It must have been in 2006 when a senior banker asked me to meet his neighbor’s cousin. She had lost her father (her mother had died long ago) and was having some problems understanding her late father’s portfolio.

She had no clue of her father’s portfolio, but she kept saying that he would regularly buy / sell and make a lot of fixed deposits.

She was a very well organised person and she made an excel sheet to show the number of shares, but had no clue where the dividend warrants were. Her father had never spent too much money, but had NEVER asked her for money. She was a married to a man who also did not talk about money at home..and they led a simple quiet life.

So here I was looking at about 49 companies in which he was holding shares for about 30-40 years…The usual – Reliance, Gsk, Hul, Hdfc, Hdfc bank, Nirlon, Century, Nestle, ….sure there were some duds too….do not remember the names now.

So I asked somebody in the office to make a valuation…

When she came to me next I asked her “Do you know how much is the portfolio worth?” – she and her husband OF COURSE HAD NO CLUE.

I asked them to guess…and they said ‘about Rs. 20L’ …this is how the conversation went:

Client: No Mr. Subra we have no clue about my dad’s investment, but maybe it is Rs. 20L

Me: Well, that is the amount of money he has in Fixed deposits, apart from that he has equity shares.

Client: Oh I did not know he had 20L in bank FDs!! So my dad was a rich man?

Me: Do you really think that Rs. 20L is high? Er, what would you do if you had Rs. 30L Mrs. Client?

C: Oh I would quit my job and sit at home! Maybe take a vacation.

PS: she did not need this money, she and her husband were doing well, and she had esops from a good technology company.

C: Subra, really I would quit.

C’s husband: I think from the way you are asking, the amount is Rs. 30Lakhs!

Me: Actually it is a little more than that. Your father had a dividend income of almost Rs. 6 lakhs, Interest income of about 2.5 lakhs, and the bad news is he has NOT PAID income tax for the past so many years!

C: Subra, but now this is getting curious – please tell me the figure!

Me: Rs. 1.7 crores !!

Even a CAGR of 12% + dividend re invested + not paying even the legitimate tax dues was a great combination! When I was seeing this, markets were still not in a final stage of boom. SHE WAS IMMENSELY lucky that she was seeing this portfolio at the peak of a boom. She used the opportunity to clean up dramatically and invest in mutual funds.

What it proved to me was the following:

1. Stock picking was about a lot of common sense

2. Investing small amounts of money over very long periods of time creates WEALTH. If you do not understand this statement, READ AGAIN, and again.

3. He had held Hdfc since 1980. THAT ALONE was greater than ALL THE CASH that he had EVER invested. SORRY ever earned while in service.

4. If he had weeded out his garden he would have PERHAPS earned more. It was too imperfect data set.

5. If he had met a RM or a broker, his portfolio would have been cleaned out LONG BACK!!


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  1. Sir, It is examples like this that drive the point home in thick headed people who believe that wealth can be created only by investing in gold and real estate.

  2. Sir, equities have proved good for long term if we see the returns they have given in past 20 years, as you have mentioned in above post holding hdfc since 1980. I would like to know at this point of time if we invest in the same shares and leave it for 20 years would we still get those kind of returns… i have been tracking some shares past 2 years they are more or less in a range 100 plus or minus every year.. Please share your view on this

  3. ‘5. If he had met a RM or a broker, his portfolio would have been cleaned out LONG BACK!! ‘
    i think , it might got wiped out, i.e. cleaned out! at least partially if he had met a RM in a bank ,of you are talking sometime!

  4. Wow. Congratulations to these people.

    I find immense unwillingness on part of people to even list what they have inherited, or create a free portfolio online… “han han karte hain” is the usual response…

  5. After becoming your regular reader, I dont think of liability I think to make assets to enjoy my life with peace..

  6. Sir, there a lot of examples like these in RE where parents bought a piece of land in outskirts & it is worth crores now.

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