Sensex Milestones Over Last 30 Years - Chart Of The Day 14 October 2016 - Equitymaster

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Sensex Milestones Over Last 30 Years
Oct 14, 2016

1986 was the year when Sensex was compiled. Corporate scams, political unrest, macro factors, asset bubbles and so on have been part of Sensex's journey over the years. As reported in Business Standard, Sensex' market capitalisation has zoomed from Rs 148 billion to Rs 47.8 trillion. The index is up 300 times in 30 years.

But which companies have led this surge? And which have fallen behind?

It is widely believed that investing in index stocks is the safest way to invest in equities. But that's not the case. Of the original thirty Sensex constituents in 1986, only seven companies viz; ITC, Hindustan Unilever, Reliance Industries, Tata Motors, Tata Steel, Mahindra & Mahindra, and Larsen & Toubro continue to remain part of Sensex presently.

The old businesses that failed to upgrade their products with the changing life style, preferences and demand have faded into oblivion. While the Sensex will continue to scale new highs, not all the stocks will continue to be part of it.

Sometime back, my colleague Tanushree asked a potent question in an edition of The 5 Minute WrapUp:

When Will You Start Owning Sensex 2030 Stocks?

Here's what Tanushree wrote...

    Now, in August 2016, we saw the passage of another landmark reform. Experts call the Goods and Services Tax (GST) the most important reform since '91. The bill could be a driver for the economy for a very long time. And one may assume that fundamentally well-placed stocks today could go on to unleash the big gains expected from a post-GST market. The sentiments today are reminiscent of Sensex '92. The blue chips of today may not be the blue chips of tomorrow.

    Of course that does not mean one should not be investing in any Sensex stock today. We see steep earnings upside in few big blue chips over next three to four years. Hence, these could be amongst the safest investments for the medium term.

If you are interested to know more about the companies that have caught the StockSelect team's attention, do read this special report - Sensex 40,000: 4 Stocks to Profit from the Coming Stock Market Wave that is still available for download.

Data Source: Business Standard

This Chart Of The Day was published in The 5 Minute WrapUp - Of Jhunjhunwala, Indian Stock Markets, and the Unthinkable

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