public issue subscribed 23.83 times in the retail category, 148.71 times in QIB, and 563.03 times in the NII category. I had applied on the last day and silently hoped I get an allocation.
June 30, 2017: It got listed at Rs.250/share a whopping 80% gain.
July 14, 2017: The share price touched an All-Time High(ATH) of Rs.400/share. I remember I was in Leh that day on a Solo 10 day Trip. I had a hard time convincing myself NOT to sell a single stock. Understand my temptation that I then faced: in just 15 days of investing into CDSL IPO, it was already inching towards 400% returns, just to compare, an FD then paid 4% returns in a year! Thankfully good senses prevailed and I didn't sell ( Not having a proper network in LEH was another factor that helped me by not looking at the stock price).
Fast forward 3 years...nothings literally happened with the CSDL stock. In fact, in 2020, it almost went back to its IPO price.
March 23, 2020: The world had just seen one of the world's worst stock market crashes, courtesy of COVID. Even CDSL wasn't spared. The stock price touched Rs.169/share. I remember questioning my decision of not selling few shares when it was at Rs.400 in 2017. But since April 2020 started the mother of all bull runs in India, and now in hindsight, I am glad I didn't sell.
September 02, 2020: I revisited the CDSL story, it had hit a new ATH of Rs.490/share, making it an Rs.5050 Cr. company. I had just started the Mad About Stocks Instagram account and I ran a 3 post series on why I felt the story has just begun.
09 July 2021: CDSL informed the stock exchanges that it now has 4 Cr ( 40 million) Demat accounts. I remember making a note that day, questioning when will it 5 Cr Demat a/c's:
16 July 2021: CDSL touched Rs.1496.9/share intraday and hence it's officially my First 10X bagger ( 900%). It's now a 15,000 Cr. Market Cap company. I started the journey when it was 1500 Cr. company.
So you see the journey was NOT a smooth one. And if I had just kept looking at the stock price, I would have sold my shares long back. Again I would like to quote Peter Lynch, which made me held onto the stock :
This is one of the keys to successful investing : focus on the company , not on the stocks.
CDSL is a long-term story and I continue to believe that the journey has just begun. Think Long Term and see the magic of Compounding. That brings me to the second point: Compounding.
Experiencing Compounding:
Irrespective of how much returns it now gives me from here on, it will continue to remain special for me. Why? Not because it's my first 10 bagger, but for the first time I am experiencing compounding. Reading about compounding & personally experiencing it is an altogether different game.
In the first two years of my investing journey(2017 & 2018), two things have happened: A. I have made losses, B. I sold good stocks at meagre profits.
But experiencing what Compounding can do through CDSL has changed me as an Investor. It now forces me to think Long Term and makes me study the company, rather than just seeing the stock price.
My TOP 5 Learnings from CDSL Journey :
1. A 10 Bagger doesn't appear to be a 10 Bagger at the beginning of the journey
2. A 10 Bagger journey isn't smooth, it will test your patience & conviction levels
3. Stop playing the IPO Frenzy for 'listing gains' only, play the long term game of wealth creation
4. When an IPO is subscribed 170 times, your chances of getting an allotment are rare. Both I & my wife had applied for CDSL IPO, I didn't get any shares but my wife did. You need lady luck in life :)
5. A good investor is an 'Entrepreneur who never Sold'. Think, as if you own the business. It will help one owning a lot of stocks for life!
Have categorically not covered in-depth, what CDSL does in this blog. You may want to revisit my CDSL Instagram Posts on 'Mad About Stocks' (published in Sep 2020), where I have spoken at length of this aspect.
To conclude, I am reminded of ' Bamboo Trees'. Farmers who grow Bamboo, plant the seed and water it every day. Nothing is visible after 1 year. The second year they water it, again, nothing happens. The third-year they water it, again, nothing happens. This phenomenon continues till they reach the end of the 4th year, imagine how frustrating can it be? But suddenly at the beginning of the fifth year, tiny sprouts appear and in just SIX weeks a 90 ft Bamboo tree emerges out of nowhere.
This is how mother nature teaches us Compounding. Have a great week ahead.
P.S: I continue to hold CDSL stock, and hence I may be biased. This blog shouldn't be treated as a recommendation to BUY the stock now. Kindly do your due diligence before investing in any stocks.
#MadAboutStocks
If you like my work, consider supporting it :)
Write a comment ...