Stock Market Outperforms Other Asset Classes in India, says Anantharaman

KOCHI:
Stock market in India continues to outperform all other asset classes by giving investors the biggest returns globally and helping create real wealth in excess of any other form of organized investment, says a new book.

Stock Market Wisdom: Learnings from a lifetime in Capital Markets written by the former chairman of the CSB Bank T.S. Anantharaman shows that returns from the two leading stock market indices Sensex and Nifty in the last 25 years have been a whopping 1289% and 1357% respectively. “If you take the investment return for the Indian investors’ preferred asset classes—real estate, gold, and bank deposits—and compare them with stock market returns, stocks outperform them all by a substantial margin. For instance, India’s best known market index, the Sensex has a compounded annual rate of return of around d 16% for the last 40 years,” the book notes.

Investing wisely in stock market is an art. Over the years, Anantharaman has turned this art into his passion. A seasoned entrepreneur, investor, and motivator of financial markets, Anantharaman’s book on stock market is worth reading. It inspires the beginners. It gives practical guidance to those who are frightened of the stock market. It guides you through the mature steps you need to take if you are eager to invest and create wealth through the markets.

The book which hit the stands early this month and has emerged as one of the best-sellers on Amazon comes at the right time during these days of the
coronavirus pandemic. The virus wreaked havoc on people’s lives and livelihoods and led to the crash of the Indian stock market by 40% in March

2020. But the markets have emerged stronger since then, with Sensex surpassing the record 50,000-point last week, proving the resilience of the Indian stock market.

In the wake of the pandemic, about 10 million new demat accounts were opened in India as retail investors confined to their homes got time to study
and manage stocks. In this book, Anantharaman, who has been in the markets since the 1980s, draws from his extensive experience and covers all aspects of the Indian stock market- right from its evolution. So be it investing or trading, mutual funds or bonds, fundamental analysis or technical- there is a lesson for everyone.

Anantharaman says ordinary Indians have been hesitant to invest in the markets thanks to lack of knowledge, wrong publicity about the stock markets, equating stock markets with casinos and incidents of booms and busts. Out of India’s 1.3 billion population, just over 3% own stocks.

“The ordinary Indian is ignorant of the stock market, but captivated by unproductive assets such as cell phones, gold, jewellery and land,” he points out. Therefore, the book argues that it is high time the government, the stock exchanges, the regulators and educated members of society taught the masses
the risks and rewards from stock markets and the benefits they hold for investors.

Anantharaman says the key to wealth creation in stock market is to go for value and growth investing. “The key to value investing is to study a company to understand its true value. Growth investing entails investing in rapidly growing companies in hopes of achieving substantial gains in the near future,” the veteran investor points out.

For most people, a book on stock market could be boring thanks to the technical jargons. But Mr. Anantharaman has presented the book in the most simple and lucid language for pleasant reading and the chapters are laced with real-life, real-stock stories that have made differences in wealth creation. Like the Mumbai-based 65-year-old doctor who multiplied his wealth 4000% from Rs 5 crore to Rs 200 crore over the last three decades.

The book which covers the comprehensive stock market aspects very crisply lists five leading multibagger scrips which have been consistent performers and wealth creators for investors in India. They are HDFC Bank, Kotak Bank, Asian Paints, Pidilite and Titan. It also lists five emerging multibagger stocks which could be future wealth creators. They are Muthoot Finance, IDFC First Bank, Sequent Scientific, United Spirits and Godrej Agro.