A Rare Opportunity to Grow Your Wealth Over 100 Times

Charlie Munger recently concluded the Daily Journal annual meeting.

A lot of it revolved around viability of China as an investment destination.

The country earned a bad reputation post what it did to Alibaba and many other tech ventures, crashing their valuations in a matter of days. Munger acknowledges the risks but considers it worth it given the cheap valuations.

To quote him:

• I'd rather wait in Los Angeles right next to my house, you know, it'd be more convenient. But I can't find that many investments, you know, right next to my house.

On Berkshire itself, he believes the future is not going to be as bright as the past because for higher valuations and because the government is so hostile to business.

This transported me to an older meeting of Berkshire Hathaway where Warren Buffett credited a lot of his success to ovarian lottery i.e, being born in the US. To quote him:

I mean, Charlie - when we were born the odds were over 30-to-1 against being born in the United States, you know? Just winning that portion of the lottery, enormous plus. We wouldn't be worth a damn in Afghanistan.

Now to be sure, both Warren Buffett and Charlie Munger are over 90 years old. It's not just being in the US, but also the time when they were born that has led to the making of these legends.

But I'm not writing to you to reflect on their luck.

The idea is to recognise ours when we can and make the most of it.

I'm speaking of being an investor in India at a time when the economy is taking a giant leap. If you ride along with the right stocks, this decade and the next could be a wonderful phase to build generational wealth.

It used to be a platitude once, or the subject of school essays. But in the recent years, the story of India rising is becoming a reality that is hard to ignore.

Post covid, when the neighbouring countries are facing an existential crisis, and even the dragon economy can't seem to spit enough fire, the Indian economy has taken a turn for the better.

The ease of doing business, the formalisation of economy, the financialisation of savings, emerging young entrepreneurs, Make in India, political will and policy support... there are many levers that could catapult India into the league of a superpower.

The United States such a leap in the mid-1940s and 50s.

Japan took this leap in the 60s.

China in the 80s.

And South Korea in the 90s.

After taking this giant leap, the economies of these countries started growing exponentially. And the fate of India would be no different I believe.

This shift is evident across the sectors - auto, pharma, drones, semiconductors, green energy, chemicals, smartphones... India is starting to take the lead at a global level.

After the US, Japan, and China... now it's India's turn to become the factory of the world.

As is common in any revolution, the old is likely to give way to the young. Not the inexperienced young but the experienced young.

Allow me to explain...

If you are looking for the next Infosys like stocks that have created humongous wealth, you will have to look beyond Infosys and other companies in the largecap space. In other words, you will have to look for stocks and businesses that are well placed to become the next largecaps.

That brings me to smallcaps. I look for opportunities in the smallcap space. And there are quite a few that could become multibagger stocks.

But there's one thing about smallcaps. They are inherently volatile. They are high beta stocks. You should definitely consider this space, but with strong allocation guidelines that limit exposure to a single smallcap as well as smallcaps as an asset class.

With the rest, your aim should be to find a company that has in it to be the next largecap.

But the million-dollar question is, how do you find these stocks?

Well, my colleague Rahul Shah has the answer. He has come with a unique Value for Money matrix to find these stocks. When he applied it to the universe of 5,000 listed stocks, he came up with some interesting insights.

The stocks that made the cut for him were mostly midcap stocks. Unlike the most popular stocks, these stocks are not priced to perfection yet. From a fundamental perspective, these are less risky, also less volatile than smallcaps.

Rahul talked about these stocks in detail in a special event earlier this week called India's Third Giant Leap.

In case you missed it, you can watch the video here.

Warm regards,


Richa Agarwal
Editor and Research Analyst, Hidden Treasure